Ex-Goldman trader builds mini pod shop in Singapore with offbeat hires

FOUR years ago the same instincts that made commodities trader Kelvin Chiu rich also cost him a small fortune.

Honed by stints at Goldman Sachs Group and Vitol Group, he’d gone independent and earned enough to start a family office. But while roiling agriculture markets were reaping him a record year, much of his money was parked in passive stocks designed to be left alone. And as markets plunged following Russia’s invasion of Ukraine, he trusted his gut and slashed his holdings – only to miss out on the rebound.

“The long-term buy and hold mentality just goes against my very nature,” he said. “It was a bad episode that showed my personality is incompatible with passive investing and the limits of just having a one-man operation.”

Chiu’s solution was to quietly turn his Singapore-based family office into a mini pod shop, assembling a team of traders running different strategies. Where industry titans like Millennium Management and Point72 Asset Management offer prestige and mega bonuses to lure top talent, Chiu is hoping to tempt those looking for more independence – or even their first ever shot at professional trading. He scours social media to identify traders who don’t fit in elsewhere.

SilverCape Investments now has six trading pods alongside Chiu’s commodities book. They include a Japanese activist investing team that managed over US$200 million in assets at the end of August, outpacing Chiu’s own strategy, which he says has a capacity of around US$100 million.

His attempt to emulate the approach of the world’s biggest multi-strategy firms, which have specialist traders focusing on a variety of markets, shows the increasing appeal of the pod shop model even for those traders who made their fortunes in one asset class.

“There are quite a few talented traders and portfolio managers out there who don’t necessarily fit into the traditional multi-strategy or hedge fund fund model,” he said. “They need a set-up that trusted them earlier in the journey and that’s where we found our niche.”

Trading career

In some ways Chiu is trying to create the firm he would’ve liked to work for.

Growing up in money-minded Hong Kong, he graduated from the University of Cambridge with a Masters in Economics before spending almost a decade as an agricultural futures and options trader at Goldman Sachs and energy trading giant Vitol.

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His plan was to go solo once he’d amassed US$10 million to trade with. In 2018, he decided to launch a few million dollars short of that.

Over the next seven years, Chiu said he generated a 78 per cent compound annual growth rate, not including withdrawals along the way. He declined to comment on the firm’s total assets under management. 

One issue with Chiu’s own investing strategy is that many of his trades are capacity constrained by the agricultural futures market’s smaller size and the nature of his relative-value opportunities, he said, limiting his pod to around US$100 million.

The multi-strategy model allows him to spread his capital while learning from his traders. If the pods perform well, some could eventually co-invest with other firms or be prepared to take external money, he said, using the track record they’ve generated at SilverCape to entice new investors.

The lofty aspiration is to potentially make it into a family office version of Millennium – a tough ask, given bigger hedge funds can offer enormous bonuses and large teams funded by pass-through fees borne by clients.

That’s why Chiu’s methods for finding talent run from the conventional to the more offbeat. He tracks traders via social media and Substack; one of his portfolio managers Clement Ang delivers spicy memes and trading commentary to more than 17,800 followers on X and learned some of his techniques from traders on live streaming site Twitch.

Despite his track record for massive bets and hiring newcomers, Chiu is a cautious talker – often drawing thoughts and details from his digital notepad during meetings and interviews. The lack of outside investors allow him to dispense with the common accoutrements of high finance. The family office’s simple website consists of a one sentence description and an e-mail address while his office occupies the corner of a co-working space.

Japan bets

Singaporean Loh Wei Quan was running wealth management’s most mundane errand when a speeding truck changed his career. An investment adviser who dreamed of being a portfolio manager, his car was smashed while delivering forms to a rich client. As he reviewed the wreckage he recalled wondering how he would’ve felt if this had been it.

“My colleague drove by to check I was okay, but business has to go on so I handed the forms to him,” he said. “In a way it was great because it was a wake-up call.”

Within months he quit his job at Standard Chartered and invested his own money full-time. Having only recently become a father, he knew he’d be tempted by his old gig and deliberately grew his hair out so that conventional firms would reject him. But while solo trading offered him freedom, it also meant working with a scarcity mindset – fearful of losing too much in any given month.

With his personal account sitting at US$200,000, he responded to an ad for a role at SilverCape. Where other firms might spurn his shoulder-length hair and relative lack of institutional investment experience, Chiu looked past it and slowly ramped up the trader’s book. After less than two years, Loh now manages exposure to US$60 million of assets. 

One pod that’s already making waves is a Japanese activist investing team called the SilverCape Rejuvenate Strategy, which targets small to mid-sized companies and managed over US$200 million in assets at the end of August. While some firms have welcomed its input and seen share price growth, others have fought hard to stymie its influence.

Over the next 12 months, Chiu is hoping to fund at least two new investment pods, while adding the caveat that more could be spun up if the right traders and strategies emerge. One would be a China futures trader and another will specialise in pan-Asia equities outside of Japan.

“The freedom to be in cash when times are quiet and ramp up risk aggressively is an edge,” he said, while noting he doesn’t expect his other traders to necessarily emulate his style. “When strategies start working, when processes are set and early results are promising – like in the Japan engagement strategy – my role is to back talent.” BLOOMBERG