Lincoln: Welcome to Funds That Won, where we dive into some of the world's most renowned investment funds. We'll interview investment managers across the alternative landscape and learn how they built their million and even billion dollar asset management empires. We'll explore teams, structures, strategies, and best practices in launching and running alternative investment funds. First tell me a little bit about your hedge fund.

Nancy: Okay, so what we do is we trade power and electricity in North America. Mainly, even though we're headquartered in Calgary, we trade mainly in the United States. It has a really good, I mean the U.S. has been a great opportunity for people who are very entrepreneurial. We started with about seven or eight you know, shareholders, and we, you know, pooled some money. I literally remortgaged our house at that time with my, so. How long ago was this? This was in 2011, and I'll kind of go back a little bit on that, is that at that time, it was, you know, my ex-husband and I at that time, we were separated. He wanted to start a hedge fund to trade power and electricity. He'd been trading for, about seven or eight years at that point. He says to me, he's like, you know what, I want to do this at this time. Will you be OK if we remortgage our house? And I take all of that and invest with a couple of other people and do this. I'm a single mom about to be divorced. And I could take my half of the money and just go, you know what, you do you. You know, we're separating our lives anyways. But instead, I'm like, OK, let's take this risk together. And if it works, great. If it doesn't, you know, I have a mortgage for another like, you know, 10, 15 years. It's OK. And so now fast forward to 2023, we have about 50 employees in in Calgary, another about 10, 12 in Houston. And we just opened a an office in in Europe. Wow. So now we are getting into the European market.

Lincoln: And how much are you guys managing?

Nancy: We started off with, let's see, like seven or eight shareholders who are also still employees of the company. We have, we started off with like one, 1.1 million, and now we are assets under management over 300 million. And that's with taking out a lot of equity. I mean, like a lot of dividends over the years.

Lincoln: So do you do annual distributions then?

Nancy: annual distributions to the shareholders, which are the same core people, and we do not take out outside investments.

Lincoln: So you don't have any LPs? No. So it's more of like an investment club that you started, right? Of just trading and trading together collectively. Yes. seven individuals, right? That is incredible. Grew it from 1.1 million up to a $300 million business.

Nancy: Business. And that, like I said, has been in 10 years. We've never not paid out a large distribution. Wow. So, you know, we kind of felt that, you know, the fund is going to grow, but then we also wanted the ability to take some money out personally so that we can, you know, invest in other businesses. And so everybody in our group have businesses outside of the core business as well.

Lincoln: Wow, that is incredible. Tell me about those early years. With just a couple million under management, I assume you probably didn't do distributions then, or have you done distributions every year? What was your mentality as you're growing, and why is maybe 300 the stopping point, or is it still growing, or what's your methodology?

Nancy: So the first about two, three years was I didn't actively work in the company. I was a shareholder. I still had my kind of day job because I wanted to make sure that, you know, at least one person had a day job so that this mortgage that we've done or this like it was like a HELOC. Oh, yeah. There was, you know, we have to pay it every month. So I had a day job in order to help help support that in case anything happened with with this investment. And it was a situation where there was like, you know, one or two traders, you know, and then everybody else was more mostly three or four traders and everybody else was more like support staff. And every single trade was a do or die trade. It's like, you know what, this trade can keep us alive for another day, week, month, or it could sink the entire operation. And when you're thinking of a small hedge fund, what happens is that we're small little fish in a huge pond, even at a pond at that time, right? And then you're also competing with the guys that are like, you know, ocean size, you know, the big banks, the really big hedge funds, they could be wrong in their position. but they can hold that position until they get you out, right? So that was the risk in the beginning is because you're trading it from a position of you always have to be right because even if you're wrong for a short period of time, you're out of money. Like there's no more credit left to hold that position until things turn around. And so it was every single trade was a sink or swim type trade. So

Lincoln: You were riding on your performance at the beginning.

Nancy: You just had to perform, point stop. Exactly, and it started off trading on a laptop and a little computer. I think it started in our basement and then we moved into a little one or two bedroom condo, setting up with this computer. And then eventually in 2014, we moved into a real office, I would say, that we bought the building. And we moved into it. We, again, still are the same core people. And we had this space that was, I think about like seven, about almost a thousand square feet. And it felt like so big, like, oh my God, look at this massive space, right? By the time we moved out of there, we were, you know, 30 or something cramped into the space. We renovated over and over because we needed more desks. We needed more desks. And that's where we are. So we ended up buying a new building in 2020, 2021. And I'm in the midst of like doing a massive renovation on that. How exciting. Yes. Up in Canada, right? Up in Canada.

Lincoln: You're staying headquartered up there. Yes. Love it. Yes. Hey guys, thanks for listening. As you know, we don't run ads on this channel. So if you could really help me out, if this podcast has added any value to you or your business, please subscribe, rate, and review. I would appreciate that greatly. Thank you. Okay. Talk to me about this electricity market just for a minute. I mean, how big is the futures market? The contracts, explain it from soup to nuts, if you would.

Nancy: So with the electricity market, you can trade hour by hour. You can trade out a day, a week, a month, a year. Obviously, as it goes out further, there's more risks to be taken, and there's a lot more credit that needs to be posted in order to trade those larger contracts. So in the beginning, we just traded, you know, settlements that were the next day, you know, just really short settlements. And the electricity market is actually massive. It's, you know, hundreds of billions of dollars in trading. We don't own any physical assets, so we don't own a power generation or anything like that. But a lot of the bigger companies, they own, you know, these these Generations so they can take that Electricity and sell it into the grid or trade around that So and so are your end buyers like municipalities primarily or states or no? So, for example, so California would be an ISO, which is called an independent systems operator. So they are mainly there to make sure that the demand is met by the supply. So they basically balance the electricity grid. So for us as a hedge fund, what we can do is we can purchase power and electricity from outside and float into there. So there's two types of trading. physical assets and financials. So the physical would be I would buy say from Nevada, I would set up a contract with you know one of the generation plants there, purchase it at the next price and whatever California is trading at we would purchase the contract to you know, at this price here, buy the transmission rights in order to flow into California and sell it in that market. Because we don't have any generation, we have to rely on all these contracts all along the way. And so what happens is if any part of it gets cut as we're trying to flow that market, flow that power, you know, We can, number one, get in trouble. Number two, we're not fulfilling the contract that we've agreed on.

Lincoln: Yeah. What's the liquidity like in that market?

Nancy: California is very liquid. Yeah. Yeah, very liquid. It's probably one of the biggest markets in the US. So California is one market. Houston, which is the Iraq market, is another one. Then the Northeast is another large one. And then the rest of the US is kind of all clumped into different areas. I don't know if you want me to get into specifics about the names of each of them. No, that's fine. They all kind of, you can all interflow together or you can kind of contract it to float specifically. The other type of contracts is financials, which are the options markets and in the futures market. So you could purchase a position, you know, that settles maybe a week, a month or a year out and take a position on whether it's going to be you know, X price or below and you can buy or sell that position. So with trading, you know, markets could go down as long as you're on the right side of it, you make money, right? You can short a market and make money or you can be long and still lose money, right? So you buy to hope that the prices go up but then prices have gone down and now you have to cover that contract. So you could lose money in both directions, but you can also make money whether prices are increasing or decreasing. And with electricity, which is kind of different than stock market, is that the prices can go into the negative. So if there's just too much supply, the ISOs will actually kind of pay you to kind of like Just take it off their hands. Yeah, because any imbalance in the system will could potentially shut down the system. Wow.

Lincoln: Yeah, there we go. Okay, so you ran this, you know, $300 million. You're running this $300 million hedge fund. Phenomenal. Like, tell me about how you got here. I know that you're an immigrant and you have this amazing story, you know, coming over. I'd love to jump into that a little bit.

Nancy: So I was born in Vietnam to a Chinese father and a Vietnamese mom. My dad was born and raised in Vietnam, but his roots and his descendants or his ancestors were all from China. And then shortly after the Vietnam War, Vietnam was allowing anybody with Chinese roots to leave the country. you know, being a communist country, it's not like, you know, you can pick up and go. But because, you know, the war had recently ended and they basically just want, you know, Chinese people, we don't want you in the country anymore. And my dad saw that as an opportunity to leave Vietnam and hope for something better in the future. What that future was, he doesn't know. And so we took a train from Vietnam into China. And at that time, it was kind of crazy because because of his Chinese roots, China actually really welcomed all Chinese people from wherever to come home, even though he was not actually born there. So we lived in a farm, I guess, and in a big hall with mattresses, like, you know, the straw mattresses and little cots and lived like that for a year while my mom was pregnant and my brother was born there. My dad said that, you know, when you leave a country into, you know, another place like for myself, I was, you know, raised in Vietnam or so I've raised in Canada. But if I was going to go to China, I don't know anything about it. You know, even though that's my roots, that's, you know, really where my father was. He my brother was sick one time and, you know, he's like a few months old. Dad had to take him to the hospital, rode a bicycle in the middle of the night with my my my brother in in his arms and he's biking and he's going down this dark, you know, kind of gravel road. hits a rock, falls into a ditch, It's pitch black. He cannot find my father or my brother. He's like on his hands and knees looking for my brother. The only reason he found him was like my brother called, you know, start crying and he was able to find him. Now the bike is like broken and he's still like riding with like this down to the hospital. Right. So that is the that's kind of where I started. We also then from there, we went from China and we took a wooden boat to Hong Kong. And on that journey, it took about 30 days, about a month or so. And how old were you at the time? By that time, I was about three years old. And dad says, like, you know, these wooden boats, sketchy. And it broke down and it broke down near Macau. Water's coming in. So the Macau government pulled us in. fixed it up and said, listen, if you stay in Macau, you are going to all starve. And I think there was about, I don't know, it was like 50 or 100 people in this boat, you know, really just crammed in there. If you're sick, everybody gets sick. So they fixed up the boat and they pushed us back out to sea. Wow. Yeah.

Lincoln: Nancy, this needs to be in a book.

Nancy: You know you need to write a book, right? Have you ever been told that?

Lincoln: That is incredible.

Nancy: Yeah, they pushed us back out in the hopes that we would be saved by the Hong Kong government. And sure enough, they brought us in and we lived there for another year in a refugee camp. And when I say refugee camp, I'm saying like, you know, hundreds and hundreds of people in a space where, you know, families would share one bed or a small bunk bed. And they gave us an opportunity to go out and dad to find a job so that he can like make a little bit of money. It's it's Wow. Yeah. Okay, so you're in Hong Kong.

Lincoln: Yeah the age of four Almost four.

Nancy: Yeah. Yes, where to next so where to next was that? The at that time Canada and United States Australia were all really accepting refugees into their country And so my dad's first choice and second choice were, you know, Australia and United States. He's heard about these places growing up in Vietnam, doesn't know anything about it, but, you know, heard about, you know, United States is a fantastic place to raise a family and to be. And then he hears about Canada because the reason he heard about it was somebody literally having a table like this with a couple of people working there accepting applications to come to their country. And that's really how we accidentally fell into going to Canada. We just kind of signed up to different countries that would accept us, and Canada was one of the first ones to accept us. And so that's where we decided.

Lincoln: We made the jump. So you and how many siblings do you have?

Nancy: Now I have two younger brothers. So I was born in Vietnam, middle brother born in China, youngest brother born in Canada. So three different countries. And oh, here's a funny story is that that was like my dad, my mom and the kids. When we hit, like there's different refugee camps, we would look, my dad would go look for his siblings because they don't know where everybody ended up. And there's no cell phones at the time. All they did was leave instructions for people at different camps, say, hey, if you hear about this person, tell them that we're at this particular camp and we want to meet up. And he was able to find all of his siblings and they all immigrated to Canada together. So I was like, how do you do that without a cell phone, like without email, without anything? It was just word of mouth is how we found each other. And we were lucky. We were like one of the really, really lucky ones, Dad said, because, you know, some of these boats that were out in the ocean at that time going to, you know, the ones that were near other countries, there was pirates, there was rape and pillage and kidnappings, especially of the women and children. And he says that we were very, very lucky to be able to keep our family together and started a new life in Canada together. There was other stories about people losing each other in the sense that My dad has knows a friend who they were all at the same refugee camp together. Something happened. They lost the grandfather, you know, like and they can't find him, like literally couldn't find a person just from from, you know, the shuffle of this and that. And they've lost somebody that never knew what happened to him. Right. So we're I'm genuinely one of the luckiest people I and I hold. I thank my my family for that. What I have today is all because of the risk that they've taken. And I will forever try to repay my parents for the life that I have. Otherwise, I don't know where I would be and what I would be doing. And because of that, my children's future is so much better because of all the risk that was taken. Wow.

Lincoln: OK, Nancy, that's an incredible story. Thank you. Hey guys, so if you want to learn more about investment funds, how they work, how they're structured, if you want to become a fund manager, how I became a fund manager, visit our YouTube channel for more free value. The link is in the show notes. Thank you. So as an immigrant, a woman running a hedge fund right now, What do you have to say, you know, just being candid, that's not very common, right? It's not very common in this industry. So, you know, what do you have to say about that? What, what do you take from that? How do you think about that in your life?

Nancy: You know, I work in an industry that is very male-dominated. For the first, even up until, say, 2020, I was the only female in my whole firm, right? I'm one of the partners there, and I have some incredibly, incredibly smart partners that are the brains behind this. But I bring a different perspective in that I bring a female touch to everything. As we grow, what I have noticed is that, you know, Managing the assets is one thing, and we've got, you know, this is not where we're stopping. We've got plans to make this even bigger. You know, this is just a, you know, a stop. And then the next goal is, you know, half. And then the next goal is the billion. And then we're just going to see where we can take this. There's no slowing us down because we've got a vision to keep, you know, keep challenging ourselves to see if we can do it. You know, you've create these little markers and you just once you achieve it, it's like, OK, let's let's see where we can take this next. My perspective on this is that I as we grow, I want to continue to create that environment that is that is very cohesive. One of my core values in our company is to create still a, almost like a family business in the sense that people who are working there, they can, they're part of our growth. They are, you know, some of the engines of our growth. And so I do a lot of events so that I don't know just my employees and my staff, but all of their family members as well. So we do family events where, you know, we invite everybody, kids, families to ski trips, to to movie nights where we book out the entire place. So every month we have an event where we will invite either the spouses along with the staff or their whole families so that as we grow, we get to know, you know, John's wife. marry like from a personal perspective and so that has been really important to me and I think that a lot of that has become part of because it's kind of the female touch you know very nurturing and very motherly, I guess. I have an assistant who does a charcuterie board spread every morning with very healthy stuff in order to make sure that the people that are working for us are well-fed. We are going to have a… So what's driving you?

Lincoln: What's driving you and your partners right now?

Nancy: What is driving us? You know, I would say ambition is, I think it's the challenge. It's like we are all ambitious because we're entrepreneurs, you know, by nature. But it's more like, you know, create a challenge for ourselves. And we're like, can we do this? You know, can we? It's like, let's just go and… Growth for growth's sake. Growth for growth's sake. And now it's also because we have all these people who are working with us and for us that they are, their family and their legacy is dependent on our success, right? So some of our traders, They're all doing extremely well because of the structure that we've set up for them. So I'll speak a little bit about how we pay them. I would love to hear, yeah. And it's not, you know, we didn't come up with this. We're not innovators of this, but we've adopted it as well, is that, you know, they get a really great, you know, six figure salary. But that's not their driver, right? Their driver is the bonus. And so for our traders, how it works is that, you know, you get a base salary every month that will, you know, pay your bills and kind of get you month to month. But the bonus is the big one. So they can make anywhere between, say, you know, 15, 20 to 30 percent of their net revenue. with no cap. So one of my partners, when he was working with a larger company, it was hard for the CEO to say, you know, my traders are making like millions, more than what the CEO's making, right? But we don't have that fear and we don't have that kind of like, structure where we're afraid of like, you know, the traders are making more than, say, one of the owners. It's like, no, because if the traders are making that much money, the owners are doing pretty well, right? So, you know, if a trader has made, let's just say if a trader's made $50 million, they get anywhere between 20 to 30% of that net of cost. And cost could be anywhere from, say, you know, say a million dollars of their cost. So they're making like 20% of the rest of that.

Lincoln: Wow.

Nancy: They're getting paid.

Lincoln: Yeah. That's wild. Yeah. So you pay them a base salary plus commission. Are you assigning them like a fixed dollar amount, like a portfolio that they manage? Or, you know, what is that? Like you divide it up among. equally among the traders?

Nancy: What does that look like? So each region, so let's just, I'll go back to California. So for example in the California market we need to post I'll just say a hundred million dollars with the ISOs and with all the various different counterparties that we trade with. So we post of all of our own money and the traders will have access to a big chunk, like a big portion of that in order to trade on their positions. So they don't, so they would, I would say this group will get say 30 or 40 million dollars worth of credit in order to trade off of those positions. So that's the cash or letters of credits that we would post for them to trade. We have a risk management group that would oversee, you know, if our exposure is too high, we would ask, you know, the traders to cut down on certain positions or they would have to stop out of their positions. Or if the, you know, if we've made a large amount of money in that, we would also take money off of the table in order to protect our assets. Wow.

Lincoln: Okay. So you sign them up, you give them a credit. Yes. What happens if they, you said you have a risk management department, but what if they perform poorly? Do they, are they given a grace period if they lose money for a certain amount of time? Is there a certain point where you just say, Hey, You know, we got to cut ties here. You've lost from too much money.

Nancy: What does that look like? One of the biggest things with trading is, you know, when you're doing well, everybody's a great trader. But when you're not, that is really the true mark of a good trader is, you know, how disciplined they are with their stop losses and how they are able to, you know, understand why there is a loss on that position. So we don't have a specific number. It's more of a, okay, you've lost, you know, $5 million, but do you understand why those losses occurred? And how disciplined were you in getting out of those positions? So if we recognize that someone doesn't, you know, we don't want a cowboy, basically, like, you know, just shoot at whatever and hope for the best, right? So when we recognize that somebody is, you know, out of that discipline, whether they've lost a million or five million, we'll cut ties. But if it's somebody who has, you know, has been very disciplined over the years and, you know, one of these crazy events have happened with the weather and they've lost, you know, five, six, seven million dollars or ten million dollars, but they're a very disciplined trader and they really understand that market, we won't let them go just yet. But in the end, it's a numbers game. So, you know, you lose money, you will you will be watched a little bit more closely, but we don't have like a specific number. It's more of a, you know, how your training style that really matters.

Lincoln: Yeah, absolutely. Well, what an incredible journey you guys have had. I love this story. It's phenomenal. Hey, I just wanted to throw this in here. So a lot of people don't know, but you can actually take a free course on funds today. We have over 100 videos on investment funds, doing deals and raising capital and how this industry works. The link is in our bio. It's absolutely free. And I think you guys are going to love it. So if you're interested in this space, I definitely recommend taking a look. Thanks. So Nancy, you run a hedge fund. You have this incredible story, but I also know you have several other business ventures that you're a part of. I'd love to hear a little bit about those.

Nancy: Yes. I'm in a partnership with my current husband, and we invest a lot in Puerto Rico. He is born and raised in Puerto Rico, so he's based out of there. And so about in 2019, you know, we saw a little house that I really liked and I saw it as a, oh, this is a great place for, you know, if we buy this, renovate it, I can bring my friends and family down to host them. That's really how the route started. Now fast forward about five, six years, we've got hotel, like boutique hotels that we're developing. It's got a portfolio of about 30 Airbnbs and we are developing a few other hotels and so we We've got an in, in the sense that he's born and raised there, and there is a lot of hotel incentives and tax incentives in Puerto Rico. And so that's why it's driven me as an investor to partner with him and continue to invest in this market that I believe is severely undertapped. The government has been so supportive in these tax incentives and And really, I feel like we found a diamond in the rough here.

Lincoln: What advice do you have for somebody who's maybe just starting out in industry, who's getting going? You know, what are your thoughts?

Nancy: My thoughts are I am a genuine believer in investing in yourself, taking a risk on yourself, and the more you genuinely believe in your skill sets, then you will attract the type of people that will believe in that vision with you to grow. One of our talents really is to be able to bring in people who can share in that vision with us, right? And it all comes down to you know what take a risk on yourself as a trader you're really just almost like a business within a business and you can work for a large company and have that security or you can come and take that risk with us and and Potentially really get paid well for that but the biggest one is you know, just believe in yourself and from a girl that you know, a refugee girl to a person who partners with people who have built this dream boat. It is possible. It is absolutely possible. You just have to take that risk and align yourself with people who believe in you and believe in the vision that you have.

Lincoln: Wow. So that is, that is great. I mean, putting it all, you know, I mean, you put it on the line, right? You put taking out that he lock, you know, that's, that's taking steps, putting your money where your mouth is. Yeah. Uh, any, what about habits that you have, uh, either in your business or in your personal life that you feel like have really attributed to your success?

Nancy: Gratitude. Yeah, that is such a simple word, but it takes us, takes people very, like just takes people far. Gratitude from everybody who, you know, the person who made my coffee this morning. I'm like, thank you so much. And it's genuine gratitude, it's not fake. I'm grateful that they gave me a free cup of coffee. I was like, oh my gosh, thank you, I really appreciate it. To the person who comes and unplugs our toilet in our firm, in our company, it's like, oh my gosh, you saved us because without you… Even this engine cannot run without as simple as a flushable toilet. So all along the way, I have been just so grateful to the people who have supported me and to have helped build this company with me. you know, from our cleaning service to to the traders, to to the people that work at the banks and everybody along the way has been a contributor to our success. And I am always grateful for that. And how I often show it with this, you know, if I do these events for my company or when I have my groups of girlfriends, I would do something just for them. Like, you know, I would say, hey, let's do this together, you know, let me show you how, in action, how you've impacted my life and in giving back, like that really drives me. Core value number one, huh? Yeah. I love it.

Lincoln: Giving back. What about on the flip side, any business or personal pet peeves, things that drive you crazy?

Nancy: Yes. I believe like a lot of things can be trained, you know, skill sets and stuff can be trained, but attitude cannot be. My pet peeves are people who have a very pessimistic and negative attitude in whatever they do, whether it be personal or professional. So when I'm interviewing a person, I've got people who are interviewing for the more technical stuff. I'm really interviewing for attitude and and how they would fit into our company, right? You know, I want people who are, you know, just motivating each other and, you know, really believe in vision that we have and believe in themselves and having a positive attitude is half the battle. Because if you don't, it doesn't matter how successful you are, you'll always have such a negative outlook in life that you know, it's sad, right? So my pet peeve is like if someone who is, you know, we're having a great day and they're miserable. We're having a bad day and they're just as miserable. So I'm like, you know, smile, it's okay. So I don't like to surround myself with people who are pessimists and you know, there's You know, you got to be cautious and things like that. But you know what? There's always a silver lining in everything. You know, when I was, you know, in the, you know, facing divorce and and being a single mom and this fear, I was still like, you know what? doesn't matter because my ex-husband is still an amazing, incredible person. It didn't work out for us personally, but I don't need to badmouth him or anything like that because he's still an incredible person, right? So I always see the silver lining and I always see the positive in things. And that's not something that you can teach another person. And so I just like to surround myself with people who are just, you know, have a really good attitude. Yeah.

Lincoln: Incredible. Incredible. Well, thank you so much for coming on today and sharing your story. What a remarkable journey. Probably one of my favorite podcasts to date. So fun to hear everything that you've accomplished. Thank you. Thank you. All information shared are the sole thoughts and opinions of the author. Do not take any information as legal or financial advice. You should seek a certified accountant and a professional legal team before taking any further action. We are not selling or soliciting a security in any way, shape or form. This content is for educational purposes only and is not to be construed as financial or legal advice. Clients of FundLaunch or Black Card Capital Partners may maintain positions and securities discussed on this podcast.