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Having been named the Macro fund manager of the year is a recognition of our team’s success in terms of investment performance and an acknowledgement of investors’ appreciation of our investment approach and philosophy. - Patrick Armstrong, Managing Partner at Armstrong Investment Managers LLP
Tactical asset allocation is becoming increasingly popular with institutional investors, as an environment of uncertainty, low leverage and increasing regulation calls for a nimble and flexible approach to asset management. - Ajay Jain, Head of Portfolio Engineering at Funds and Advisory at Barclays
Winning an award like this is very satisfying and to realise that the team and platform you’ve put together is getting recognition from our clients is great. - Hannah Goodwin, Head of Prime Brokerage at Citi.
We began this journey just a few short years ago and it’s been a privilege to have met with so many people and for our efforts to be acknowledged so early in our development. - Kenneth S. Phillips, Chief Executive Officer at HedgeMark.
FOREWORD Welcome to the Acquisition International Hedge Fund Awards 2013 2012 saw extremely difficult economic conditions world-wide, with the hedge funds industry in particular facing many challenges: increased market volatility; weakened global macroeconomic conditions; underperformance compared to traditional investment vehicles; and an increasing regulatory burden. Despite this, the industry ended 2012 in a stronger position than it went in, exceeding records set in 2007 for AUM and absolute number of funds, as noted in the Deloitte 2013 Hedge Funds Outlook. “Those that remained settled into a more measured and sustainable pace of growth, with money flowing mainly to hedge funds who altered their routines by adjusting to new demands from regulators and investors while looking for new ways to streamline back-office operations,� stated the report. This strong performance is in no small part due to the tireless efforts, flexibility and talent of those working within the industry. In recognition and celebration of these individuals and organisations, Acquisition International is delighted to present our Hedge Fund Awards 2013 winners. Our awards recognise leaders in their respective fields and, crucially, are nominated by their clients, their professional relationships and their peers. The winners’ ingenuity and hard work have distinguished them from their competitors and proven them worthy of recognition. Read on to find out who made the cut and what it takes to be an Acquisition International award winner.
HEDGE FUND AWARDS 2013 Winners List Australia Ascalon Capital Managers Limited KIS Capital Partners Pty Ltd Strategic Capital Services Limited Triple A Partners Zen Capital Management Pty Ltd Bermuda Aurum Fund Management Ltd Nephila Capital BVI Harney Westwood & Riegels Midland Trust Limited Sable Fund Services Ltd. Canada Agilith Capital Inc. Cayman Islands Appleby Baker Tilly Cayman Campbells Solomon Harris Summit Management Limited Channel Islands Verras Law China Orchid China Master Fund Ortus Capital Management Limited Skybound Capital - The China Red Fund Stratton Street Stratton Street
Boutique Fund Mangers of the Year - Asia Pacific Australian Boutique Hedge Fund Manager of the Year Australian Placement Agent of the Year Page 15 Australian Alternative Intelligence Provider of the Year - Hedge Funds Most Trusted Australian Capital Management Firm of the Year -Hedge Funds
Niche Investment Manager of the Year - Bermuda US Weather Risk Management Firm of the Year
Andean Region Investment Firm of the Year
Cyprus Beneficentia Ltd
Cypriot Asset Manager of the Year
Denmark Capricorn Strategies Capricorn Strategies France Key Quant Germany Aquila Capital Cordea Savills Prime Capital AG Greece Attica Wealth Management MFMC Papapolitis & Papapolitis Your Legal Partners Guernsey Carey Commercial Limited Hong Kong Citi Private Bank (Hong Kong) Ortus Capital Management Limited PricewaterhouseCoopers (PwC) Hungary GĂĄrdos, FĂźredi, Mosonyi, Tomori Indonesia Lubis Ganie Surowidjojo
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Danish Managed Futures Manager/CTA of the Year Danish Currency Manager of the Year
Israeli Risk Manager of the Year
Italy Anima SGR Tages Capital SGRS. p.A.
Lithuania MC Wealth Management Page 17
Luxembourg Bonn Steichen Partners Mexico Heather & Heather Netherlands Melles & Partners Asset Management Pelargos Japan Alpha Fund Russia Europe Finance
Alternative Structuring Specialist of the Year - Channel Islands
Colombia Andean Capital Management
Israel Blau Capital Ltd
Liechtenstein Attunga Capital Pty Ltd
Offshore Fund Administrator of the Year - Cayman Islands Accounting Firm of the Year - Cayman Islands Hedge Fund Financing Advisory Firm of the Year - Cayman Islands Offshore Lawyer of the Year - Hedge Funds Offshore Corporate Goverence Firm of the Year- Hedge Funds
China Long/Short Fund Manager of the Year Large Global Macro Fund of the Year - China Asian Fund of Hedge Funds of the Year Fixed-Income Fund of the Year - China Fixed-Income Fund Manager of the Year - China
Irish Hedge Fund Advisory Firm of the Year Irish Auditors of the Year
Japan Adamas Asset Management Adamas Asset Management
Hedge Fund Law Firm of the Year - BVI Corporate Agent of the Year - British Virgin Islands Hedge Fund Administrator of the Year -BVI
Canadian Fund Management Firm of the Year
Ireland Deloitte PricewaterhouseCoopers
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Singapore Blue Rice Investment Management Private Ltd South Africa 36ONE Asset Management Capricorn Capital Partners Edge Capital Novare Investments Switzerland Alix Capital SA Altradis Capital AG Ayaltis AG
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Barclays Barclays Credit Suisse AG, Private Banking, IS Product Development & Structuring Dacharan Capital (Jersey) Limited
French Research Platform of the Year - Hedge Funds
MCAM Group
German Independent Specialists of the Year - Hedge Funds German Fund Manager of the year - Property German Fund of the Year - Prime Capital Blue Chip Ltd
Peter C. Warren Swiss Investment Managers GmbH (SIM) Turkey Pekin & Bayar Law Firm
Greek Portfolio Manager of the Year Greek Sustained Excellence Award Most Trusted Greek Law Firm of the Year - Hedge Funds
UK AFEX Algebris Investments (Asia) Pte. Ltd Allenbridge Investment Solutions LLP
Fund of Hedge Fund Administrator of the Year - Guernsey
AlphaBet Capital Advisors Ltd Alpha UCITS
Hong Kong Research Analyst of the Year - Thor Monsen
AlternativeSoft AG Armstrong Investment Managers
Hong Kong Fund of the Year - Global Macro FX Hedge Fund Hedge Fund Tax Firm of the Year - Hong Kong
Armstrong Investment Managers Armstrong Investment Managers Armstrong Investment Managers Armstrong Investment Managers
Hungarian Law Firm of the Year
AXAInvestmentManagement Indonesian Law Firm of the Year
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Barclays
Italian Asset Management Firm of the Year Thematic Funds of Hedge Funds Asset Manager of the Year - Italy
Best Asia Mezzanine Fund of the Year Japanese Multi Strategy Asset Manager for the Year
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Hedge Fund Investment Manager of the Year - Liechtenstein
Holistic Wealth Management Service Provider of the Year - Lithuania
Luxembourg Law Firm of the Year - Investment Funds
Mexican Rising Star of the Year
Dutch Asset Manager of the Year Dutch Absolute Return Investment Boutique of the Year
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Russian Emerging Manager Solutions Firm of the Year
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Investment Management Firm of the Year - Singapore Page 21
South African Asset Manager of the Year South African Hedge Fund platform of the Year South African Multi-Strategy Fund of the Year South African Hedge Fund Research Provider of the Year
Overall Swiss Investment Boutique of the Year Swiss Multi-Strategy Fund of the Year Swiss Fund of Hedge Funds Advisor - Fixed Income & Credit Opportunities Swiss Risk Management Firm of the Year -Hedge Funds Swiss Fund Solution Provider of the Year Swiss Product Development Firm of Year
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Swiss Alternative Investment Strategy Firm of the Year Swiss Alternative Business Development Firm of the Year Most Trusted Swiss Asset Manager of the Year Most Trusted Swiss Fund Manager of the Year-Hedge Funds
Turkish Law Firm of the Year - Hedge Funds
Client Choice Risk Management Consultants of the Year Boutique Asset Manager of the Year - UK UK Alternative Specialist of the Year Joanne Job UK Capital Raising Adviser of the Year UK Distribution and Structuring Platform of the Year UK Technology Risk Provider Of the Year UK Macro Fund Manager of the Year - Patrick Armstrong UK Innovative Fund Manager of the Year Global Macro Fund of the Year - UK UK Diversified Group of the Year UK Fund Manager of the Year - Multi-Strategy Investor Choice Award - Portfolio Manager of the year - Ryan McRandal UK Hedge Fund Manager of the Year - Due Diligence - James Newman
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HEDGE FUND AWARDS 2013 Winners List Barclays
UK Hedge Investment Adviser of the Year - David Doberman UK Legal Advisor of the Year - Hedge Funds UK Niche Law of the Year - Hedge Funds UK Investment Director of the Year - Hedge Funds UK Asset Manager of the Year UK CIO of the Year -Frontier Markets UK Rising Star of the Year - Capital Raising UK Institutional Fund Provider of the Year UK Managed Accounts Platform of the Year Overall UK Fund of the Year - The Global Equity Long/Short Duet Global Plus Fund Overall UK Fund of the Year The Global Equity Long/Short Duet Global Plus Fund” UK Specialist Group of the Year UK Top Performance Fund of the Year -Ebullio Far East Commodity Futures Fund UK Fund of the Year -Ebullio Far East Commodity Futures Fund UK Document Production Platform of the Year UK Portfolio Manager of the Year - FrontEdge Global Hedge Fund UK Turnkey Solution Provider of the Year UK Electronic Trading Program of the Year Overall Fund Manager of the Year - UK Best European Boutique Prime Broker of the Year Page 17 UK Regulator of the Year -Hedge Fund Standards Board UK Outsourced Consultancy Services Provider of the Year - Hedge Funds Hedge Fund Advisory Solutions Provider of the Year- UK UK Rising Star - Hedge Funds Irish Custodian of the Year UK Market Neutral Fund Manager of the Year UK Relative Value Fund Manager of the Year Russian Fund of the Year - SPRING UK Multi Strategy Fund of the Year - Liongate UK Due Diligence Preparation Firm of the Year Global Trading Infrastructure of the Year UK Consultancy Firm of the Year - Client Service UK Large Investment Advisory Firm of the Year - Hedge Funds UK Managed Platform Provider of the Year UK Transparent Capital Management Firm of the Year UK Alternative Investment Provider of the Year UK Investor Identification Firm of the Year - Hedge Funds UK Events Driven Manager of the Year European Distressed Credit Fund Manager of the Year UK UCITS Sophisticated Fund of the Year - Odey Odyssey Investor Choice Award - Overall Fund Administrators of the Year UK Emerging Manager of the Year Page 25 UK Fixed Income Advisory Firm of the Year UK Independent strategy consultant Page 26 of the Year North America Prime Brokerage of the Year UK Finance Arranger of the Year - Hedge Funds UK Strategic Consultants of the Year -Exchanges UK Hedge Fund Research Firm of the of Year - Investment Opportunities UK Ucits- Compliant Manager of the Year UK Asset Manager of the Year -Futures Markets Data Room Provider of the Year - Hedge Fund Operational Due Diligence UK Emerging Manager Solutions Firm Page 24 of the Year UK Hedge Fund Advisory Firm of the Year - Capital Introduction UK Multi Commodity Asset Manager Page 26 of the Year Most Trusted UK Investment Team of the Year - Hedge Funds
ABLE Alpha Trading Ltd
UAE JonesDay
Overall Hedge Fund Law Firm of the Year
Woodfield Fund Administration, LLC
Ukraine Integrites
Ukrainian Most Trusted Law Firm of the Year
Blackstone Chambers Blue Sky Law Brooks Macdonald Asset Management (BMAM) Chenavari Investment Managers Daniel Broby Debere Partners Debere Partners Deutsche Bank dbSelect Duet Global Plus Fund Duet Group Earth Capital Partners Ebullio Capital Management LLP Ebullio Capital Management LLP Financial Express Frontier Investment Management LLP Fund Edge Consulting Ganymede Alacrity FX Gemma Godfrey Global Prime Partners Hedge Fund Standards Board Hedge Start Partners LLP Hermes BPK Partners LLP HSBC Alternative Investments Limited HSBC Securities Services – Ireland Jackdaw Capital Jackdaw Capital Leopard Rock Capital Liongate Capital Management KB Associates London Market Prizm Ltd Material Difference Ltd Mercer ML Capital Mulvaney Capital. Natixis Global Asset Management Nero Partners Nick Linnane Oak Hill Advisors (Europe), LLP Odey Asset Management LLP Ogier Ovington Capital Management LLP Ovington Capital Management LLP Perfecta Partners Ltd Pershing Prime Services Rise Partners Limited Rostron Parry Ltd. Schmidt Research Partners Limited Skyline Capital Management LLP Solaise Capital Management LLP Sterling X-AG Sturgeon Capital Sussex Partners Tellurian Capital Management LLP Towry
United States of America Alternative Investment Solutions Prime Clearing Services Newedge USA, LLC 400 Capital Management LLC
Acorn Global Investments Acuity Capital Management LLC Ader Investment Management LLC Agecroft Partners Anchin, Block & Anchin LLP Archway Arden Asset Management LLC. Ascendiant Capital Fund, LP Aurora Investment Management L.L.C. Aurora Investment Management L.L.C. Bank of America Merrill Lynch Bay Hill Capital Management LLC Cambridge Associates LLC Caravel Management LLC Catalyst Financial Partners LLC Citi Cole-Frieman & Mallon LLP Dunn Capital Management LLC Efficient Capital Management, LLC Four Winds Capital Management Frumerman & Nemeth Inc. Fund Associates Fund Tax Services, LLC (FTS) G2 FinTech Gapstow Capital Partners Global Risk Management Advisors, Inc. Hedge Mark Risk Analytics, LLC Integrity Research Associates, LLC Katten Muchin Rosenman Kawa Capital Management Kier Global LLC Larch Lane Advisors LLC. Leonard F. Yablon Lyxor Asset Management M/C Venture Partners Magnitude Capital, LLC Maple Leaf Capital MB Advisors MSF Capital Advisors Pan Reliance Oppenheimer & Co. Inc. Panegyric Marketing Parker Global Strategies, LLC. Phalanx Japan AustralAsia Multi-Strategy Fund, Ltd PNC Mortgage Risk-AI, LLC SEI SL Advisors, LLC Strategic Fund Services, LLC Sue Boca Vox, LLC Telluride Asset Management, LLC Titan Advisors Capital, LLC. UN Consulting UN Consulting Valuation Research Group
Yablon International Inc Vietnam Bizlink Lawyers & Consultants Overall US Clearing Services Firm of the Year US Distressed Portfolio Management Firm of the Year
Bedell Cristin
US Investment Advisor the Year - HFT Strategy US Investor Choice - Liquid Markets US Credit Derivatives Firm of the Year US Innovative Funding Platform of the Year Third Party Marketer of the Year US Overall Accountancy Firm of the Year Page 29 US Fund Administration Software Platform of the Year - ATWeb US Independent Portfolio Manager of the Year - Hedge Funds US Rising Star of the Year - Jay Rogers Sustained Excellence Award - Fund of Hedge Funds US Operational Due Diligence Firm of the Year - Hedge Funds UCITS Platform of the Year - Merrill Lynch Investment Solutions US Weather Risk Management Firm of the Year Page 30 US Leading Investment Consultancy Firm of the Year Investment Team of the Year - The Caravel Fund Specialist Investor Events Firm of the Year - Hedge Funds Asian Pacific Prime Broker of the Year Page 14 US Boutique Law Firm of the Year - Hedge Funds US Best Bear Market Manager of the Year US Non-Directional and Leverageable Trading Strategy Firm of the Year Global Commodities Specialist of the Year US Marketing Firm of the Year - Hedge Funds US Hedge Fund Administrator of the Year - Atlanta US Alternative Investment Tax Firm of the Year Page 27 US Tax Analysis & Compliance Software Solution of the Year - Hedge Funds US Alternative Investment Products of the Year - Hedge Funds Risk Management Advisory Firm Page 22 of the Year US Next Generation Platform of the Year - Hedge Funds Page 11 US Alternative Investment Firm of the Year - Credit Opportunities US Law Firm of the Year - Hedge Funds Page 28 US Multi-Strategy Hedge Fund of the Year Page 28 US Family Office of the Year US Hedge Fund Seeding Firm of the Year US Newcomer of the Year Most Innovative Managed Account Platform - Investor Choice Page 13 US Consumer & Retail Fund of the Year - LNK Partners II, L.P. US Multi-strategy Funds of hedge funds Manager of the Year US Best Volatility Trading Fund - Maple Leaf Revolver Fund US Funding Resource of the Year Global Multi-Family office of the Year Funds of Hedge Funds Adviser of the Year - New York US Investment Director of the Year Innovative Marketing Firm of the Year - US Best Performing Hedge Fund of the Year -Energy US Multi-Strategy Fund of the Year Page 29 US Credit Policy Manager of the Year US Risk Management Outsourcing Firm of the Year Page 30 US Strategic Planning Specialist of the Year - Hedge Funds US Advisory Firm of the Year -Hedged Dividend Capture US Long/ Short Fund Administrator of the Year Asset Tracking Software Solution Provider of the Year - Florida US Commodity Pool Operator of the Year Page 27 US Hedge Fund Sustained Excellence Award Trusted Individual of the Year - Ulf Nofelt Trusted Individual of the Year - Ulf Nofelt US Asset Valuation Services Firm of the Year Most Trusted Hedge Fund Administrator of the Year - United States US Strategic Planning Firm of the Year
Vietnamese Law Firm of the Year - Hedge Funds PCCs Specialist of the Year
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HEDGE FUND AWARDS 2013
SWISS FUND SOLUTION PROVIDER OF THE YEAR
Funds and Advis Ajay Jain, Head of Portfolio Engineering and Gil Platteau-Waldmeier, Head of Switzerland Sales, at Funds and Advisory at Barclays discuss global tactical asset allocation. Three reasons to consider global tactical asset allocation Tactical asset allocation is becoming increasingly popular with institutional investors, as an environment of uncertainty, low leverage and increasing regulation calls for a nimble and flexible approach to asset management. The economic crisis of 2008 changed the landscape of the asset management world dramatically, altering the behaviour of markets and increasing the amount of variables that managers must take into account in order to generate returns. Previously many investors had taken a ‘buy and hold’ approach, investing in long-only mutual funds as equity markets performed consistently well. When equity markets began to lose ground in 2008 the fortunes of hedge funds were initially boosted. They were built on a ‘classic’ absolute return model and promised better returns due to concepts such as leverage and arbitrage. A study from AdvisorBenchmarking.com found that around 40% of investment advisers had client assets in hedge fund vehicles in 2008, compared to just 5% in 2000. Recent underperformance across the industry has created a more challenging environment for traditional hedge fund models. The HFRX Global Hedge Fund Index rose 26.6% in 1999, but has since seen a steady fall in returns, making just over 2% in 2004-05 and losing more than 23% in 2008 when the global credit crisis hit. Returns have improved in 2012 from that low point, but growth has stalled with the index making 3.5% in 2012¹. The Goldman Sachs Hedge Fund Trend Monitor analysed the position of 699 hedge funds with $1.2 trillion of gross assets at the start of the third quarter of 2012. It claimed that only 11% of hedge funds had outperformed the benchmark S&P 500 stock index, while 20% had absolute losses year-to-date, with an average return for all funds of 4.6%². There is still a place for the classic high leverage model offered by many hedge funds, but, in our view, investors also need to consider a more risk-orientated liquid alternative to long-only mutual funds. We believe that global tactical asset allocation strategies (GTAA) are perfectly placed to be that alternative, performing better during the crisis and the post-crisis period than many other funds. GTAAs still offer absolute returns and use hedge fund instruments such as shorts and derivatives, and the tactical approach to allocation is well-suited to today’s fast changing investment environment. This is backed up by performance figures. Bloomberg’s Active Indices for Funds (BBOOFLEX) has been running since 2005 and is a good proxy for
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tactical asset allocation strategies. The index generated double digit returns in 2006 and 2007 and lost just 19% in 2008, with returns moving back to 16% in 2009. Performance during 2012 has generally been healthy with a return of 8.7% .³ The reasons for this contrasting performance aren’t easy to pinpoint, but there are three elements that we believe have played a significant role in enhancing the position of tactical asset allocation strategies. These are leverage, liquidity, and politics. The GTAA model takes a more flexible and liquid approach to allocation, and is well-positioned to manage an uncertain environment, producing healthy returns at acceptable risk levels.
Leverage Pre-crisis, many funds using the ‘classic’ hedge fund model were able to magnify their returns on certain trades by using high levels of leverage. Funds focused on relative value or money market trades are reliant on leverage because basis point movements need to be magnified for their strategy to work. Banks have suffered from increasing capital constraints in recent years as regulators ratcheted up required capital ratios and bad debts spiralled. A variety of reforms have impacted the availability of capital to banks including Basel III, US Tri-party reforms and ICB’s recommendation to ring-fence retail banks from investment banks. The result is that they are deleveraging and cutting lending, including lending to hedge funds via prime brokerage arms. Hedge funds carried 30% less leverage in 2011 than they did in 20074 meaning they have less money to invest and turn into potential profits. A strategy designed around magnifying small margins using leverage may suffer in this environment. Low interest rates globally also mean that leverage cannot be used to profit from the carry trade, which involves borrowing (leverage) in one country with low interest rates and using that to buy assets in another with higher rates.
A reduction of the illiquidity premium The search for yield in a post-crisis environment of low yielding government bonds has increased activity in previously illiquid assets such as high yield bonds. Many funds are used to obtaining a premium for investing in high yield bonds, but, as those assets become more mainstream and liquid, that premium has been reduced. Yields on bonds rated BAA by Moody’s were above 7% in 2000, while equity markets were performing well, and few investors were interested in exploring other investment options. A recent search for alternative returns, during a period of low yields for safe haven bonds and a volatile time for equities, has seen money flow into high yield bonds. The result is
¹&³Sourced from Bloomberg as at December 31 2012 ² Sourced from Goldman Sachs (YTD figure as at June 30 2012) 4 Source: NBER, OECD 5&6 Barclays, Bloomberg and Lipper IM. Performance of the Barclays World Tactical Opportunity Strategy is calculated as total return, net of fees in USD as of 31 December 2012. that yields have fallen to less than 3% in 2012. GTAA strategies, which rely more on dynamic reallocation between liquid assets, have been less affected by this phenomenon and TAA funds have actually benefited from access to a wider range of assets as liquidity increases. This is demonstrated by the relative success of credit hedge funds, which have adapted to the new paradigm by adopting more liquid and beta like exposure, resulting in the correlation between the HFRX Credit Arbitrage Index (hedge fund) and the Bloomberg Open End High Yield US Index (TAA) moving from 0.37 in 2005 to 0.90 in 2012.
Political intervention The third factor that has a significant impact on the performance of different models is politics. In the post-crisis era, a whole range of tools have been used to try and kick-start stagnant economies. Central banks in both the US and the UK have implemented multiple quantitative easing programmes involving huge open market purchases of government bonds, while the European Central Bank has been lending to the region’s banks. Just recently we have seen a new unlimited bond-buying plan in Europe and a third round of quantitative easing (QE3) in the USA which could be as large as US$1 trillion. Both had an immediate effect on the market, since it was impossible to price in all the details beforehand. The supply of money has increased significantly, with intervention generally difficult to predict. A lack
HEDGE FUND AWARDS 2013
ory at Barclays
of demand for debt from the public sector means that we believe different forms of monetary easing will continue, in order to stimulate growth. In the US, the total credit market is currently in excess of US$ 50,000 billion, compared to less than US$30,000 billion in 2000. That explains why new private sector borrowing in the US is at a post-world war II low of less than 1% of GDP, compared to a high of 20% of GDP in 2007. Beyond that, there have been numerous other forms of government intervention globally such as stimulus packages, tax breaks and swap lines. These initiatives are designed to promote market confidence and boost the price of risk assets, but the added influence of these interventions has increased the volatility of price movements, essentially making volatility more volatile. Strategic hedge funds which have carried out longterm, detailed macro analysis of the markets to employ their investment strategy have sometimes found it difficult to handle this extra uncertainty within their investment models. Rapid changes in markets can potentially make it hard for them to generate consistent gains. Global tactical asset allocation funds have an advantage in this scenario because they can move frequently between liquid assets. Investment in futures and indices, rather than physical assets, means positions can be switched quickly in line with market conditions. Funds holding less liquid assets might have a much longer lead time to liquefy investments. This means that GTAA strategies have coped
with the extra uncertainty better, and, in many ways, they have even used it to their advantage, particularly those driven by quantitative models.
Conclusion We believe that the GTAA model is a useful alternative strategy for institutional money managers to consider in light of the current market cycle. It is well-suited to dealing with uncertainty, invests in very liquid assets and reallocates regularly to achieve stable returns. This is highlighted by a 2012 return of over 8.5% for tactical asset allocation strategies, compared with just 3.5% for hedge funds. We would expect this situation to persist for the next few years, as the same conditions of low leverage, significant political intervention and a disappearing illiquidity premium continue.
The portfolio managers use a global tactical asset allocation approach focusing on liquidity, downside risk and cost efficiency, while avoiding excessive leverage. Portfolios are invested using a proprietary investment methodology that analyses several thousand fundamental and technical indicators on a monthly basis to determine optimal new asset allocations. Our flagship Barclays World Tactical Opportunity Strategy, for example, is a global macro strategy designed to seek uncorrelated returns across major asset classes and has delivered positive returns every year since its inception in June 2007, with accumulated return of 51.89% during the period.6 All strategies are available in fully hedged CHF and EUR share classes and are approved by the FINMA for public distribution in Switzerland.
This new investment paradigm is here to stay for now, meaning that tactical asset allocation funds should be included in every investment portfolio.
About Funds and Advisory at Barclays Established in 2005, Funds and Advisory at Barclays is a leading investment management specialist, providing a broad range of services to institutional clients and distributors globally with more than EUR 22.3 billion5 of assets under management. We specialise in multi-asset absolute return onshore regulated UCITS vehicles with actively managed quantitative investment strategies.
Company: Funds and Advisory at Barclays Web: www.barclays.com/fundsadvisory Name: Gil Platteau-Waldmeier Email: gil.platteau.waldmeier@barclays.com Telephone: + 41 (0) 44 204 5136
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HEDGE FUND AWARDS 2013
Global Macro fund of the year, UK Innovative fund manager of the year, UK fund manager of the year: Multi-Strategy
Armstrong Investment Armstrong Investment Managers LLP (AIM) is a global macro manager specialising in inflationbenchmarked investment solutions with controlled volatility. AIM was formed in 2009, but the investment team has worked together for over 12 years, previously managing billions of dollars at UBS and Insight Investment. AIM have quickly established themselves as a leading discretionary macro manager based on their strong and consistent performance. The firm’s managing partners; Dr. Ana Armstrong and Patrick Armstrong are well known, regular contributors to several business news networks and a wide range of print media. Their thought provoking, and often contrarian views on the global economy and markets have helped AIM become recognized for their effective top down investment approach. Acquisition International speaks with the partners of Armstrong Investment Managers LLP about their firm and their recent haul of four International Hedge Fund awards.
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Dr. Ana Armstrong (Ana) comments, When we established AIM, we wanted to create a client centric, entrepreneurial and innovative culture. Achieving this has been one of our greatest early successes. The firm is an eclectic mix of backgrounds in terms of country of origin, academic backgrounds, and perPictured left to right: Gideon Nell, Ana Armstrong, Patrick Armstrong, Eugen Fostiak
The geographic mix continues outside of the partners. The two investment analysts, one from Austria, and the other from Cyprus both have computer science degrees, and are doing postgraduate work in Physics and the CFA programme. Their compliance
The firm’s flagship global macro fund, the Armstrong Diversified Dynamic Solution (DDS) fund has just won an International Hedge Fund award for the UK Global Macro fund of the year. DDS is different from many macro funds in that it offers weekly liquidity, it is domiciled in Dublin, and it aims to significantly beat inflation rather than just targeting absolute returns above zero.
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Gideon, comments The wide ranging appeal of an inflation plus target is shown through the fund’s diverse investor base which includes family offices, high net worth individuals, fund of funds and pension assets. Our clients have told us that our objectives in terms of risk, and return are aligned with what they are trying to achieve.
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Ana notes, DDS exhibits significantly lower volatility than most macro funds. This strategy has delivered much higher risk adjusted returns than almost any fund in the macro sector. Its diversified portfolio of positions significantly reduces risk, and we always ensure a very high degree of liquidity within the fund. Patrick adds, Its strong performance has been driven by a very diverse set of positions and strategies over the years. Successful long positions in emerging market currencies, tactical positions in Italian bonds, and long positions in luxury goods companies have added significantly to performance. Timely shorts in European banks and U.S. natural gas have also generated significant returns for the fund.
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Patrick Armstrong (Patrick) comments, We have never been scared to stand out from the crowd. We knew that being different would be an advantage. If you invest like everyone else, you get returns like everyone else. The industry didn’t need another “me too” manager.
officer is a Welshman with over 20 years experience, and a newly recruited sales man is from Belfast, Northern Ireland.
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AIM’s offices are located in a beautiful Georgian building just next to London’s scenic Regent’s Park. The location is a few minutes north of Mayfair which is the customary home of most London based hedge funds. The Marylebone area was chosen to be “a bit different”, a theme that is very apparent in almost everything AIM does.
sonality types. Ana was born and raised in Belgrade, Serbia, and did an MBA and Ph.D at Imperial College in London. She then joined Coutts bank as an analyst and moved to Fischer Francis to become a fixed income and futures trader. Patrick was born and raised in Saskatchewan, Canada, and did an MBA at the Rotman School of Management, University of Toronto and is a Chartered Financial Analyst. He worked at TD securities as a derivatives analyst and then moved to Deutsche Bank to become an equity analyst. Eugen Fostiak (Eugen), partner at AIM, is from Lviv Ukraine where he did his MSc. in Finance and then joined Deutsche Bank London as a quantitative emerging markets analyst. These three make up the core of the investment team and they all met and began working together at UBS London in 2000. They moved as a team to Insight Investment in 2003, where they started working with Gideon Nell (Gideon) the final partner at AIM. Gideon is from Johannesburg South Africa, and did his Business degree at the Global School of Business in South Africa. Gideon began his investment career as private client portfolio manager at PPM Stockbrokers and he then moved to Rothschild Asset management in London.
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Husband and wife team, Patrick Armstrong and Dr. Ana Armstrong founded Armstrong Investment Managers LLP (AIM) following successful careers at UBS, where they headed investments for the $6 billion Managed Accounts Programmes, and at Insight Investment, where they created and headed the firm’s $2 billion Multi-asset group.
Ana highlights another difference which AIM view as a clear advantage, Our focus on risk and inflation reflects the primary concerns of most investors, namely protecting against the risk of capital loss in the short term and growing capital at a rate which is significantly higher than inflation over the longer term. Portfolio risk management lies at the heart of our capability and underpins our entire investment process. We have developed sophisticated quantitative systems which we use to forecast risk-premia across a wide range of assets. We are very pleased with all of the awards we have received. We have become recognised as pioneers in global macro investing, and we believe the most innovative fund manager award is due to our focus on the macro big picture for investment returns
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HEDGE FUND AWARDS 2013
and UK Macro fund manager of the year
Managers LLP
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When we established AIM, we wanted to create a client centric, entrepreneurial and innovative culture. Achieving this has been one of our greatest early successes
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combined with our proprietary risk management systems and bottom-up risk management.
5. Illiquid investment instruments are not appropriate for funds which offer liquidity.
in terms of performance, asset growth, and they have no intention of slowing down now.
AIM put a great deal of emphasis on risk management and managing assets within a predefined risk budget is the first step of their investment process. AIM have developed their own proprietary, real-time risk management, asset allocation and portfolio construction system which they call “AIM-folio”. The system allows for the incorporation and analysis of all liquid asset classes and all their related investment instruments on a global basis under one facility.
Patrick adds, The world has become too short sighted in its investment horizon. There are thousands of CTAs trying to trade off of past price movements and holding positions for minutes at a time. The real opportunities in markets are now with managers willing to take a longer term view on what is happening in the global economy and its impact across all asset classes. Managers with the ability to take both long and short positions across many different types of assets and regions will never be left wanting for opportunities. Our flexible approach is well suited to the current market environment as there are significant divergences across many regions in terms of economic growth and many investment possibilities created around the consequences of the debt burden many western governments are facing. The broad opportunity set we consider creates many attractive investment possibilities, and this also offers a great potential for diversification within the fund.
Ana sums it up, We were fortunate to become profitable as a business within a year of our first fund launch. We now have over $200 million in strategy assets and award winning performance with our DDS fund.
1. Markets are not efficient 2. The largest inefficiencies in markets are now at sector and asset class level, rather than in individual securities. 3. The broader the opportunity set, the greater the potential for excess returns. 4. Real diversification is the most efficient method to control portfolio risk.
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AIM have built their investment process around five key investment tenets:
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Eugen Fostiak comments, AIM-folio was developed because there was no wholly integrated system on the market with the functionality to include long and short positions across many different types of assets and derivatives. We need to be aware of risks before we trade, and this system makes that possible. AIMfolio gives us a significant competitive advantage and allows the investment team to run real-time ‘what-if’ scenario analysis before the implementation of any portfolio changes.
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We are truly delighted with the shape that we find ourselves in today. When you extract a team from a large corporation to set up independently, you know many investors want to see at least three years of good numbers and that clients want liquidity and transparency. We believe we are in a very strong position going forward. The Armstrong Diversified Dynamic fund is open to new investors and the firm will also be launching a Luxembourg UCITS version of this strategy in Q1 2013.
Having been named the Macro fund manager of the year is a recognition of our team’s success in terms of investment performance and an acknowledgement of investors’ appreciation of our investment approach and philosophy. AIM’s growing reputation has been built by way of their ability to take advantage of opportunities in a timely manner, and their distinctive investment style which identifies long term themes and implements shorter term, tactical trading strategies around these longer term views. They are off to a very good start,
Company: Armstrong Investment Managers Address: 4 Devonshire Street, London, UK, W1W 5DT Email: aim@armstrongim.com Web: www.armstrongim.com Telephone: +44 (0) 203 440 5060
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Armstrong Diversified Dynamic Solution Fund The Armstrong Diversified Dynamic Solution (DDS) fund is a discretionary global macro fund which targets a return of at least inflation plus 7% per annum, over a market cycle, with no more than two thirds of equity volatility.
Global Opportunities
Tactical Positions
Armstrong Investment Managers LLP * Global Macro Fund of the Year * Macro Fund Manager of the Year
* Fund Manager of the Year - Multi Strategy * Innovative Fund Manager of the Year
Real Returns
Armstrong Investment Managers LLP (AIM) is a London based asset manager which specialises in managing inflation benchmarked investment solutions with controlled volatility. Our top‐down global macro investment approach uses advanced quantitative models and takes advantage of long and short opportunities across different regions and asset classes. AIM’s focus on risk and inflation reflects the primary concerns of most investors, namely the risk of capital loss in the short term and the need for investments to significantly beat inflation over the longer term.
For more information, please call us on +44 203 440 5060, email at aim@armstrongim.com www.armstrongim.com * 2013 International Hedge Fund Awards : awarded by Acquisition International in partnership with prequin. Global Macro Fund of the Year – UK: Armstrong Diversified Dynamic Solution Fund , UK Innovative Fund Manager of the Year- Armstrong Investment Managers , UK Fund Manager of the Year - Multi Strategy – Armstrong Investment Managers, UK Macro Fund Manager of the Year- Patrick Armstrong. Issued by Armstrong Investment Managers LLP (“AIM”) which is authorised and regulated by the Financial Services Authority with FSA number 503693. This advertisement is aimed at "Investment Professionals" as described in Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (as amended). Any other readers should disregard its contents and should not rely on it.
HEDGE FUND AWARDS 2013
US NEXT GENERATION PLATFORM OF THE YEAR
HedgeMark Kenneth S. Phillips, Chief Executive Officer at HedgeMark, describes the company, its strategy, and its pleasure at receiving the award. It’s been said many times, but is worth repeating, “the respect of your peers is the greatest compliment”. HedgeMark’s global team offers a big “thank you” to Prequin, and those others that offered their support for this award. We began this journey just a few short years ago and it’s been a privilege to have met with so many people and for our efforts to be acknowledged so early in our development. We view our industry from the perspective of the investor; we are not bankers in the traditional sense, our backgrounds are in asset management, consulting, risk management, investment and operational due diligence, law, accounting and securities operations. We are fiduciaries. We do our best to serve clients, always seeking to put our feet in their shoes. Transparency, independent asset control and governance, risk aggregation and modeling; these are just a few of the basics values upon which HedgeMark was founded. HedgeMark Risk Analytics was our first undertaking; we invested heavily in the development of a positionlevel risk analytics platform that could lead the industry with respect to features, functions and benefits. From sources of position-level VaR, portfolio stress testing and scenario modeling, to Brinson-style Performance Attribution, we are quickly becoming a meaningful source of daily and monthly data for both hedge fund investors and their managers. Our risk team includes some of industry’s leading minds, who combined have decades of experience working with the most complex hedge funds. Risk forms the foundation on which we have built our managed account business, a business that spans two distinct offerings. Our managed account infrastructure business, or private funds business, is for the largest hedge fund allocators. These investors are engaging some of the industry’s best known managers, while at the same time seeking fiduciary level investment structures and governance. Besides wanting better asset control, supported by a daily (t+1) position level risk and compliance system, these investors also want their assets to be fully segregated. They use HedgeMark to outsource the fund formation and ongoing operational duties, gaining access to a reliable counter-party with deep experience with complex strategies. HedgeMark has been fortunate to work on several dynamic infrastructure projects in partnership with prestigious banks and pension managers. This segment of our business allows investors to focus on their highest value tasks, the execution of their investment strategies and selection of managers, while HedgeMark and BNY Mellon focus on providing the full range of financial services that covers everything other than making investment allocation and trading decisions. The third leg of our strategy is our Managed Funds Platform. It’s a stage of our development that we have been anxious to expand, while recognizing that all other aspects of our infrastructure had to
operate seamlessly before we could launch our first fund. During 2012 we began launching HedgeMark funds and we have been building capacity for robust growth in the coming years. With access to a diverse selection of approved fund managers, representing a broad range of strategies and geographies, we believe the HedgeMark platform, in addition to its suite of industry-leading analytic tools, offers a compelling range of client solutions for the most demanding investors, and their advisors. The three legs of the HedgeMark stool, Risk, Infrastructure, and Managed Accounts, can each stand alone as individual businesses, and at most firms they are separate. Together, however, these services represent a unique and fully integrated investment platform that can support the largest and most demanding investors – and can do so while aligning HedgeMark with the investor, thereby optimizing fees and expenses. Our range of capabilities are broad, our technologies sophisticated and flexible. Managed accounts aren’t a fad, the future growth of this sector and the many benefits investors derive from these structures aren’t accurately expressed in today’s platform AUM statistics. Alpha is all around us, investors are free to invest in aggressively managed funds, conservatively managed funds, synthetic products, and funds of every size and complexity. At the end of the day, however, properly supervised investments require an institutional quality governance structure, supported by accurate, timely, and actionable data. Only with the benefit of timely data can investors, and their advisors, properly supervise their investments and ensure compliance with investment policies, guidelines, goals and objectives. Position-level data, with proper security oversight to protect proprietary manager data and techniques, are part of that solution and are key components of consistent performance and risk management. Without such data, accurate performance measurement and evaluation are difficult to attain. Even the process of building diversified portfolios is enhanced with portfolio construction and back-testing tools that feature
position level transparency and risk aggregation. Portfolios can more thoughtfully be created, holdings better diversified, and alpha extracted more efficiently with fewer offsetting transactions and friction costs. People, not just the data or technologies, will make the difference over the long run. People are necessary for innovation, and people are necessary to execute even the most basic and routinized tasks. A commitment to recruiting the best people is another cornerstone value at HedgeMark. We will continue to add to our team, in our areas of research, operations, accounting, risk and client service, and we remain committed to providing industry-leading solutions. This includes our large team of software developers who are deeply involved in the development of new applications; all designed to support investors in better understanding their investments, their sources of return and sources of risk. If you are thinking about managed accounts, a managed account platform, or just wanting to learn more about hedge fund risk analytics, we welcome your inquiry. We are headquartered in New York, but have team members in Europe and Asia. As an affiliate of BNY Mellon, we are a company with a broad, global footprint. Talk to us about your objectives, we will quickly know whether HedgeMark can support you in efficiently and cost effectively achieving your specific goals and objectives.
Company: HedgeMark International, LLC Address: 780 Third Avenue, 44th Floor, New York, New York 10017 Email: info@hedgemark.com Web: www.hedgemark.com Telephone: +1 212-888-1300
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HEDGE FUND AWARDS 2013
ASIAN FUND OF HEDGE FUNDS OF THE YEAR
Skybound Capital - The China Red Fund “Theodore” Qi Shou, is the International Chief Investment Officer for the Skybound Group and Skybound Capital (HK) Limited, in particular. Here he gives Acquisition International a detailed description of the firm, its strategy, and its reaction to winning the award.
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He observed that the most commonly asked questions in the industry are: “What are your total assets under management?” and “What is your track record?”, adding that it is clear that a business simply cannot grow the former without a successful latter.
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Describing Skybound’s reaction to winning the award, Mr Shou said that the firm was really pleased that within a short time, our hard work and determination to achieve good results were acknowledged”. He continued: “This award, together with other industry-wide recognition, will drive us to continue our endeavour to service clients and deliver returns. Discussing how the company has adapted to the difficult market conditions experienced in 2012, Mr Shou stated that Skybound doesn’t “profess to know all the
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In a year which has seen the systematic consolidation and dissolution of several Fund of Hedge Fund houses, Skybound Capital is proud to have managed to raise capital and deliver strong, stable returns to investors. According to Mr Shou, the reason for this success can be attributed to Skybound’s dynamic and adaptive culture as an investment firm.
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Intrinsic to the way Skybound develops and implements investment decisions is an awareness that the only way to navigate the ever-changing dynamics of financial markets is to remain creative, adaptive and pro-active,” he explained. “This approach has guided The China Red Fund and other Skybound products through what has indeed been a difficult year for fund managers.
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We pride ourselves on our intellectual capital, risk management systems and an ability to do things differently from ‘the rest of the pack’,” explained Mr Shou. “From the shades of our office walls, to the artworks that adorn them, the brightness of the chairman’s cast array of ties and the variety of people who work here, it is immediately evident that there is something different about Skybound. And we are not different for the sake of being so; we simply operate on the principle that if we do things the same as everyone else, how can we possibly expect a different outcome? With its roots in Africa, ambition for the global markets and strong performance of its products, Skybound is already different.
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Skybound Capital Group is a global asset manager, providing various investment products (including multi-manager portfolios) to family offices, private clients, advisors and institutions with a proven track record for preserving capital in tough market conditions while achieving strong growth in more favourable climates. The Group has offices in Cape Town, London, Mauritius and Hong Kong. Skybound Capital (HK) Limited focuses on managing the Group’s international and Asian funds.
We are extremely proud of the performance since the company was founded,” he continued. “We like to think that the numbers – both in terms of return and risk management – speak for themselves and clearly demonstrate a robust and effective ability to successfully deliver below market average volatility in the bad times while achieving above market average growth in the good is a powerful combination for any investor.
As the firm’s Chief Investment Officer, Mr Shou, alongside a team of Skybound investment professionals from the company’s global network, has been the tour de force behind China Red’s success in 2012. It was clear in his opinion that in order to avoid “the herding effect so often typical of fund management businesses, China Red had to be different, and better”. This was achieved by applying a hybrid approach to the fund’s structure. Although the fund remains predominantly invested in a diverse array of deeply skilled and carefully selected fund managers, China Red also incorporates beta and alpha exposure by investing directly into ETFs and on rare occasions some single positions
The core of Skybound’s expertise remains in the diligent selection and discovery of specialised managers through which to best express the team’s market view. The ultimate goal of every Skybound fund is to achieve consistent, strong returns while keeping volatility down to an absolute minimum. In order to do so, the team has sifted through, and continues to explore, hundreds of managers who invest within the scope of China Red’s regional mandate, conducted extensive due diligence and constructed a “best of the best” portfolio which is both lucrative and diversified enough to safely navigate volatile market conditions.
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Thereafter the fund and its underlying positions remain closely monitored at all times and undergo rigorous risk management testing and restructuring if the need arises,” continued Mr Shou. “Winning this award is a testament to the successful implementation of this detailed, thorough and creative process, and we are pleased and grateful that, although over a relatively short period of time, our hard work and determination has been acknowledged. Looking ahead, Skybound’s goals are in essence the same – to maintain strong performance and protect investor capital – however the firm remains extremely cognisant of the fact that markets are ever-changing and those wishing to fruitfully participate therein must remain vigilant and adaptive.
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Balancing market trends and economic conditions with our core investment philosophy has resulted in a successful model of adaption,” explained Mr Shou. “Skybound’s team has produced a suite of funds that understand and manage risk extremely effectively, offering – over an extended period – well above average growth with below average levels of volatility.
“In this way, China Red has been able to actively extract value on an opportunistic basis, grounded in the team’s extensive knowledge and understanding of both fundamental and macro investing, as well as market-timing skills,” observed Mr Shou.
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answers to the future, or even the past for that matter”. The firm believes that knowing the answer isn’t as important as adapting to the answer.
We are always seeking out new ideas, opportunities and strategies and pride ourselves on the openmindedness with which we approach every potential investment. This combination of innovation and indepth due diligence, we believe, will put us in good stead over the next few years, concluded Mr Shou.
Company: Skybound Capital Group Address: Theodore Qi Shou Email: theodore@skyboundcapital.com Web: www.skyboundcapital.com Address: 21/F Chuang’s Tower, 30-32 Connaught Road Central, Central, Hong Kong Telephone: +852 2253 6296
HEDGE FUND AWARDS 2013
MOST INNOVATIVE MANAGED ACCOUNT PLATFORM - INVESTOR CHOICE
Lyxor Asset Management Lionel Paquin is Head of the Lyxor Managed Account Platform. Here, he describes the company’s culture, its reaction to winning the award, and shares his insights into the hedge funds industry. tive Managed Account Platform, as innovation is key for the firm. “I would say that our first thought goes out to our investors, who we’d like to thank for their continuous support and for having granted us that award,” said Mr Paquin. “We see in that award a further confirmation of our strategy and business model and it’s an encouraging signal for 2013.” Mr Paquin believes that the company has a strong identity and noted that even the managed account business within Lyxor has its own team culture.
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We’re not a system provider firm – we are an asset manager,” he stated. “It’s not just about having the right systems and the right computers; it’s also about having the right people. Our people are dedicated and available to our investors.
Mr Paquin stated that the firm distinguishes itself from its competition in a number of ways, the first of which is firm’s length of experience.
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We created the business in 1998, so in a sense we’ve been a pioneer and we’ve always been a leader in managed account investing,” he observed. “We are the biggest in size and we have the largest experience in that business. Another aspect is the fact that the offering, meaning the comprehensiveness of the strategies, the number of funds is very broad.
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“Another way we differentiate ourselves, at least from some of our competitors, is that we are a fullyfledged asset manager. This is our organisation, this is our business, and this is our culture. We believe in fiduciary responsibility and we look like the institutions we partner with, we look like our clients. Mr Paquin acknowledged that 2012 saw tough times across the world; however he stated that tough times and challenging environments also provide opportunities. “Performance in 2012 was not a given. However, the Lyxor Managed Account Platform posted an
“On our side it’s not the first crisis we’ve been through and we are lucky to run a business model that has been very frequently and extensively tested through those crises,” he explained. “We passed successfully many tough market periods and we benefited from those times.” Consequently there has not been a major change in Lyxor’s business model in 2012. Mr Paquin noted that the firm was ready for the tough environment, has the knowledge to manage such situations, and didn’t need to change anything significant in its business and organisation.
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Lyxor has been a reference player in its field since it was created in 1998, and the firm has seen a strong and steady growth in assets under management. The firm believes that this growth is testament to the success of its original approach and provides a solid basis on which to build in the future.
average performance of +3.32% with 10 out of 13 strategies delivering positive returns in 2012. Moreover, if we look at the managed account platform as an investment universe, we can see that one of Lyxor’s FoHF based exclusively on Lyxor’s managed accounts, posted an annual performance of close to 6%”.
We are a solution driven asset manager, meaning that flexibility and adaptation are part of our everyday business,” he commented. “That’s part of our commitment to our investors so we know how to adapt and we know how to respond.
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These are two areas we’re working on and where I’d say our way of doing things is valuable and very beneficial to investors,” he added.
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Lyxor Asset Management specialises in optimised and innovative investment solutions. The firm has focused its development on four areas of expertise: index-linked funds; structured funds; alternative funds; and multi-asset management. This specialisation strategy has enabled Lyxor to become an expert in its niche businesses, and one of the leading specialised asset managers worldwide.
He explained that innovation is straightforward for Lyxor, and that the firm has a number of very exciting projects lined up. One such project is exploring how to apply the managed account framework to less liquid strategies than the firm would usually use. Another is looking how to apply the retained managed account framework to early stage managers, to very innovative and newly-created hedge funds.
“What we will continue to do, is to maintain that very close relationship with our investors. I see no better approach that continuing to be responsive to investors, to talk to them, to be visibly present, to listen to what they want and therefore to provide them with the right solution. Looking to the future, Mr Paquin stated that Lyxor will be recruiting as it is developing, adding that the firm is ready for growth and has promising projects. “Since we were created we have experienced so many changes in the industry, and triggered some of them. I am convinced that we’ll face new challenges and new revolutions in the coming three years. I hope we’ll have a role to play there, and we’ll be recruiting and growing for sure,” he concluded.
Mr Paquin noted that institutionalisation was a key trend in 2012 across both investors and managers, which he believes creates opportunities for the company. He also stated that dispersion of performance was a remarkable trait for the year. “We saw in 2012 more time spent by investors in choosing the strategies, picking the right managers and therefore using transparency prior to making investment decisions,” he explained. “That has been something very material and really remarkable in investors’ behaviour and we can leverage on that.” Lyxor was very happy to win the award and was particularly proud to be nominated the Most Innova-
Company: Lyxor AM Name: Lionel Paquin Web: www.lyxor.com Address: Tours Société Générale, 17, Cours Valmy, 92987 Paris La Défense Cedex
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HEDGE FUND AWARDS 2013
Citi
ASIAN PACIFIC PRIME BROKER OF THE YEAR David Murphy is Head of Citi’s Prime Finance unit in Asia-Pacific, and Hannah Goodwin is Head of Prime Brokerage. Here, they speak to Acquisition International about winning the prestigious title of Asian Pacific Primer Broker of the Year 2012.
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However they will almost certainly continue to require the services of prime brokers in terms of using leverage, shorting securities and the other services their prime typically provides,” he commented.
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“Inevitably you’ll see changes with what prime brokers do, partly in response to regulatory constraints and sensitivity to balance sheet. I think there will be changes at the margin, not changes in the fundamentals. If you look at who are the top brokers at this time, I would wager that they won’t all be the same in three years’ time. Ms Goodwin stated that the hedge funds business constantly evolves and that strategies change, noting that the hedge fund managers that are leading in their space are always a step ahead. “Having that sort of change mentality and people who are eager to look at where the market is going and where hedge funds are going is key,” she added.
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“Winning an award like this is very satisfying and to realise that the team and platform you’ve put together is getting recognition from our clients is great,” added Ms Goodwin. “For a team who’ve all worked together for a number of years now, it’s a great accolade and will prove that their efforts are positively impacting our clients and the firm. Discussing the current market conditions, Mr Murphy highlighted the fact that the economy in general has been growing relatively slowly, noting that financial institutions have had trials and tribulations in terms of generating adequate profitability etc. However, he stated that the hedge fund industry is still managing in excess of $2 trillion. “I wouldn’t want to deny that, in some respects, conditions have been challenging. Equally we should say that there’s a very good business opportunity for prime brokers like Citi. International hedge funds have redeployed a lot of capital in Asia. Moreover, whilst the local hedge fund community has had its struggles, there have been some outstanding local
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“You do have to change with the times. In the hedge fund industry you have seen in recent years larger funds attract most of the incremental capital, and a diminishment of the relative importance of equity long/shorts. They’re still very important in the hedge funds space, but a little less so on a relative basis.” Ms Goodwin believes that Citi’s success can be attributed to a number of factors, the first of which is building a truly local franchise. Citi determined that it was equally important in the early growth phase of the business to work with local managers as well as global managers, unlike like some competitors that initially focused on global clients.
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In 2013, Mr Murphy stated that the firm will “continue to get in early, stay late, and work to make what we do as efficient and effective as possible in terms of price and otherwise”. “Ultimately hedge funds want and need to make money for their investors, and I think Citi is well placed to help clients do that, he concluded.
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Citi has remained committed and focused on the prime finance business and continued to invest in their people and platform during this time. This award is quite gratifying to see that clients have taken notice of all that we are doing,” he commented. “People were genuinely thrilled to win the award because it’s recognition of years of effort to build up a platform that’s worthy of the award.”
hedge funds with excellent launches in recent years and we expect that to continue.
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Mr Murphy stated that Citi was delighted to win the award, particularly Ms Goodwin who has been with Citi in the region for a number of years and was instrumental to building the firm’s presence in the region.
This business is something that any firm has to be committed to because there is an inordinate amount of investment that is needed on a yearly basis to keep the product at the level that our clients need it to be at. Citi continues to make this commitment and we are well positioned for continued success in this space.”
We also worked continuously throughout the GFC with our clients and I think, considering the issues Citi had at that point, clients were very appreciative of the way we partnered with them when they may have experience their own difficulties, she observed. “Many of the clients that we have today were clients that we had six or seven years ago, so we’ve actually grown with them and feel we have partnered well with them. We haven’t had a huge turnover in staff so they know that they have the same people that they come to know and trust.”
Looking ahead, Mr Murphy believes that hedge funds are here to stay, stating that the financial markets need risk capital. He described hedge funds as “repositories for the risk bearing that the financial markets and the economy needs”, and predicted that hedge fund strategies will change in terms of asset class.
Company: Citi Web: icg.citi.com Address: 3 Garden Road, Citi Tower, Hong Kong Name: David Murphy Email: david.murphy@citi.com Telephone: 852-2501-2665 Name: Hannah Goodwin Email: Hannah.goodwin@citi.com Telephone: 852-2501-8353
HEDGE FUND AWARDS 2013
HAS YOUR HEDGE FUND INVESTMENT PERFORMED LIKE THIS?
$219,000
$149,000 $100,000
May 2008
December 2009
December 2012
The Offshore Portfolio has returned 18.3% per annum since its launch in May 2008.
AUSTRALIAN PLACEMENT AGENT OF THE YEAR
- Strategic Capital Services Limited
One of Strategic Capital Services’ main distinguishing features is the length of Mr McNaughten’s involvement in the industry. He has been marketing hedge funds at the company since 2001, and prior to this worked in investment banking at Bankers Trust and Credit Suisse Financial Products in London as a structured derivatives marketer.
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At Bankers Trust I was part of the capital markets team which worked very closely with the private bankers,” he explained. “We were involved in marketing a broad range of structured derivative products, hedge fund of funds, private equity fund of funds, etc. so I have been involved with marketing alternative investments for many years to both institutional and ultra high net worth clients. “Another key characteristic of the firm is its tendency to work with a small number of managers at a time, typi-
investors such as insurance companies, pension funds, endowments and sovereign funds.
“I don’t represent competing strategies and generally will have no more than three to four managers at any one time that I work with,” continued Mr McNaughten. “All of those tend to be at different stages of their growth cycle as well. It is important to be very selective and to be known for representing high quality managers.
Looking to the future, Mr McNaughten stated that he will keep the business small and focused as that has been and continues to be a successful strategy. He will continue to look at enhancing the business through technology and he will continue to develop his investor network.
Strategic Capital Services has adapted to the current economic environment by investing in technology to make the company as efficient as possible, present managers effectively and provide information in a manner that makes life a lot easier for investors.
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It’s also been a case of broadening my investor base substantially over the years, both in terms of geography and the types of investors, because obviously the market has changed markedly from when I first started marketing hedge funds,” observed Mr McNaughten. “Having worked in London for 19 years and now being back in Australasia I have developed a substantial network of investors across Europe, the Middle East, Asia and Australasia. “Hedge fund investors used to be predominantly high net worth investors. Today institutional investors are becoming far more active and often account for the majority of the inflows. Whilst private banks, family offices and fund of funds are still very active it is important to also cover a broader range of institutional
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“To then get confirmation that I have won the award, I think it really helps reinforce the fact that the approach SCS takes is a bit different – it hopefully differentiates us from our competitors.”
cally resulting in long working relationships with those managers and over USD 800m raised for them to date.
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Discussing his reaction to receiving the Australian Placement Agent of the Year award, Mr McNaughten stated that being nominated alone was an honour.
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Anthony McNaughten , Director at Strategic Capital Services Limited, gives Acquisition International his reaction to winning the award and a detailed look at the company.
I expect that the assets raised by SCS will increase substantially as I am excited about the managers I am working with at the moment. They’ve been doing a great job and if you’ve got great managers that are performing very well then with the right marketing you can expect to see strong asset growth. Ultimately that’s what I strive for with my managers, he concluded.
Company: Strategic Capital Services Limited Name: Anthony McNaughten Web: www.scs-ltd.net Email: anthony@scs-ltd.net Address: Unit 3401-2, 32th Floor, AIA Tower, 183 Electric Road, North Point, Hong Kong Telephone: +852 3166 5945
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HEDGE FUND AWARDS 2013
Giving global investors access to Australian and Asian alternative assets
Unrivalled access. Unwavering Partnership. Unparalleled expertise Triple A Partners is a unique Asian alternative fund partnership. We have offices and affiliates in Hong Kong, Los Angeles, Tokyo, Sydney and London offering a strong global distribution network and world class service standards. The members of our highly knowledgeable senior management team have each worked in the fund management industry for over 20 years, during which time they have built a proven track record and strong personal reputations. Our corporate logo reinforces our approach. In Asia, the evergreen bamboo plant is associated with longevity and the bundle of three individual stalks signify strength through partnership - it is easy to break a single stalk of bamboo, but difficult to break three bound together.
www.aaapartners.com.au BEST ASIA MEZZANINE FUND OF THE YEAR
- Asia Private Credit Fund (“APCF”) “We are serious in protecting our investors’ capital and have negotiated hard to include the best legal and operations enforcement mechanisms in all of our deals,” added Mr. Lau.
Gen2 Partners Ltd is an independent asset management firm in Asia, currently with firm-wide AUM of approximately US$500 million, with offices in Hong Kong (HQ), Tokyo and Xiamen comprising over 30 experienced investment professionals.
Discussing highlights from 2012, he stated that “Gen2 Partners were pleased to have another successful full exit in the middle of 2012 with a gross IRR of 33%. The deal was a one-year offshore loan granted to a high-end eco-style holiday villa project in a secondtier province in China.”
The firm focuses on growth companies with specific deal size of US$5 to 20 million, while its peers usually go for deals over US$50 million. Gen2 Partners mainly do selfsponsored deals, and as the company has a proprietary network for deal sourcing it does not rely on brokers or intermediaries. The firm’s return profile has a shallow Jcurve, and it has a proven record of “Timing the Exit”.
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The team was proud to be recognized by investors after working extremely hard these past three years to build an unparalleled private lending/equity platform, said Mr. Lau. In order to adapt to the current market conditions, Gen2 Partners has had to become more vigilant and cautious when sourcing attractive deal flows that have multiple exit strategies.
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Gen2’s Asia Private Credit Fund (the “Fund”) is an opportunistic credit focused special situations fund with a predominant focus in Asia with an emphasis on Greater China. The Fund seeks to benefit from dislocations in the markets and favours investments in small and medium enterprises with persistent and visible growth. The Fund also pays out a target yield of 8% p.a. Target return: 25% gross IRR and a 2.0x multiple for the Fund.
The project aims to be the first platinum-certified LEED resort in China,” explained Mr. Lau “It is located on a mountain which is famous for its natural environment and was ranked 18 among ‘The 45 places you should see in the world for 2012 by the New York Times. The project has won multiple awards since its grand opening, including the Diamond Award of China’s Most Successful Design Awards. Looking ahead, Mr. Lau stated that the current dislocation in the capital markets presents unique investment opportunities in the credit markets in Greater China.
In three years’ time, Mr. Lau predicts that Gen2 Partners will have launched its third fund targeting US$500 million +, “We will be even more focused and will rebrand our business to Adamas Asset Management. The meaning of Adamas is diamond, which has the most structurally robust set up, that is created only by withstanding immense heat and pressure. It signifies rarity, exclusivity, safe, value and strong. The 4Cs of diamond examination coincides well with the 4Cs of credit assessment.” “We will be a recognized leader in Asia and well on our way of reaching US$1 billion in AUM,” he added.
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Barry Lau, Managing Partner and CIO at Gen2 Partners Ltd, discusses the firm’s reaction to winning the award, it’s highlights in 2012 and the opportunities he sees for the company in 2013.
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In conclusion, Mr. Lau offered his advice to the other nominees for the award, Be a recognised leader in the field. Build up the best deal sourcing capabilities in this space. Have the right trusted strategic partners and advisors supporting your business. Be focused. Hire smarter people.
“Most of the banks have already hit their loan quota or prefer larger customers who have ‘perceived’ better credit records and lower transaction costs to service,” he explained. “Tighter monetary policies and stricter loan approval process further drained liquidity.” “We address a niche sector in private lending middletiered companies need short-term financing with amounts that other alternative lenders do not cover due to size or duration limitations. With the same determination and diligence, we will continue to deliver exceptional returns for our investors next year.”
Company: Adamas Asset Management Name: Barry Lau, Managing Partner and CIO Web: www.adamasam.com Email: ir@adamasam.com Address: 2101-02 Infinitus Plaza, 199 Des Voeux Road, Central, Hong Kong
HEDGE FUND AWARDS 2013
BEST EUROPEAN BOUTIQUE PRIME BROKER OF THE YEAR
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- Global Prime Partners
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People today start with $5m to $10m, as opposed to $50m + which the big firms require to meet their minimum revenue requirements, he observed.
Global Prime Partners Ltd is a boutique Prime Broker, providing prime services to hedge funds, family offices and professional traders with less than $100m of AUM. We are one of the first firms in this space outside the US, with a robust infrastructure and a deep level of experience, explained Mr LoPrimo. We also provide a high touch service to an underserved part of the market at a reasonable cost. We were extremely pleased to find out about winning the award, but were unaware of our nomination for it. We continue to focus on growing our business and make ourselves a better service provider for our client base.
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Kevin M. LoPrimo, Managing Director, head of Hedge Funds Services and Equity Finance at Global Prime Partners Ltd, discusses the company and the win.
Aside from the industry recognition associated with winning the AI Award, Mr LoPrimo stated that the firm’s greatest achievement in 2012 was the speed at which it has grown. The team culture at Global Prime Partners was a significant contributing factor to this success. Our firm very much runs as a team, as no single person can do everything, commented Mr LoPrimo. We have teams of people in each aspect of the business who work closely together to achieve a high level of service delivery to our clients and a high level of satisfaction. Mr LoPrimo noted that there were many small startups in 2012, and he expects this continue in 2013. He attributes this trend to the banks cutting back on staff and changing the way they pay people, as well as regulation that has forced proprietary trading out of the big banks.
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This has generated a much larger amount of startup funds than usual, and due to there being more funds out there and less capital going into funds, it means
more clients starting with smaller amounts of AUM, he noted.
Looking ahead, Global Prime Partners will continue to work hard to provide a high level of service and to enhance its technology offering, and aims to become more efficient cost-wise. The firm is also expanding its offering into areas such as Capital Introduction.
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Mr LoPrimo stated that the firm’s model has prospered in the difficult market conditions due to more people starting funds and less capital being invested in funds.
We expect to continue to grow our business and expand. Over the last year our headcount has increased from 16 to 28, while I do not expect it to grow again by that amount this year, we will continue to add people and expertise where needed. In three years I would have hoped we will have expanded our footprint to other regions, concluded Mr LoPrimo.
Company: Global Prime Partners Ltd Name: Kevin M. LoPrimo Web: www.globalprimepartners.com Email: k.loprimo@globalprimepartners.com Address: 4th Floor, 7 Old Park Lane, W1K 1QR, London Telephone: + 44 (0) 207 399 9450
CANADIAN FUND MANAGEMENT FIRM OF THE YEAR
“Our mandate is investing in North American equities outside of the resource sector so that’s quite different from much of Canada which is often highly focused on resources,” explained Mrs Horan. “We only invest in publicly traded securities and don’t invest in IPO’s or private placements - everything we hold is traded on a major exchange, so valuation is highly transparent.
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Our investment process is fundamentally driven so we’re really looking for business models that have a competitive advantage (or disadvantage, in the case of short positions) or are experiencing a significant change for better or worse. The portfolio itself is a high conviction portfolio so we’ll typically have somewhere between 25-30 long and short positions in total.
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Mrs Horan stated that Agilith differentiates itself in a few ways, one being its extremely strong performance in the last five years, with the NAV more than doubling over that period. Agilith also has a very unique fee structure.
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It looks pretty plain vanilla but our incentive based fees are actually quite different from other alternative investments. Specifically, our hurdle of 6% is an annualized hurdle,” she explained. “In other words, our clients get 6% per annum before we collect any performance fee – we’re not aware of any other funds that do that. Mrs Horan stated the company is very pleased to have received the award, adding that it is “a big honour” to have their leading performance in North America recognised. Commenting on the challenging market conditions in recent years, Mrs Horan noted that the volatility in the environment has actually provided a great opportunity for managers who can “look through the near term choppiness and see the long term big picture”.
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What happened in 2008 and 2011 is that we had massive risk aversion to a broad range of investments which caused individual stocks to become mispriced,” she observed. “This played very much to our speciality of fundamental analysis with a focus on value and we were able to find great companies trading at extreme discounts. These kind of broad market movements create opportunities for people who are stock pickers.
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Agilith Capital was founded in August 2007. While the firm works with private clients and managed accounts, it has only one main fund – the Agilith North American Diversified Fund – launched in October 2007.
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Andrea Horan, CFA at Agilith Capital Inc., describes the company, its fund, and its winning strategy.
Agilith’s greatest success in 2012 was the performance that it achieved for clients. Mrs Horan noted that the company did well on both long and short positions, so the stock picking strategy was very successful.
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- Agilith Capital Inc.
Our AUM has grown about 40% over the past year,” she commented. “Some of that is new money coming in and some of it is the performance of the fund and the managed accounts as well. We feel like we’re hitting our stride in terms of business stability and recognition. Agilith’s core strategy has remained unchanged since its foundation – staying focused on identifying value and delivering performance. Mrs Horan stated that the company will continue in this strategy, and focus on what has driven success in the past. “Our goal is to grow steadily and through a combination of organic growth and new money. We may add a few more people over the next few years but we’re really looking for measured, steady growth - we think that is the best way to manage the business,” she concluded.
Company: Agilith Capital Inc. Name: Andrea Horan Web: www.agilith.com Email: ahoran@agilith.com Address: 80 Richmond St. W, Suite 203, Toronto ON, M5H 2A4 Telephone: +1 (416) 637-4635
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HEDGE FUND AWARDS 2013
CHINA LONG/SHORT FUND MANAGER OF THE YEAR
- Orchid China Master Fund
Orchid Asia is an investment group with offices throughout China in Hong Kong, Shenzhen, Shanghai, Beijing and Guangzhou. The firm invests in expanding domestic enterprises in high barrier to entry businesses that have good growth prospects, particularly in the consumer product, Internet, technology, healthcare, and specialty manufacturing sectors. Orchid Asia manages a total of five China private equity funds and one long-biased public equity fund focusing on China stocks, with an aggregate amount of US$1.6 billion of assets under management. The firm’s clients include over 200 leading institutional investors from the U.S., Europe and Asia. They include university endowments, pension & foundations, insurance companies, strategic investors, and high net worth family offices.
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Trevor Chan, Director & Head of Business Development, describes the company and its reaction to the win.
Our objectives are not to win awards but more on maintaining our performance and making money for our investors, explained Mr Chan. We noticed many hedge fund managers who invested in China have been hurt by frauds. The number one reason why investments do poorly in China is poor, and worse, dishonest management. We have been fortunate not to have a single fraud issue in our stock selection (in our long-book). This attributes to our team’s private equity background with deep operating due diligence. Orchid Asia invested through three down cycle recessions in China (1999 Asian Financial Crisis, 2002-03 Financial Downturn and 2008-09 Global Financial Crisis) and has still generated positive returns consistently throughout all three downturns.
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We believe that there are few Chinese investment firms which have been able to achieve these results over the last 18+ years, added Mr Chan.
Looking to the future, Orchid Asia hopes to grow its current long-biased public fund to US$300-400 million for its current strategy, and has no plans to divert from this strategy.
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We will follow the same investment theory, which is to focus on fundamental due diligence and back a concentrated portfolio of industry leaders that have a strong capable and honest management team, high barrier-to-entry franchise value, ideally in industry segments that evolve into oligopolies and monopolies, with predictable growth potential. We also short selective single name stocks and sectors that have weak business/sector fundamentals with poor corporate governance, as well as those suspected to have fraudulent business activities, concluded Mr Chan.
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Mr Chan described winning the award as a nice surprise, which also is a milestone in the recognition of our fund strategy and long term performance. The firm also won an award from HFMweek Asia Performance Awards 2012 in November 2012, for 1st place in the category “Single manager long-term performance (three years) under US$100m”. However, despite these accolades, Orchid Asia will stay disciplined and focus on doing what it does best.
Company: Orchid Asia Group Management, Ltd Name: Trevor Chan, Director & Head of Business Development Email: tchan@orchidasia.com Address: The Center, Suite 6110, 61st Floor, 99 Queen’s Road Central, Hong Kong Telephone: +852-2115-8810
DANISH MANAGED FUTURES MANAGER/CTA OF THE YEAR AND DANISH CURRENCY MANAGER OF THE YEAR
- Capricorn Strategies
Having a long track record matter because it shows a lot of data points, and different market cycles and scenarios, and most importantly how we’ve done in those kinds of situations,” he explained. “Being able to manage risk very well in most different market scenarios is one of our main strengths. “We’re not Winton capital management with 300 people, we have a small team, and when you are a
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Mr Thorup stated that the industry has had to adapt to the market over the last few years. He noted that the environment in 2012 was particularly tough as it exhibited extreme low levels of volatility - the lowest since 2007, and typically the market needs to move to enable trading and create alpha “If we don’t understand what’s going on in the market and there’s no clear direction, then there’s no reason for us to trade,” he continued. “What that means is we have to have a great deal of discipline and actually wait until the market acts the way we want it to.
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That’s the situation we’ve seen over the past 12 months which meant that we haven’t acted so much,” he continued. “I would have to say we’ve been behaving far more cautiously and have actually been sitting on our hands longer than we normally do in terms of no trading.
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According to Mr Thorup, one of the firm’s main distinguishing features is the length of its track record.
small team it’s even more important to have good working relations and team ethics. This is something which has a great deal of importance in the company and we try our utmost to make everybody feel comfortable and act accordingly if there are any internal problems.
However, despite this, 2012 was still a positive year for Capricorn.
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From a performance point of view, 2012 has been satisfying across all three of the main strategies that we run. We’ve had some decent inflows in terms of strategy assets, which of course from a business perspective is important for us.
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Capricorn was founded in 1999 with the focus of generating excess market returns through active currency management. The firm is currently based in Denmark where it has a team of six people running combined assets of around $350 million in advisory and active assets under management. With three distinct currency strategies ranging from short term discretionary trading, to hedging medium term fundamental views, as well as systematic overlay, the Capricorn programs have produced risk adjusted returns for over a decade.
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Mikkel Thorup is the Managing Director and Head of Global Strategies at Capricorn. Here, he describes how the firm distinguishes itself and how it has adapted to the current market environment.
“It was very nice to hear that we had won these awards as it means that the industry continues to recognise all our work, he concluded.
Company: Capricorn Strategies Name: Mikkel Thorup Web: www.capricornfx.com Email: mt@capricornfx.com Address: Frederiksgade 11, DK-1265 Copenhagen K, Denmark Telephone: +45 33 11 05 58
HEDGE FUND AWARDS 2013
DUTCH ABSOLUTE RETURN INVESTMENT BOUTIQUE OF THE YEAR
- Pelargos Capital
Pelargos Capital’s investment philosophy is based on a disciplined value approach and, according to Mr Dingemans, the firm’s most distinguishing factor lies in its capacity to blend deep fundamental, bottom-up knowledge with a systematic quantitative support system. “The combination of the two enables us to better assess downside risk and manage position sizes accordingly,” he observed. While Mr Kretschmer adds: “We are extremely focused on understanding and managing downside risk. At the heart of our thinking lies
Being located in the Netherlands, far from the local newsflow and trading noise, enables us to nurture a contrarian mindset. As true contrarians we embrace the disliked Japanese equity market and with our strategic seeding partner we are able to implement a longer term, fundamentally driven investment philosophy.
In 2012, the Pelargos Japan Alpha Fund achieved a total net return of 11% with nine out of 12 months in positive territory. Despite all the negative sentiment, the firm was convinced that the consensus misunderstood the potential for Japanese equities.
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Mr Dingemans acknowledged that economic conditions are challenging, noting that Japan’s misery is widely publicised. In the last two years the country has had a devastating earthquake, a destructive tsunami and nuclear disaster, pushing its economy into yet another recession, not to mention the territorial dispute with its major trading partner China.
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Japan’s highly dysfunctional political system and 20 year bear market resulted in detest of Japanese equities,” Mr Kretschmer observed. “Inefficiencies are abundant as only a fraction of listed companies are covered by analysts and mispricing is evident due to high retail participation, lack of activism and institutional frictions. The lack of GDP growth and increased systematic risk renders equity prices increasingly reliant on fiscal and monetary intervention.
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Pelargos Capital was launched in the midst of the global crisis in 2008 and we were fortunate to have strategic backing from our long term seeding partner,” explained Mr Dingemans. “This reliable foundation enabled us to build a high-performance operational environment for an institutional audience and to establish a long term track record.
investors tend to ignore macro risk, but we think it is essential to have a good understanding of economicand credit cycles’ impact on individual companies.”
“Therefore, our investment process incorporates a comprehensive macro framework to manage risk from a top-down perspective. Many bottom-up value
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Pelargos Capital was established in 2008 and currently manages 331mn USD in long / short Asian equities. The Pelargos Japan Alpha Fund has one of the best track records among its global peers and is managed by Richard Dingemans and Michael Kretschmer. The fund delivered a positive return in 4 out of 5 years and appreciated 27% since inception, whilst Japanese equities declined 35%.
a contrarian value framework based on asset valuation rather than DCF-type thinking, which can be prone to forecasting errors and biases.”
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Richard Dingemans, CEO and Michael Kretschmer, Fund Manager Japan at Pelargos Capital, describe the company, its investment philosophy, and its fund’s performance.
The Ministry of Finance and Bank of Japan aggressively deployed their policy tools to protect the downside. This policy support in combination with rock-bottom asset valuations has offered and continues to provide an excellent risk-reward payoff, concluded Mr Dingemans.
Company: Pelargos Capital B.V. Name: Richard Dingemans Web: www.pelargoscapital.com Email: richarddingemans@pelargoscapital.com Address: WTC The Hague, E-Tower 7th Floor, Prinses Margrietplantsoen 43, 2595 AM The Hague, The Netherlands Telephone: +31 70 756 8030
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HEDGE FUND AWARDS 2013
INDONESIAN LAW FIRM OF THE YEAR - HEDGE FUNDS
- Lubis Ganie Surowidjojo
LGS was founded in 1985 by Timbul Thomas Lubis, Dr. Ganie and Arief Tarunakarya Surowidjojo. Since then, LGS has grown into the largest corporate transactions and corporate litigation firm in Indonesia. LGS has also obtained Lloyd’s Register Quality Assurance certifications of ISO 9001:2008 for Quality Management systems and ISO 14001:2004 for Environmental Management systems to ensure the quality of all as-
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He explained that LGS works with its clients to understand their problems, determine their needs, and arrive at a practical solution that is both cost effective and viable over the long term. We strive to understand a client’s needs and the legal complexities faced by them in Indonesia’s highly dynamic legal and business landscape, translate this into a solution, and then see the successful outcome. To this end, we approach our clients’ assignments with a pragmatic view that is driven by a deep understanding of their business needs and of the surrounding practicalities of the legal and business landscape that they operate in.
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Dr Ganie has more than 30 years of legal experience, and specialises in commercial transactions and commercial litigation, including alternative dispute resolution and has acted as an expert in a number court and arbitration proceedings. His expertise covers general corporate/company law, banking law, finance, bankruptcy and restructuring, mining, investment, acquisitions, infrastructure projects/project finance, antitrust, and shipping/aviation, with a particular focus on corporate governance and compliance.
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We are extremely pleased at the recognition of our more than 28 years of service, and experience in representing a diverse range of clients from domestic to multinational corporations, public and private companies, to government instrumentalities and state owned enterprises, commented Dr Ganie.
One of LGS’ unique selling points is the combination of the firm’s long-standing commercial law practice and its premier litigation department that has extensive experience in dealing with commercial disputes in the context of arbitration and alternative dispute resolution as well as litigation in the Indonesian courts. “This allows our corporate transaction departments to
benefit from such litigation experience, and from their own compliance work, to ensure that any transactions handled by the firm are carried out with a view to the potential for future disputes,” added Dr Ganie. Over the course of 2013, LGS will continue to build on its strength in corporate law and commercial dispute resolution as it endeavours to work with its clients to provide an exceptional service.
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Dr Ganie graduated from the Faculty of Law of the University of Indonesia and holds a PhD in Law from the University of Hamburg. Dr Ganie is a Chairman of the Association of Indonesian Anti-Trust Lawyers, a member of the Regional Panel of the Singapore International Arbitration Centre (SIAC), and a fellow (FSIarb) of the Singapore Institute of Arbitrators.
pects of the firm’s operations and services.
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Mohamed Idwan (‘Kiki’) Ganie is the Managing Partner of Lubis Ganie Surowidjojo (LGS). Here, he discusses the firm, describes its reaction to winning the award and outlines the team’s aims for 2013.
As always, we will continue to steadily increase the headcount across our corporate law and litigation departments so as to meet the needs of our clients. We also plan to increase the number of partners in the coming years, by having some of our younger team members become partners in the firm so as to ensure the dynamic growth for years to come.
Company: Lubis Ganie Surowidjojo Name: Dr. Mohamed Idwan (‘Kiki’) Ganie Web: www.lgsonline.com Email: ganie@lgslaw.co.id Address: Menara Imperium 30th Floor, Jl. H. R. Rasuna Said Kav. 1 Kuningan, Jakarta 12980, Indonesia Telephone: +62 21 831-5005, 831-5025
HEDGE FUND AWARDS 2013
INVESTMENT MANAGEMENT FIRM OF THE YEAR - SINGAPORE
- Blue Rice Investment Management
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The fund can also take short positions to take advantage of negative events, over-priced securities or to implement negative investment views. We have a strong emphasis on clearly defined risk boundaries in terms of asset classes, geography, leverage and liquidity.
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Ultimately, we look for the underlying long term value of the credit, explained Mr Ong. It is important to us that we research into every credit we invest in and spend time to discuss credit factors and look at how macro events can impact the sectors and eventually, the credits themselves. Discussing BRIM’s style, he stated that the fund generally derives its returns through multiple investment strategies rather than relying on few concentrated bets. The firm has also been successful in avoiding credit defaults or significant price declines due to credit deteriorations or concerns on single names. One of BRIM’s internal targets is to continue to achieve and maintain a default free investment track record.
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“We put a tremendous amount of emphasis on team culture,” he continued. There are so many challenges when starting out a new company and it soon becomes clear to anyone who is starting out new that team work and culture are important and significant corporate values and especially when we are a small company.
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While we are bottom up credit fundamental investors, we will apply our macro views from a sector allocation perspective, explained Mr Ong.
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BRIM’s Asia Credit Fund is an absolute return fund and invests primarily in Asian US$ bonds with investments across the credit ratings spectrum, capital structure, out-of-favour industries and across the Asian industrial corporate and financial institution sectors.
The firm has always emphasised developing its inhouse credit research capability and as such, tends to focus on fundamental drivers of credit, rather than driven by momentum trades.
has worked hard over the year and this award clearly acknowledges their hard work.
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Blue Rice Investment Management (BRIM) is based in Singapore and set up in 2009 to invest in the Asian credit markets. The firm’s senior investment team comprises experienced investment and credit professionals with deep Asia knowledge and direct experience in managing Asian credit portfolios, supported by separate credit research and risk management teams.
BRIM believes that the long term growth drivers for Asia such as its positive demographic factors, stable political and macroeconomic environment, high personal and policy financial reserves and strong work ethics have largely remained intact in the face of recent global challenges.
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Guan Ong, the Principal of Blue Rice Investment Management, discusses the firm, its investment style and its winning team culture.
In addition to thanking your readers who have voted for us, I would certainly attribute the success of this award to our entire team for their consistent hard work and dedication, as without them, we would not have been able to achieve this.
Company: Blue Rice Investment Management Name: Guan Ong Web: www.brimasia.com Email: guan.ong@brimasia.com Address: 1 Grange Road, #06-05 Orchard Building, Singapore 239693 Telephone: +65-6838-0357
‘‘ - Japan Opportunity Fund In reaction to winning the award, Mr Ong stated that he was “surprised but very pleased to be recognised for our efforts,” adding that everyone in the company
JAPANESE MULTI STRATEGY ASSET MANAGER FOR THE YEAR
Gen2 Partners was pleasantly surprised to receive the award, which acknowledges the firm’s performance in difficult market conditions. Mr Hibbs noted that the firm has evolved to thrive in the current environment; however its principles have remained unchanged throughout the crisis.
Gen2 Partners Ltd is an independent asset management firm in Asia, currently with firm-wide AUM of approximately US$500 million, with offices in Hong Kong (HQ), Tokyo and Xiamen comprising over 30 experienced investment professionals. Gen2’s Japan Opportunity Fund is a leveraged fund of Japanese hedge funds actively managed to capitalize on the structural, secular and cyclical changes in Japan. Mr Hibbs stated that the firm distinguishes itself through its long experience on the ground in Japan; its rounded view on the macro; and a strong knowledge of the micro.
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Mark Hibbs, PM at Gen2 Partners, gives Acquisition International a detailed look at the company, its distinguishing features, and his view of the hedge funds industry in 2012.
Describing Gen2’s culture, Mr Hibbs said “it is all about the team and our ability to exchange ideas, analyses and opinions freely”. He added: “The perspective and width this can provide is a core strength.”
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He describes it as a “‘go-to’ investor for emerging talent (in what was a forgotten sector) with a willingness and ability to allocate early”.
His advice to other firm’s nominated for the award is to concentrate on conviction in allocation and always challenge your decisions”, and he modestly attributed Gen2 receiving the award to “survival bias.
Perhaps because Japan has been in its own crisis so long we were already ‘used’ to the condition that spread to the rest of the world, he added.
Looking to the future, Mr Hibbs stated that Gen2 will continue doing what it is doing, focusing on repeatability. In three years’ time the firm will have just launched its third PE fund targeting US$500m+.
Discussing the firm’s greatest successes in 2012, Mr Hibbs stated that “it’s all about the numbers”.
“We will be a recognised leader in Asia and well on our way to reaching US$1bil in AUM,” he concluded.
We held onto our core thesis regarding the market and our allocation to emerging manager’s ability within the space and vindication in producing reasonable returns without taking undue risk,” he explained.
“Success in timing is always sweet and our allocation from almost pure alpha to include a higher beta component in Q3 worked well. Mr Hibbs described the hedge funds industry in 2012 as cautiously positioned, noting that that the ability to raise capital has continued to worsen for many budding managers. However, he believes that this is a good environment for Gen2 as early stage supporters.
Company: Adamas Asset Management Name: Mark Hibbs Web: www.adamasam.com Email: ir@adamasam.com Address: 2101-02 Infinitus Plaza, 199 Des Voeux Road, Central, Hong Kong
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HEDGE FUND AWARDS 2013
RISK MANAGEMENT ADVISORY FIRM OF THE YEAR
- Global Risk Management Advisors, Inc.
GRMA is the only firm that provides complete risk management advisory services to both asset managers and institutional investors. For asset managers, GRMA focuses primarily on alternative asset managers such as hedge funds, funds of funds, private equity funds and other private funds. On the institutional investor side, GRMA works with pensions, endowments, foundations and family offices. Mr Won describes the firm’s approach to risk management as holistic because the firm helps its clients implement all of the essential elements for sound and sustainable risk management including: risk measurement, risk management strategy, risk infrastructure, risk management processes and controls and risk management governance.
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Since the financial crisis began in 2008, risk management matters more than ever,” stated Mr Won. “We’re seeing two major secular trends that are deeply affecting asset managers and institutional investors:
In response to these secular trends, GRMA has designed specific managed services programs to help asset managers and institutional investors meet their risk management challenges in a cost- effective manner. For asset managers, GRMA provides managed services in three primary areas: 1) risk measurement, reporting and monitoring (e.g., VaR, stress testing, scenario analysis, etc.); 2) risk management (e.g., hedging, limits, risk policies and procedures, risk governance, etc.); and 3) risk-based regulatory reporting and transparency (e.g., Form PF, OPERA, etc.). GRMA’s solution for asset managers enables funds to not only better understand and manage their risk but also to better retain and attract investors. For institutional investors, GRMA offers managed services in three principal areas: 1) developing a risk framework that infuses risk management into their in-
vestment policy statement; 2) developing specific risk parameters that can be used for both risk monitoring and risk-based asset allocation; and, 3) developing risk analysis that identifies the risk drivers for their individual investments and aggregates risk across their entire portfolio – both liquid and illiquid investments. Mr Won stated that GRMA felt very privileged to win the award. He believes that GRMA’s success is due to its unique and holistic approach to risk management that offers clients a complete, institutional-quality and cost-effective managed services solution for risk management. We look forward to working with additional asset managers and institutional investors globally, as risk management is now in everyone’s lexicon and has become even more essential.
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Global Risk Management Advisors, Inc. (GRMA) is the leading risk management advisory firm, owned and managed by a team of seasoned risk management professionals with on average 25+ years of front-line practitioner experience at top global financial and asset management institutions and in the government.
increased regulation around risk management and greater demands for risk transparency from investors. Asset managers are finding that they must now report more details about their risk exposures and what they do for risk management to both their regulators and investors. Institutional investors and their Boards have begun to realize that they have significant fiduciary risk from doing little or nothing about risk management and that their pension and investment advisors cannot and will not help them with risk management. Burned badly in 2008, institutional investors now see the importance of knowing and understanding the risk drivers in their entire portfolio and having a process for monitoring and managing these risks.
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Samuel K. Won, Founder and Managing Director of Global Risk Management Advisors, Inc., gives Acquisition International a detailed look at the company and its approach to risk management.
GLOBAL RISK MANAGEMENT ADVISORS
Risk & Investment Management
Company: Global Risk Management Advisors, Inc. Name: Chris Saxman, Chief Operating Officer Web: www.grmainc.com Email: csaxman@grmainc.com Address: 445 Park Avenue, 9th Floor, New York, New York 10022 Telephone: +1 (212) 230-1661
RUSSIAN EMERGING MANAGER SOLUTIONS FIRM OF THE YEAR
- Europe Finance LTD
Mr Ivanyan stated that currently there is no hedge fund industry in Russia and CIS. Therefore, Europe Finance Ltd has no competitors so far. However, as a result of this the company has “to build the industry alone, building relationships with local traders, managers, inves-
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According to Mr Ivanyan, the basis for the firm’s successes is a large range of services to launch and support new investment business and the strong expertise of specialists who speak the “native” language.
Over the next three years, the company aims to create a full-featured service that frees the manager of any nonrelated trading activities problems.
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Commenting on the firm’s reaction to winning the award, Mr Ivanyan said: We were very pleased and even surprised that our work to build the Russian hedge fund industry is welcome in Europe. In 2012, we became the first company in Eastern Europe which has reached the HFWeek Service Provider Award final, and Evgeniya Slouchak, managing partner of Europe Finance was nominated for Speaker of the Year Award by PBWM/ SPEAR’s Russia magazine. But the International Hedge Fund Awards 2013 is our first victory, which is undoubtedly memorised separately.
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Europe Finance Ltd (Russia) provides consulting services to start-ups and experienced fund managers: training, legal advice, marketing and PR, strategy DD, etc. In addition Europe Finance provides Financial Engineering services for the business needs. Moreover the Cayman Island EPFC Asset Management is a member of EPFC Group, which provides adviser services to private hedge funds and funds of funds, as well as providing DD and Portfolio Construction services for (U)HNWI.
by Europe Finance, the Moscow Hedge Fund Managers Club it helps to identify the most popular services, by no surprise there is even interest from the UK and Germany.”
Next year, Europe Finance is planning to open the first Hedge Fund Hotel in Eastern Europe. In this project, the firm is combining the back-office and middle-office services, IT-solutions, the Fund of Funds for Russian Emerging managers, as well as a cost-effective platform for those who are going to start their own business. “The project is in development, we are currently negotiating with our potential partners, but we are sure it will have great success,” explained Mr Ivanyan. “Founded
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George Ivanyan is a Founder & Managing Partner of Europe Finance Ltd, Russian consulting company, which is a an initiator and core member of EPFC Group. Here he describes the company, its work to develop the hedge fund industry in Russia, and its plans for the future.
tors, brokers, exchanges, and government agencies”. Over the past two years, the firm has conducted more than 30 training events for more than 600 professionals as well as for students of economic universities.
It is not a simple outsource of services but the provision of a complete integrated infrastructure being available not only to experienced managers, but to ones with a lack of experience in the industry as well. On the other hand, we wish to create some seed funds to invest in infrastructure users. I believe it will have great potential, not only in Russia, concluded Mr Ivanyan.
Company: Europe Finance Ltd (EPFC Group) Name: George Ivanyan Web: www.europe-finance.com Email: info@europe-finance.com Address: Presnenskaya nab., 10, block C, Regus (5th fl.), Moscow, 123317, Russia Telephone: +7 495 6699680
HEDGE FUND AWARDS 2013
SOUTH AFRICAN HEDGE FUND RESEARCH PROVIDER OF THE YEAR
- Novare Investments cialist providing tailor-made products to both South African and international clients. The company has particular expertise in the research and construction of alternative investment portfolios in Africa and has built an enviable track record in managing pension fund assets.
Novare Holdings in South Africa was founded in October 2000 as an independent investment advisory business focused on providing independent investment consulting services to the South African institutional market. Today, Novare Holdings enjoys a substantial investor base having steadily increased assets under management over the years.
In addition, the team publishes the authoritative annual Novare Investments South African Hedge Fund Survey (www.novare.com/research).
As pioneers in investment management in Africa, we aspire to provide innovative solutions based on fundamental research in the fields of asset management, investment advice, implemented consulting, alternative investments and private equity solutions, explained Ms de Waal. Novare Investments, a 100% owned subsidiary of Novare Holdings, is an independent solution spe-
Looking ahead, she noted that there are exciting developments currently underway as the regulatory landscape for hedge funds in South Africa evolves and is formalised.
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We expect these changes to result in a growing market as hedge funds become better understood and increasingly used to help deliver superior risk-adjusted returns in a total portfolio context, she concluded.
Our understanding of the unique South African market fundamentals, combined with our own in-house macro research and an in-depth understanding of strategies, assists us in allocating to the best performing strategies and new manager ideas.
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In 2006 the management of Novare took a decision to expand beyond the borders of South Africa into the rest of the continent. Since then the firm has built an extensive network and gained invaluable experience and insight into investing in Africa where its vision is to be the emerging market investment advisor of choice.
Our investment philosophy is centred on active investment and risk management in order to deliver consistent and superior long-term risk-adjusted returns for our clients, added Ms de Waal.
which they believe is “testament to our thorough process, rooted in research”.
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Carla de Waal, head of Funds of Hedge Funds, The Alternative Investment Solutions Team, at Novare Investments, South Africa, gives Acquisition International some insight into the company’s background, its philosophy and its experienced team.
“More importantly, we have a stable and vastly experienced team with diversified skills in various actuarial, risk and investment disciplines. The individuals within our team have worked together for a number of years and bring to the investment table a wealth of expertise. Ms de Waal stated that the firm was “delighted and honoured to hear about having won the award,”
Company: Novare® Investments Name: Carla de Waal Email: carla@novare.com Web: www.novare.com Address: Third Floor, The Cliffs, Office Block 1, Niagara Way, Tyger Falls, Carl Cronje Drive, Bellville, South Africa, 7530 Telephone: +27 (0) 21 914 7730
SWISS RISK MANAGEMENT FIRM OF THE YEAR
- Funds and Advisory at Barclays Ajay Jain, Head of Portfolio Engineering and Gil Platteau-Waldmeier, Head of Switzerland Sales, at Funds and Advisory at Barclays examine risk in investment.
bilities (e.g. pensions). This could previously be achieved via yields from ostensibly low-risk assets, but moving up the risk curve means added duration, credit and liquidity risks in exchange for potentially improved returns.
Is there such a thing as a risk free investment?
Addressing this downside risk is the bedrock of any sensible investment strategy and is even more relevant in today’s world. Sustained healthy returns will be difficult to achieve if this isn’t done correctly, as any shortterm gains can be easily wiped out if markets turn.
Recent global events have proven that even large developed governments cannot always offer complete protection for investor money. The European Central Bank, the US Federal Reserve and a host of other central banks have taken action to prop up their economies and support the finances of national governments. Several countries have needed financial bailouts to stop them collapsing, as have a number of large international banks. The pool of assets acceptable to many investors with a low risk tolerance is shrinking, as their perception of what assets are considered safe-haven or low risk has changed. As a result of this, many investors have piled their money into assets considered to be safest, such as Treasuries, gold or German Bunds, which has significantly reduced returns. Yields on two-year German Bunds, for example, turned negative in 2012, meaning investors were effectively paying to invest in them. Despite their risk aversion, institutional investors are moving into higher-yielding bonds, equities or commodities as they search for the returns they need to meet lia-
There are a number of ways that portfolio managers can address risk. One of the most effective is diversification, or broadening the universe of investable assets to minimise impact if one or more assets fall in value. A typical diversification strategy will focus on mainstream assets, but hold positions in specific equities, commodities or currencies in order to mitigate downside. However, as we have seen, correlation breakdowns have become common during the last five years and traditional diversification methods no longer always suffice to preserve capital. We believe that liquid alternative strategies based on global tactical asset allocation (GTAA) could provide a more efficient way of mitigating risk, provided that liquid instruments are being traded and that leverage is not used excessively. Portfolio managers will carefully choose which assets to allocate to on a monthly basis, depending on a range of fundamental and technical indicators. This type of regular rebalancing of portfolios means that there is more opportunity to identify uncorrelated returns with appropriate risk, as well as implementing swift measures to protect downside risk
whenever required. More importantly, a liquid (GTAA) approach uses futures to allow portfolio managers to move into cash temporarily, should the need arise. Furthermore, the ability to use shorts on liquid indices to mitigate risk works well when combined with long positions dictated by well tested methods. Many portfolio managers utilise short positions to take advantage of falling asset prices, however it can also be advantageous to use them for downside risk protection only, as and when necessary. This approach to managing portfolios through tactical asset allocation has allowed Funds and Advisory at Barclays to post solid returns since inception during multiple crises and significant shifts in the global macro environment.
Company: Funds and Advisory at Barclays Web: www.barclays.com/fundsadvisory Name: Gil Platteau-Waldmeier Email: gil.platteau.waldmeier@barclays.com Telephone: + 41 (0) 44 204 5136
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HEDGE FUND AWARDS 2013
UK CAPITAL RAISING ADVISER OF THE YEAR
- Alpha Bet Capital Advisors Ltd network of personal relationships with Fund Managers and Institutional Investors worldwide. In response to the increased business we are doing in emerging markets, we recently established a presence in Dubai, in addition to our main London office. Our institutional investor contacts include family offices, wealth managers, government agencies, private banks, corporate entities, asset managers, insurance companies, fund of funds, sovereign wealth funds and pension funds. Fund Managers also benefit from our in-depth market and product knowledge and thorough understanding of investor requirements.
Rebecca Meijlink, Managing Director of AlphaBet Capital Advisors Ltd, discusses her excitement at winning the award and gives Acquisition International some insight into the company. We are extremely excited to win the 2013 International Hedge Fund Award – UK Capital Raising Adviser of the Year. This award happily coincides with our Firm celebrating its 10th anniversary this year. I founded AlphaBet Capital Advisors in 2003. Over these ten years, our Firm has successfully been advising Fund Managers on their capital raising. We assist hedge fund managers, and additionally private equity and real estate managers, across a variety of strategies and regions. We have developed an extensive
We provide Fund Managers with a unique Capital Introduction Service, concentrating on deliverables within a set time frame. Our pro-active approach is very focused. We strongly believe in filtering at the front end of the marketing process. Our underlying philosophy is that you should properly check the match of a Fund with an investor’s specific criteria before arranging any meeting with them. Too often I hear Fund Managers say that they have been in meetings with investors, only to be told by the investor they don’t have liquidity or for example the fund size is too small for them. These are questions that should be asked before setting up a meeting. This is especially important in the current environment where the bargaining power has shifted to the end investors as they have become much more sophisticated in their investment decision making.
Our Service is customized and the process is extremely well defined. The Fund Manager tells us what is important to them. We then pro-actively approach potential investors and make sure the Fund Manager is only introduced to investors that fit the criteria pre agreed with the Fund Manager. It is a very time saving, flexible and cost effective solution for Fund Managers. Are you a Fund Manager looking to raise capital, please contact me now to arrange a call or a meeting to discuss what is important to you and how we can assist you.
Company: AlphaBet Capital Advisors Ltd Name: Rebecca Meijlink Email: rebecca@alphabetcapital.com Web: www.alphabetcapital.com Address: 43 Berkeley Square, Suite 4b, Mayfair, Westminster, London W1J 5FJ Telephone: (London): +44 (0) 7710 90 85 90 (Dubai): +971 (0) 528625073
UK EMERGING MANAGER SOLUTIONS FIRM OF THE YEAR
- Sturgeon Capital
Sturgeon invests in the markets along what is now termed the New Silk Road, including the Caucasus, Central Asia, and Mongolia. The Firm also invests to a limited extent in Turkey and Russia. In terms of asset classes, Sturgeon invests across the capital structure in both public and private equity and fixed income.
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Mr Cappello stated that the firm was happy and honoured to receive the award.
Despite this continuation, Sturgeon has taken a slightly different tack: being more opportunistic in terms of consolidation across the industry and the region in which it operates. The firm acquired two existing mandates last year and launched a new UCITS fund.
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Sturgeon Capital is an independent asset management firm focused exclusively on central Asia and the surrounding region. The firm was founded in 2006 by Clemente Cappello, who remains the CEO and portfolio manager for the Firm.
acquired a lot of research capabilities of existing teams in the region. We always strive to be at the top of our game in terms of our peer group and hopefully in general across the industry, so hopefully we’ll continue to produce the same results.”
There have been demands for higher regulation and greater liquidity – that’s something we’ve responded to,” said Mr Cappello. “We’ve listened to what the market has been looking for and hopefully we’ve provided what they are asking for with the launch of the UCITS fund last October.
While Mr Cappello acknowledged that 2012 saw some challenging economic conditions, he stated that the company hasn’t really changed its approach and will continue to focus on strong research capabilities in terms of assessing investment opportunities.
A highlight for Sturgeon in 2012 was being appointed by Tau Capital to act as the Investment Manager for the company’s public equity portfolio and the convertible bond investment. Tau Capital plc is a closedended fund listed on the AIM in London, originally established to support the strong growth prospects of Kazakhstan and its neighbouring countries. It was launched in 2007 by Spencer House Capital Management, co-founded by Lord Jacob Rothschild, and local investment group Visor Capital.
“We continue to invest in research, which is evidenced in our corporate development,” he explained. “We’ve
While Sturgeon posted outstanding AUM growth in 2012, beginning the year with 1 fund and US$30 mil-
It’s always good to be recognised by your own peers and it’s rewarding to know that six years of hard work hasn’t gone unnoticed, he commented.
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lion AUM and ending the year with 4 funds and over US$ 120 million AUM, the company will not rest on its laurels.
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We continue to focus on how to expand the range of funds and strategies that we have to meet the investor demand and be ahead of trends that we see developing in terms of new asset flows into emerging and frontier market managers. We’ll also continue to focus very intensely on superior research from strong, accomplished sources in the region. Overall, we will continue to do what we’re doing, build on our achievements of last year, continue to learn from previous challenges, and never get complacent, concluded Mr Cappello.
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Clemente Cappello, founder and CEO of Sturgeon Capital, discusses the company, its highlights from 2012, and its plans for the future.
For further information contact Paul Henderson, Business Development and Marketing for Sturgeon Capital.
Company: Sturgeon Capital Ltd Name: Paul Henderson Web: www.sturgeoncapital.com Email: ph@sturgeoncapital.com Address: 4 Bourlet Close, London W1W 7BJ, United Kingdom Telephone: +44 (0) 207 255 1005
HEDGE FUND AWARDS 2013
UK EMERGING MANAGER OF THE YEAR
- Ovington Capital Management UK Emerging Manager of the Year, Ovington Capital Management is a spin-out of the proprietary trading unit at Mizuho Corporate Bank in London. The team, led by Curtis Adams, runs an array of diversified strategies in liquid G7 Sovereign Fixed Income and FX. With an average of 20 years’ trading experience, the team’s risk taking approach focuses on the construction of a portfolio of highly liquid, non-correlated, strategies designed to perform over a wide range of market conditions. One of the reasons Ovington stands out from the emerging manager peer group is its institutional quality operations and infrastructure. The trading team adheres to a strict risk management discipline reinforced by a state of the art risk management system and is supported by its long standing operational support group. Commenting on this, CIO Curtis Adams noted,
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What separates us is having four highly skilled portfolio managers, with an average of 20 years’ experience, complemented by a dedicated systems development and operations team that has a proven history of success, having worked together for several years.
Mr Adams elaborated, “At Mizuho our key tenets were, diversification, liquidity and transparency and we continue to incorporate those into an investor friendly offering at Ovington.” Ovington launched in February 2011 and has generated positive returns in each year of existence, whilst maintaining a disciplined risk management regime that holds capital preservation as its core and offers downside protection during tumultuous trading environments. The Ovington Fund endeavours to provide consistently positive returns for investors with reduced volatility and low correlation to peers and indices. More information can be found at www.ovingtoncm.com.
Company: Ovington Capital Management LLP Name: Investor Relations Web: www.ovingtoncm.com Email: investors@ovingtoncm.com Address: Ovington Capital Management LLP, 86 Jermyn Street, London SW1Y 6JD Telephone: +44 (0) 207 531 7200
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UK HEDGE FUND MANAGER OF THE YEAR - DUE DILIGENCE
- James Newman, Barclays James Newman, Global Head of Operational Due Diligence, Barclays Wealth & Investment Management, discusses his pleasure at receiving the award and Barclays distinguishing features. After six years of working in the due diligence field it is both gratifying and pleasing to win this award. I believe it is a testament of Barclays commitment to delivering first-class services to our clients and becoming a recognised leader in the due diligence field Barclays is a leading wealth and investment manager, providing the following services to clients around the world: • • • • • •
International and private banking Wealth planning Trust and fiduciary services Investment management Brokerage services Research to private and intermediary.
Additionally, our clients benefit from the breadth of personal, corporate and investment banking expertise from across the Barclays Group, which is one of the largest financial services groups in the world. Within the due-diligence space, my colleagues and I are proud to have created a deeply considered and rigorously applied global operational due diligence process. We have achieved this by establishing pol-
icies and standards for how an external investment management firm should operate and be structured. Our process is the product of extensive research – including more than 200 on-site visits conducted over a number of years – and supported by a significant team of experienced, dedicated due-diligence professionals, based in key offices across the globe. Our process involves benchmarking an investment manager’s operations against our policies and standards, then identifying anything ‘out of the ordinary’. Should some aspect of a firm’s organisation, or fund structure, deviate from our standards, we determine if there are mitigating factors or operational improvements that can be recommended, with a view to reducing the associated risk. This enables us to build a platform of funds that are consistent in meeting our standards and, therefore, allow us to provide the best service to our clients. We believe our commitment to improving what we do has helped us to stand out from the crowd. We are continuously working to identify the most significant operational risks faced by investors in hedge funds and other strategies – namely, private equity, real estate and, traditional long-only. In our view, this provides a unique advantage to our clients. However, we do not operate in a vacuum. We take pride in working with professionals across the industry to improve standards and advance key initiatives.
In response to the industry’s growing international calls for higher standards of corporate governance, I have teamed up with a diversified number of industry professionals, working to create a not-for-profit fund governance body. The aim of this initiative is to promote and raise the standards of corporate governance of private investment funds, with an initial focus on the hedge fund industry. Going forward, we believe there will be no abate in the external pressures on investment managers. Likewise, the requirements and expectations of sophisticated investors are unlikely to ease. As a result, managers need to be better organized and more prepared if they are to pass the institutional investor’s enhanced operational due diligence assessment.
Company: Barclays Wealth & Investment Management Name: James Newman Email: james.a.newman@barclays.com Web: www.barclays.com
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HEDGE FUND AWARDS 2013
UK INDEPENDENT STRATEGY CONSULTANT OF THE YEAR
- Perfecta Partners
Perfecta clients typically experience revenue increases of anywhere from 15% to 300%. For hedge funds, this revenue increase is generally accounted for via product development (or product improvement) or reviewing the distribution strategy. In 2011, Perfecta added three new streams: Social Media, Branding & IT; CRM; and Web technology. In 2012, the firm launched a growing blog spot: www. bd-insider.com
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We distinguish ourselves by our experience, lateral thinking in the context of business, and independence, commented Mr Rollag. Describing his reaction to winning the award, Mr Rollag stated that he was “very pleased and a bit shocked”. He continued: “Consulting in this industry is a very niche business with some very reputable players. Many players in the asset management in-
When asked about how the firm has adapted to the current market conditions, Mr Rollag was reminded of when a reporter asked a bartender close to Wall Street if he is impacted by rising and falling markets. The bartender replied: “When the markets are good, I sell a little champagne. When the markets are bad, I sell lots of beer – it ends up being the same.”
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Perfecta is a management consulting firm that advises Asset Managers, Family Offices and Wealth Managers. The firm employs a ‘think tank’ methodology to find innovative ideas that will build its clients’ business in an efficient and cost effective manner.
dustry don’t have experience with strategy consultants and are unsure of the value we bring. Also, we are very discreet in this business because of the size and culture of the industry.”
Perfecta opened for business at the worst possible time with a mandate of helping brilliant business become even better,” explained Mr Rollag. “Luckily, we made it with very little struggle. Regardless of business conditions, business will always need to get done. Discussing the industry’s performance in 2012, Mr Rollag observed that “people tend to forget that the asset management business is difficult now, it was really difficult pre-2008 and IT WILL ALWAYS BE DIFFICULT”. However, he noted that assets in hedge funds are reaching all-time highs and the number of new fund launches was quite impressive in 2012. “If you compare Hedge Funds with other industries (how they market and connect with the client), you will find that we are typically 10 years behind,” he explained. “I believe that there are at least 10,000
hedge funds and around 40,000 hedge fund investors worldwide – so it is naïve to still assume that this is an emerging, secretive industry.
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The ethos of the industry needs to catch up with the reality: this is a competitive space where you can’t just be good – you have to be brilliant. To be brilliant, hedge funds need not only a great product, but also sound business practices, which will ultimately increase AuM. There is no point managing a fund if you can’t make the business side work, he concluded.
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Ole Rollag, Managing Principal at Perfecta Partners, discusses the company, its performance in 2012, and his impressions of the industry.
PERFECTAPARTNERS Company: Perfecta Partners Name: Ole Rollag Web: www.perfectapartners.com Email: ole.rollag@perfectapartners.com Address: 66, New Bond Street, London, W1S 1RW Telephone: 0203 405 3399
UK MULTI COMMODITY ASSET MANAGER OF THE YEAR
- Telurian Capital Management LLP
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We are very pleased to receive this award which recognises the successful efforts from the Tellurian team towards delivering since inception consistent returns to investors in both up- and down market conditions, commented Mr Bonnefous.
He describes the Tellurian investment approach as “a mixture of an expert, bottom-up, fundamental analysis of the commodity markets, together with a macro, topdown understanding of the global markets and their impact on commodity asset prices”, adding that the firm has benefited from the ability to ‘think outside the box’ and to take some “contrarian investment decisions”.
Tellurian Capital is a London-based boutique asset management firm specialising in the global commodity markets. It manages a number of funds providing exposure to the commodity markets through liquid and transparent exchange traded instruments. Discussing the firm’s distinguishing features, Mr Bonnefous stated that Tellurian has managed to deliver positive returns over the last three years despite volatile market conditions, and the firm has outperformed most of its competition in the commodity hedge fund space over the period.
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In 2012, the Tellurian team was able to successfully navigate around the complex macro environment and outperform with a +11% net return all major hedge fund and commodity indices. Mr Bonnefous noted that the assets under management also increased by 50% over the last 12 months as a result of this positive track record.
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Jean-Marc Bonnefous, Managing Partner at Tellurian Capital Management LLP, gives Acquisition International a detailed look at the firm and its winning strategy.
One of the traits that defines the Tellurian culture the most is the persistence and focus in our approach,” he commented. “We are constantly working on finetuning our investment methodology with a view to adjusting to the ever-changing market environment. In Mr Bonnefous’ view, the main challenge for the hedge fund industry is, more than ever, the ability to outperform more traditional forms of investment vehicles.
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The risk for hedge funds is to become asset gatherers as opposed to performance-seekers, and as a result, lose some of their original function in the broader asset management space, he observed. Tellurian will continue its successful strategy in 2013, and Mr Bonnefous advises other firms to “think outside the box and focus less on asset retention than on ruthlessly seeking profitable investment opportunities”. Looking ahead, Mr Bonnefous concluded: “Within the next three years Tellurian should reach its optimal AUM capacity while keeping its performance track record intact.”
TELLURIAN Tellurian Capital Management LLP
Company: Tellurian Capital Management LLP Name: Jean-Marc Bonnefous Web: www.telluriancapital.com Email: jean-marc@telluriancapital.com Address: 22 Arlington Street, London SW1A 5RD Telephone: +44 (0) 207 042 0900
HEDGE FUND AWARDS 2013
US ALTERNATIVE INVESTMENT TAX FIRM OF THE YEAR
- Fund Tax Services, LLC William McEnroe is the Founder and Managing Director of Fund Tax Services, LLC (“FTS”). Here, he describes the company, its culture, and his impressions of the hedge funds industry.
advisor to the funds and investors, FTS is well positioned to provide opportunities that are in the best interest of both parties to create a win-win situation for our clients.”
Discussing the team culture within FTS, Mr. McEnroe stated that the “most important aspect” of what he accomplished was to “create a platform that the best technical talent in the Big Four was excited to join”.
FTS is the only tax firm exclusively dedicated to the Alternative Investment Industry. The firm’s professional team is comprised of former Big Four CPAs, JDs, CFAs and MBAs with extensive knowledge of Hedge Funds, Private Equity Funds, and Real Estate Funds.
Mr. McEnroe stated that FTS was “thrilled to receive the award from such an esteemed organisation”, but more so to have been voted by its peers as the “US Alternative Investment Tax Firm of the Year”.
“The FTS team is the core to attracting elite funds in the industry. It is essential to FTS culture,” he observed.
“We develop an integrated, non-conflicted, and inclusive approach to addressing our client issues and assist with tax planning and decision making to achieve tax efficient goals,” explained Mr. McEnroe. “In addition, FTS has a Fund Consulting Group that offers capital partnering introductions within the Alternative Investment Community. As a trusted
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FTS’ tax professionals specialise in providing comprehensive tax planning, tax compliance, and tax structuring for Hedge Funds, Private Equity Funds, and Real Estate Funds in the Alternative Investment Industry. The firm concentrates on the complete fund structure including the investment partnership, the general partners (onshore and cross-border), the portfolio companies, and the limited partners.
Consequentially, FTS will turn down the majority of referrals that we receive annually. We would rather service a limited number of high quality funds with superior service. We don’t want all the funds, just all the good ones. Mr. McEnroe noted that, FTS’ greatest achievement in 2012 was helping to bring “Best Practices” to an industry that still needs to improve its image. “We get out of bed every day ready to do battle with an industry that is rife with conflicts. This industry will look much different in five to ten years than it does today because of firms like FTS.”
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By providing only non-audit services, the FTS team is able to proactively focus on a broad range of services on a non-conflicted basis to help our clients achieve their goals, observed Mr. McEnroe.
Discussing the current global economic environment, Mr. McEnroe noted that better economic models can be seen more clearly as weak business models falter in economic downturns. He explained that FTS will only take on a client if the firm feels that the potential client is built to be in business for the long run – ten years or more.
Mr. McEnroe concluded with the firm’s aim for the future:
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FTS will add more non-audit services to our core Tax Service Group where we see opportunity due to audit relationship conflicts.
Company: Fund Tax Services, LLC Name: William McEnroe Web: www.fundtaxservices.com Email: wmcenroe@fundtaxservices.com Address: 1114 Avenue of the Americas, 26th fl, New York, NY 10036 Telephone: +1 646 481 0014
US COMMODITY POOL OPERATOR OF THE YEAR
- Telluride Asset Management, LLC
Discussing Telluride’s reaction to winning the award, Mr Hajas said that the firm was happy to receive the recognition from those that voted for it. He noted that the firm has always believed that its long term value to its investors emanates from its investment process. Since inception, the firm has been committed to creating repeatable and robust procedures and processes in all areas.
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There were some notable winners that were an outcrop of our macro thinking. We think we did well by truly assessing cause and effect. Overall, our strategies identified mispricings that we were able to take advantage of, in an array of markets and were fortunate not to have any big drawdowns. “Strategies that have worked in recent years did not work in 2012 (or 2011). The hedge fund industry has been in a struggle to A) explain the new economic environment we are living in and coming up with investment strategies that work in different environments OR B) hoping the old times will come back soon (hence the repeated calls for normalcy returning to the economy and the markets). We are definitely in camp A.
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Telluride Asset Management, LLC (“Telluride”) is a private investment management firm headquartered in Wayzata, Minnesota. Peter Hajas, along with others on the management team, founded Telluride in 2002 and seeded both the management company and the Fund with the principal’s own capital which continues to be invested in the Fund.
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Peter Hajas is the CEO/CIO and co-founder Telluride Asset Management, LLC. Here, he outlines the firm’s strategy and distinguishing features, and gives Acquisition International his take on 2012.
Mr Hajas acknowledged that 2012 was a difficult environment, adding that in many ways it was a continuation of 2010-11. However, the firm feels fortunate in that “a lot of small things worked”.
Mr Hajas explained that Telluride’s investment process is comprised of trading strategies rather than individu-
al trades (or traders). The firm has organically evolved into teams along the lines of its product areas – systematic global macro, Relative Value and equities.
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Today’s successful trades are seldom tomorrow’s winners. Our success lies not in finding winning trades but identifying trades through our well thought out strategies/processes that look for mispricings in a range of markets at all times. As such, our success has everything to do with our team approach.
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This includes ‘creating or developing’ trading strategies, portfolio construction, risk allocation, trade execution and risk control. We have continued to make evolutionary changes to our process that have helped us navigate the tough investing environment of the last five years. Taken together, these have resulted in, we think, a more robust process of identifying opportunities, assessing risk and creating portfolios for our clients.
“We anticipate continued asset growth and our strategies and infrastructure scale very well in that environment. We will strive to continue to improve old strategies and develop new strategies as we have in the past. We will grow our personnel and recruit as the business necessitates with our historic focus on extremely high quality individuals, he concluded.
Company: Telluride Asset Management, LLC Name: Peter Hajas Web: www.tridecap.com Email: information@tridecap.com Address: 1000 Parkers Lake Road, Wayzata, MN 55391
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HEDGE FUND AWARDS 2013
US LAW FIRM OF THE YEAR
- Katten Muchin Rosenman LLP
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We are delighted to be recognized as the top law firm for hedge funds in the country, says Bregstein. I think we’ve put together an impressive team of lawyers
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Henry Bregstein is global chairman of Katten Muchin Rosenman LLP’s Financial Services Practice and co-managing partner of the firm’s New York office. Here he discusses the award, and what sets Katten apart in this field.
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Boasting one of the largest groups of attorneys focused on the alternative investment space, Katten represents a broad cross-section of market participants, from institutional players to start-ups. We have more than 80 attorneys actively engaged in advising clients with respect to the legal and regulatory issues of alternative investment vehicles, investment, trading and management, says Bregstein. Clients value Katten’s strong regulatory capabilities and attorneys’ expertise in domestic and offshore securities and commodities-focused hedge funds. The firm’s financial services attorneys are known for their focus on sophisticated, cutting-edge matters and for
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their dedication to seeking creative solutions to complex problems. Katten is one of the few firms with the expertise necessary to advise financial market participants on how to adapt to the drastic changes to the regulatory framework in the US and the UK. The financial services team helps clients to achieve their business goals and minimize risk in the face of increasing regulation. We fully appreciate the need to provide counsel quickly and efficiently in light of the time-sensitive and market-driven nature of the issues our clients face, and assist in finding solutions that are both commercially practical and compliant with applicable law and regulations.
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Katten’s Financial Services Practice has developed its capabilities and solidified its reputation throughout the industry by effectively representing a substantial majority of the world’s elite financial institutions. The firm offers one of the most complete financial services practices, with a particular depth of experience in securities, futures and investment management. We count among our attorneys former senior regulators, as well as in-house counsel at financial services firms, who bring their experience to bear in finding solutions from our clients most challenging issues.
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who are dedicated to providing high-quality, business-oriented service, and it is gratifying to know that our clients agree.
Company: Katten Muchin Rosenman LLP Name: Henry Bregstein Email: henry.bregstein@kattenlaw.com Web: www.kattenlaw.com Address: 575 Madison Avenue, New York, NY 10022-2585 Telephone: +1 212 940 6615
US MULTI-STRATEGY HEDGE FUND OF THE YEAR
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We take a very bottom-up approach to investing and we look for all types of bonds, equities and trades that we feel provide compelling risk rewards,” explained Mr Ades. “We look for assets that are usually a little bit off the beaten path. We also like to be involved in
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good work environment. I think we do exactly that, and the culture is a critical element in the success of the firm.
For Mr Ades, Kawa’s greatest achievement in 2012 was being able to have significant returns while reducing exposure throughout the year. The fund started the year over 100% invested and ended the year almost 40% in cash.
Looking ahead in 2013, Mr Ades stated that Kawa will continue to look for good risk/rewards when the firm trades. He described the firm’s approach as a “constant quest for the trades that have little risk and a lot of return”.
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Consistently throughout the year we’ve been reducing our position sizes and reducing exposure as assets became more and more expensive. Instead of piling on the trade, we’ve been taking risk off the table and we were still able to generate pretty hefty returns.
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Kawa Capital Management is an independent asset management firm founded in July 2007, based in Miami Beach, Florida. The firm’s product, Kawa Fund, is a multi-strategy hedge fund that works across different asset classes and has over $200 million in AUM. The fund is focused on trying to find value regardless of asset classes.
niche areas, especially in the credit markets – the more esoteric credits and asset classes that have great asset protection but are not frequently traded.
“I think it’s a big achievement to be able to generate returns without taking a significant amount of risk and without taking any leverage. It’s not only about the returns you do, it’s about the risk you take, and I felt that 2012 was an excellent example of that.
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Acquisition International speaks to Daniel Ades, Kawa Capital Management’s Principal and Portfolio Manager, to learn more about the firm, its investment approach, and its achievements in 2012.
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- Kawa Capital
It’s getting harder and harder, but we are more motivated than ever to continue finding these opportunities. We’re focused on building a multi-year long term track record, which sometimes means doing nothing when there’s nothing to do. We’re not so much focused on winning the award this year but having the best performance over the multitude of years, he concluded.
Describing the team culture within Kawa, Mr Ades stated that the firm has a very laid back attitude in its office, adding that the team values quality of life.
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I think the culture here is very different than your traditional hedge fund culture – it’s almost like a family for us. Everybody has been here for a while, we love what we do and every morning we’re excited to come to work. One of the biggest things is to have a team that is consistent, to offer a good quality of life and a
Company: Kawa Capital Management Name: Daniel Ades Web: www.kawa.com Email: daniel@kawa.com Address: 846 Lincoln Road 4th floor, Miami Beach, 33139, Florida, US Telephone: +1 (305) 722-7350
HEDGE FUND AWARDS 2013
US MULTI-STRATEGY FUND OF THE YEAR
- Phalanx Capital Management, LLC “Adapting and recognising how markets are changing is essential for survival. We need to use more foresight, greater methods of forecasting volatility and analysing credit, and much deeper fundamental research to understand what type of company we’re buying and how we can maximise the returns.” One of Phalanx’s greatest successes last year was the early recognition that credit would be very strong. Mr McGuire noted that there has been consistent central bank support in the last few years, particularly in the US and Japan.
Phalanx Capital Management, LLC is an asset management company that employs an absolute-return, moderate volatility multi-strategy approach within the Japanese, Asian, and Australian markets.
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Receiving the award from AI has been fantastic,” stated Mr McGuire. “It shows that people are recognising the true value of what we’re offering both as a fund management company and a company providing returns to investors.
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Christopher S. McGuire, Managing Member and Chief Investment Officer at Phalanx discusses the firm’s win and its performance in 2012.
Looking ahead, Phalanx has its eyes on the macroeconomic impact of the situation in Europe and its effect on the rest of the world. The firm is also looking at the growth aspects within the Chinese market, and more recently what Shinzo Abe, the new Prime Minister of Japan, will do for the country.
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For us it’s looking at the types of positions that we’re invested in, examining where we think volatility will be, and examining special situation credit situations,” explained Mr McGuire. “We finished the year very strong, with very little available cash to invest and are trading at the deepest discount that I have seen in three years. We are well positioned for a successful 2013, he concluded.
We were able to ride that wave and understand what the governmental intervention within the capital markets was going to do in our markets. That produced very good returns for us while holding credit, and also trading volatility arbitrage, and providing a very good blend of scalable returns. A more recent achievement was identifying that the Yen was making a move to be weaker and recognising the influence that would have on the Japanese equity market. “Although we’re not a directional fund, we have positioned ourselves very well through options and convertibles in order to benefit on a rallying market, and that’s been extremely rewarding for us.”
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2012 saw challenging economic conditions, and Mr McGuire stated that it is essential for all money managers to adapt to the changing market environment.
Company: Phalanx Capital Management, LLC Name: Christopher S. McGuire Web: www.phalanxcm.com Email: chris@phalanxcm.com Address: 300 S. Riverside Plaza, Suite 1650-A, Chicago, IL 60606 Telephone: +1 312-930-2266
US OVERALL ACCOUNTANCY FIRM OF THE YEAR
- Anchin, Block & Anchin LLP
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best served by a relationship partner knowing the account and, understanding their issues. We train our staff to think like business people so we can understand our client’s business and industry and better assist with their goals and objectives.
Anchin, Block & Anchin LLP (Anchin) was founded in 1923 and is the largest single office accounting firm in the United States. The firm’s greatest focus is on providing the highest level of service and benefits to privately and closely held businesses. Anchin provides a full range of services, including accounting and audit services; tax planning and strategy; merger and acquisitions advisement and financial restructuring; tax incentives and credits; succession planning and management advisory services; litigation support and forensic accounting; and other consulting services.
According to Mr Rosenthal, Anchin’s greatest success in 2012 was continued growth. He noted that even in an environment where funds are closing, merging and going out of business, Anchin is still seeing a steady stream of new funds.
The firm has 53 partners and approximately 350 team members, with 10 partners and more than 50 dedicated staff members in the financial services group serving more than 350 funds, advisers and broker/dealers. Anchin’s Financial Services Group serves funds throughout their life cycle, from start ups to funds over several billion dollars. Mr Rosenthal stated that the crux of the practice is funds between $100 million and $300 million.
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We have high level partner involvement,” he explained. “Our partners to staff ratio is one of the lowest in the industry. We truly believe that clients are
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Even in this economic environment we’ve seen new funds starting up and a lot of potential new starts along the way,” he observed. “It’s been very promising for the continued growth of our firm. “Last year was a tough year for funds and I think 2013 is going to be a particularly important year for funds. We’re very fortunate that a lot of institutional investors still look for uncorrelated returns. The rate of return from other investments has not been significant, so it’s a good opportunity for hedge funds to set themselves apart. “The downside is with increased regulations in the U.S. and even in Europe; the cost associated with running a fund continues to increase. We hope to see a benefit from all of these regulations to justify their cost, but right now we are in its infancy stage. The SEC is just getting through their first cycle of examinations of the advisors recently registered un-
der Dodd-Frank and we will continue to monitor the outcomes to gauge the value of the new registration process. Looking to the future, Mr Rosenthal believes that the alternative space isn’t going away, and he anticipates an increase in the launching new funds.
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Jeffrey I. Rosenthal, CPA and Partner- in- Charge of Financial Services at Anchin, Block & Anchin LLP, gives Acquisition International a detailed look at the firm, its achievements in 2012, and his thoughts on the future of the industry.
We have left 2008 behind us, we’re digesting the regulations and I think once a lot of that stabilises it will be easier for funds to start up again and raise capital. Raising start-up capital has been one of the areas that’s been inhibiting the industry from growing, but we believe that’s going to subside and we will see money flowing back to funds again, he concluded.
Company: Anchin, Block & Anchin LLP Name: Jeffrey I. Rosenthal, CPA Web: www.anchin.com Email: jeffrey.rosenthal@anchin.com Address: 1375 Broadway, New York, New York 10018 Telephone: +1 212 840 3456
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HEDGE FUND AWARDS 2013
US RISK MANAGEMENT OUTSOURCING FIRM OF THE YEAR
- Risk-AI, LLC
“We use our own models that are now part of Transparency Analytics software,” explained Mr Matiychenko. “We focus on tools and models that we find
Looking to the future, Risk-AI will continue to improve its products through launches of new applications and updates to existing ones.
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Risk-AI is a small company and tends to work with smaller investors and hedge funds that cannot afford to build internal risk departments. The firm is able to provide its clients with more personal services tailored specifically to each fund.
Mr Matiychenko stated that winning the award was really unexpected, but definitely appreciated”. He added: “We feel honoured to be chosen for this sign of achievement and industry recognition, as well as grateful to everyone who voted for us. Discussing how the firm has had to adapt to the difficult economic conditions, Mr Matiychenko noted that Risk-AI focuses on smaller firms. He stated that because of this, the company has to “understand our client’s budget constraints and adjust our service and fee structure to ensure that every client gets the best service that they can get despite of the tough economic environment”. Our culture is embedded in the firm,” observed Mr Matiychenko “We are a small entrepreneurial firm as are many of our clients. Understanding our clients’ needs, goals and constraints helps us to provide them with the best service that we can. In 2012 Risk-AI expanded its client base and released both the online version of its software as well as the first ever application for hedge fund research and risk analysis designed specifically for iPad. It is now the only company with such an app in the Apple App Store.
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Risk-AI provides Risk Management outsourcing / advisory services to hedge funds and hedge fund investors such as Fund of Funds and Family Offices. The firm also provides cloud and mobile based risk management software under the trademark of Transparency Analytics.
Commenting on trends in the hedge fund industry, Mr Matiychenko has observed “continuing interest in improving risk management practices” and “the launch of new funds”. He stated that “the environment remains difficult for small new funds”.
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Aleksey Matiychenko, CEO of Risk-AI, LLC, discusses the firm, its performance in 2012, and its honour at being selected for the award.
most practical based on our professional experience. Since our launch in 2008 we have analysed close to 200 hedge funds using our software and have been able to adjust our selection of tools based on that experience.”
This will help us to provide better services to our advisory clients and to grow the business. We hope to have significant growth in the next three years and hope to recruit by the end of 2013, concluded Mr Matiychenko.
Company: Risk-AI, LLC Name: Aleksey Matiychenko Web: www.risk-ai.com Email: aleksey@risk-ai.com Address: 14 Wall Street, 20th Floor New York NY 10005, USA Telephone: +1 212 618 1660
US WEATHER RISK MANAGEMENT FIRM OF THE YEAR
Nephila Capital Limited was founded in 1997 in London as part of Willis Limited, at the time the world’s third largest reinsurance broker. As part of its growth strategy, the company relocated to Bermuda in 1999 in order to establish a local presence and to deepen existing relationships in the world’s largest catastrophe reinsurance centre. The company currently manages multiple investment vehicles exclusively for sophisticated institutional investors. In addition to insurance linked instruments, which are predominantly focused on natural catastrophe risk, the company has been trading weather risk since 2000 and launched a dedicated weather vehicle in 2005. Nephila Advisors LLC was established in 2010, predominantly to assist in investor relations, develop strategic trading relationships and business development in the United States. According to Mr Schauble, one of the key attractions to the strategies in which Nephila invests is that the occurrence of catastrophe and weather events is not linked in any way to overall economic conditions. “It offers a truly non-correlating investment opportunity and therefore the current investment environ-
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ment is not driving or impacting our performance, which is one of the things that institutional investors value about the overall asset class. 2012 has actually been a year which has allowed us to continue to demonstrate that non-correlation.” Mr Schauble stated that team culture is one of the most important things that Nephila emphasises throughout the hiring process. He noted that the company has grown in terms of people, but has grown relatively slowly for a platform that manages several billion dollars.
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We have fewer than 50 employees so we think that selecting the right people is hugely important. The culture of the firm is one of the more important aspects of our success in terms of logical thinking and focusing on being stewards of our investment capital and constructing the portfolio that they are seeking.
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Barney Schauble, founder of Nephila Advisors, LLC, shares his insight into the company, its strategy, and the catastrophe and weather risk asset class.
“Our success, whether that’s measured in awards like this one or others that we have won for excellence in this space, is a direct result of the culture that we try to propagate in the firm. In 2013, Nephila plans to focus on making sure that it is delivering what its clients are asking for: high quality portfolios that generate a positive return and aren’t correlated with anything else they invest in.
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The awards are nice, the growth is nice, but the most important thing is making sure that we keep our existing institutional investors happy – it’s been a successful recipe so far. “This is an asset class that is still relatively new – the whole concept of catastrophe and weather risk investment. Having been in it as a firm for a long time we’re just pleased to see that is getting broader recognition and that awards like this even exist, which they didn’t for most of the time we’ve been in business. We appreciate the award and we hope that this is a space that’s going to continue to earn a place in institutional investment portfolios, concluded Mr Schauble.
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- Nephila Advisors, LLC
Company: Nephila Advisors LLC Name: Barney Schauble Web: www.nephila.com Email: bschauble@nephilaadvisors.com Address: 2257 Larkspur Landing Circle, Suite F, Larkspur, CA 94939, USA Telephone: +1 415 799 4101