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Absolute Returns Tmesis Group is a Taiwanese Hedge Fund Manager dedicated to offering absolute returns for investors. We invited Jason Huang and Ralph Cheng to provide us with an absorbing overview of the company and the fund it manages
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Welcome to the 2017 Hedge Fund Awards Now in its fifth year, the 2017 Hedge Fund Awards celebrate the very best that this crucial asset class has to offer. A traditionally fast paced industry, the hedge fund market has seen many challenges this year as financial markets around the world face political and social struggles. Despite this, many firms have excelled in the last twelve months, working diligently to provide strong returns and quality investor support. Innovation, dedication and sheer hard work are all valued in the 2017 Hedge Fund Awards, as we seek the very best that the industry has to offer. We are looking for the firms, and the individuals behind them, who have strived through thick and thin to achieve excellence.
Contents 6. Tmesis Group has won Most Innovative Hedge Fund Manager - East Asia & Best Hedge Fund 2017 (AUM Under 5 Million): Tmesis Capital Management Fund 10. Adar Capital Partners Ltd has won Best Latin America Emerging Markets Fund (3 Years): Adar Macro Fund Ltd. 12. Cohanzick Management has won Best Speciality Credit-Focused Investment Adviser - North America 14. Runestone Capital has won Best Quantitative Long/Short Absolute Return Fund: Runestone Capital Fund 16. Tom Capital AG has won Best New Multi-Strategy Fund: Tom Capital Growth Fund 18. Apple Tree Capital has won Best Independent Asset Management Advisor - Cayman Islands & Best Global Emerging Markets Fund (3 Years): Violet Emerging Markets Fund 20. BAF Capital AG has won Best Independent Asset Manager 2017 - Latin America & Award for Excellence in Corporate Finance Advisory - Latin America 22. Barington Capital Group, L.P. has won Best Long-Term Activist Investor – USA & Best US Equities Value-Orientated Hedge Fund (5 Years) 23. Brio Capital Management has won Best USA Focused Event Driven Small Cap Fund (Since Inception): Brio Capital LP 24. Carlisle Management Company has won Best Global Investment Management Firm & Best Long Term Growth Fund (1 Year): Carlisle Luxembourg Life 25. Churchill & Associates has won Best Asset Management Firm 2017 - Georgia 26. CoreCommodity Management has won Best for Pension Investment Management Services 2017 - Connecticut 28. EastBay Capital has won New Best Global Long/Short Equity Fund Manager - New York 29. Forefront Capital has won Best Integrated Investment Management Platform - New York & Best Fixed Income Credit Fund (1 Year): Forefront Income Trust 30. Fort Sheridan Advisors has won Best Managed Accounts Investment Boutique - USA 31. GAIA Capital Management Ltd has won Best New Systematic FX Program: GAIA Capital Management Ltd (GAIA FX+) 32. Geluk Global Gold Fund has won Best New Global Gold Fund: Geluk Global Gold Fund (Class C) 33. Grand Alliance Asset Management has won Award for Innovation in Market Neutral Hedge Strategies: Sino Vision - Greater China Market Neutral Fund 34. haysmacintyre has won Best Hedge Fund Manager Audit and Accountancy Firm 2017 – UK & Recognised Leaders in Tax Advisory Services – UK 36. Herculis Partners has won Best Swiss Alternative Investment Boutique & Best New Mixed Assets Fund: HERCULIS Partners Gemini Fund - Gemini II 38. Laureola Advisors, Inc. has won Best Life Settlements Fund Manager 2017 & Best US Fixed Income Fund (Since Inception): Laureola Investment Fund 39. Pluscios Catalyst Fund has won Best Distressed Securities / Event Driven FoF (10 Years): Pluscios Catalyst Fund 40. LLB Asset Management has won Best Portfolio Manager - Liechtenstein & Best Alternative UCITS Fund: LLB Alternative Strategy Global Fund 42. Origo Capital has won Best Mid Cap Investment Firm - Nordic Region & Best L/S Equity Hedge Fund (3 Years): Origo Quest 1 44. SRB Capital Management 45. Stats Investment Management has won Best Hedge Fund Boutique - Japan & Best Specialist Japanese Equity Fund (Since Inception): Ginga Service Sector Fund 46. Sterling Financial Group Inc. has won Best Fund Manager 2016 - The Bahamas & Best Mortgage-Backed Fixed Income Fund (5 Years): Sterling Mortgage Income Fund Class A
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47. Acquire Media has won Best Hedge Fund Multimedia News Provider 2017 47. Allard Partners has won Best Asia Absolute Return Investment Manager & Best Long Only Asian Equities Fund (5 Years): Allard Growth Fund 48. Anchin, Block & Anchin has won Best Hedge Fund Advisory Firm 2017 - North America 48. Backbone Asset Management AG has won Best Emerging Fixed Income FoHF: The Boring Fund SP 49. Belle Capital Partners AG has won Best Asia-Focussed Investment Manager - Switzerland & Best Asian Equity Fund (5 Years): Galileo Asia Fund 49. Castle Hall Alternatives has won Best Global Operational Due Diligence Firm 2017 50. Celvum Capital has won Best Fund for Wealth Accumulation Investing & Most Innovative Hedge Fund Investor of the Year 2017 50. Certeza Asset Management (Macro Vega) has won Best Volatility Futures Fund (5 Years): Certeza Asset Management (Macro Vega) 51. CoastRock Capital Management has won Most Innovative Alternative Asset Manager 2017 - New York & Recognised Leaders in Risk Budgeting 2017 - New York 51. CohnReznick has won Best Hedge Fund Accounting Firm - USA 52. Elara Asset Management has won Best Offshore India Dedicated Fund: Elara India Gateway Fund 52. ELYSIUM Investment Advisors has won Best Alternative Asset Manager - India & Best Long Term Absolute Return Fund (Since Inception): Elysium India Fund 53. Finlabo has won Best Italian Hedge Fund Manager & Most Consistent Long/Short Equity Europe Fund: Finlabo Dynamic 53. Florin Court Capital has won Best for Quantitative Macro Asset Management - UK & Most Innovative Systematic Macro Fund (1 Year): Florin Court Capital Fund 54. Hyperion Capital Advisors has won Best Asset Management Boutique - Florida & Recognised Leader in Systematic Strategies - USA 54. INOKS Capital has won Most Innovative Investment Manager - Switzerland 55. JBS Investments has won Best International Equities Fund Manager - Australia 55. Libero Funds has won Best New Absolute Returns Fund: Libero Development Fund 57. Meliora Capital SA has won Best for Short-Term Trading Strategies 2017 57. Mori Capital Management has won Best Emerging Market Asset Manager - Malta & Best Emerging Europe Equity Fund (3 Years): Mori Ottoman Fund A EUR 58. Norron AB has won Best Capital Markets Investment Firm - Nordic Region & Best Long Only Equity Fund (5 Years): Norron Active 58. QUANTUMROCK CAPITAL GmbH has won Best European FinTech-Asset Manager 2016 & Most Innovative Professional Investment Product - Germany 59. Qurium Partners LP has won Best US Long-Biased Equity Fund: Qurium Partners LP 59. RoboCap has won Best Disruptive Technologies Fund (Since Inception): RoboCap UCITS Fund 60. Rubrics Asset Management Ltd has won Best Emerging Markets Fixed Income Fund (1 Year): Rubrics Emerging Markets Fixed Income UCITS Fund (A-USD) & Best Boutique Investment Manager 2017 - UK 60. Sequoia Capital Fund Management LLP has won Best Quantitative Investment Manager 2017 & Best Short-Term Systematic G10 FX Strategy (5 Years): Sequoia Systematic Fund 61. The Castlewood Select Funds, LLC has won Best Multi-Strategy Approach 2017 - North America & Best Macro Options Strategies Fund (1 Year): Castlewood Select Opportunity Fund, LP 61. Third Friday Total Return Fund has won Best US Option Strategies Hedge Fund (Since Inception): Third Friday Total Return Fund 62. Tyrus Capital has won Best Global Event-Driven Hedge Fund (Since Inception): Tyrus Capital Event Fund & AI Best-in-Class Award for Operational Infrastructure 62. Viteos has won Best for Operational Efficiency / Shadow Accounting 2017 - USA & Award for Excellence in Bespoke Hedge Fund Solutions 2017 - USA 63. Waha Capital has won Asset Manager of the Year - Abu Dhabi & Best CEEMEA Fixed Income Securities Fund (3 Years): Waha CEEMEA Fixed Income Fund SP (A) 63. Wermuth Asset Management has won European Thought Leader in Sustainable Asset Management & Best Performing Long-Only European Equities Strategy: WEIS
Most Innovative Hedge Fund Manager - East Asia & Best Hedge Fund 2017 (AUM Under 5 Million): Tmesis Capital Management Fund Company: Tmesis Group Email: email@example.com Web: www.tmesis-capital.com
Tmesis Group Tmesis Group is a Taiwanese Hedge Fund Manager dedicated to offering absolute returns for investors. We invited Jason Huang and Ralph Cheng to provide us with an absorbing overview of the company and the fund it manages.
Tmesis Group offers a quant fund that utilizes trading strategies combining human analysis with computer algorithms to achieve the goal of absolute return for investors who are predominantly highnet-worth individuals and institutional investors. Ralph believes that algorithms offer the best means to generate a stable return from the market. As such, the company is composed of three core departments: market analysis and algo development, operations, and management. Jason discusses these three departments in more detail and outlines how they contribute to the successful operation of the company. “Here at Tmesis, we combine our market analysis team and algo development team into one, as these functions are vital to keeping the fund profitable and delivering on our core beliefs.
“Here at Tmesis, we combine our market analysis team and algo development team into one, as these functions are vital to keeping the fund profitable and delivering on our core beliefs.” “There are a lot of quant funds around the world. However, their strategies are often created by viewing the market through a single lens. Many of these funds’ strategies are detached from real market mechanisms. The methods they use to build trading strategies are solely based on a statistical view of the market, which is an absolutely logical and objective approach that leads to results 99% of the time. “Most of the time, the algo does not need to worry about the news, the hype, or the rumors; they are all included in the statistical model. However, in that small 1% of the time, the price action can only make sense out of market analysis and mechanism. The variance during that 1% is often much more violent than in the 99%.
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“If we look back at the past 20 years, we can see ‘outliers’ occurring more frequently than we think. These include: the 1997 Asian Financial Crisis, the ’01 dot com crisis, the ’03 SARS, the ’08 subprime mortgage, the ’10 flash crash, the ’11 Greece fiscal crisis, the ’14 topping of oil, the ’15 CHF black swan event, and the ’16 Brexit. Thus, we have a strong reason to combine our market analysis team and algo development team into one department and believe this combination leads to better strategies. “Our second department is operations, which is responsible for ensuring the fund functions in a highly professional manner. It handles cooperation and collaboration with counterparties, public relations, general internal affairs, and client relations. Tmesis takes customer service very seriously, and as such we want to provide our investors with the most stress-free investment experience. This can only be done through proper communication. We work to address investor concerns quickly and tailor our services to meet investor needs. The operational department is crucial to Tmesis, and we are committed to supporting our team in their work and ensuring that they are always at the top of their game. “The final department is our management department, which is designed to provide the best working environment for employees and to maintain an innovative atmosphere and chemistry within Tmesis. Fundraising is a continuous job for the management department which will result in a gradually improved research environment for employees. This department also ensures we hire top talent and collaborate with companies across many fields. Additionally, the management department makes sure that Tmesis is always on the right path to achieve our ultimate goal of absolute returns for investors.” These three departments are close knit, as hedge funds do not have much space to tailor services for each client individually. Once an investor invests into the fund, his or her shares will be treated exactly the same as others. However, Tmesis cares about investors and wants to provide a stress-free investment experience. Ralph outlines how the
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firm works to provide an exemplary experience throughout the investment process. “At Tmesis, we are always willing to spend time explaining our approaches, and our communication window is always open for investors who have concerns. Moreover, under certain circumstances, we do offer special arrangements – especially regarding incentives and management fees – with investors.” Originally, our client base was mainly friends and family. However, the firm has recently expanded efforts to reach outside investors. Ralph discusses how investors’ limited exposure to algorithmic trading has been a challenge, but one which Tmesis has been eager to overcome through education and support.
“Ultimately, we never stop pushing Tmesis’ capability in better serving our investors; we will never be satisfied with our fund performance and strategies, and we believe there will always be space for improvement.” “Overall, we believe most investors do not have exposure to algorithmic trading. Although quant trading has been around for quite some time, we have found that it is still mysterious to most investors. The lack of knowledge in investment approaches will keep investors away from quant and lead to them pursuing seemingly more tangible investments. As such, whenever we pitch Tmesis, we emphasize how current technology enables us to deal with data and information and how we implement that into the financial market. As our existing investors become familiar with our approach to the market, our client base continues to grow through referrals as they tell others about our innovative strategy and results.”
The fund has a flexible strategy which enables it to maximize returns and move with the market, as Ralph explains. “Tmesis is not the type of fund that sticks with one strategy throughout its lifespan, especially when that strategy is based on experience. As such, there are a number of advantages that investors may find from investing with Tmesis. They no longer have to worry about a fund’s strategy suddenly stop being profitable due to a change in the investment environment; they do not have to worry about a manager’s experiences or skills being enough; they do not have to worry about unexpected events such as personal problems or incidents of a manager that may affect the performance (physical, mental illness, or accident). “Alongside this, with rapid development and technological breakthroughs in computer science, financial institutions who still analyze, invest, or trade in the old ways will not survive. Overtime, Tmesis will develop more and more statistically proven algo strategies and better optimize existing strategies. This will result in gradually evolving performances that leads to stability and consistency that will never be outdated. Our fund is always prepared for the future not just the past.” Internally, the firm is equally flexible and dedicated to innovation and creating new ideas, as Jason is eager to discuss. “Our slogan, ‘Investment is not a stubborn monster. It is an elegant solution,’ underlines our internal culture. We operate more as a tech company than a financial institution. We eagerly look for positive changes in our investment methods and models. We evolve and upgrade our strategies, just as Apple evolves and upgrades their iPhones. “To keep all staff motivated and innovative, we support and encourage new ideas. By doing so, the team is more coherent as opinions get respected. Providing this environment at Tmesis is what creates breakthroughs. “When it comes to hiring staff, we are equally proactive in order to attract the best talent in the industry to our firm. The labor market has always been competitive for companies that look for quality over quantity. Tmesis has two main approaches to recruiting: an internship program, and a referral system. We like to start building relationships with potential employees early on when they are still students. By providing internship opportunities, it gives us time to evaluate candidates, and it gives candidates a chance to get to know Tmesis as well. We believe this will result in better and longer term relationships. In addition, through our referral system, we receive candidates with skills already approved by current Tmesis team members. Hires through referrals have also been proven to result in better teamwork and chemistry which helps maintain a collaborative and inventive culture.” Currently, within the Asian investment market, mainland Chinese investors are not allowed to invest in offshore funds due to China’s foreign exchange control. However, this restriction may soon be eased due to the QDII2 policy which allows
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Chinese HNW investors to make direct investment in foreign funds. This is a highly-anticipated policy that will completely change not only the Chinese investment landscape, but also reshape the hedge fund industry. However, because of the recent considerable weakness in the RMB, there is still uncertainty about how this would affect the Chinese government’s timetable on QDII2. Tmesis is watching the development closely, and as a flexible business, the firm will always be ready to take advantage of any opportunities which market changes afford.”
With specific regards to Tmesis’ future, Ralph emphasizes that the firm will continue to build upon its current success and continue to strive towards absolute returns for its investors. “Ultimately, we never stop pushing Tmesis’ capability in better serving our investors; we will never be satisfied with our fund performance and strategies, and we believe there will always be space for improvement. To Tmesis, the word ‘innovation’ means to produce significantly better results by utilizing new methods. We are approaching the market with new methods across both software and hardware.
“Thus, we have many great plans for the year ahead. Tmesis will be building a research center which absorbs recruits from fields such as statistics, mathematics, economics, computer engineering, and financial engineering. This company expansion highlights the fact that we are serious managers with a long-term vision, instead of ones that are simply looking to make quick money. We expect this move to enable Tmesis to stay ahead of the competition and deliver exceptional returns for our investors.”
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Best Latin America Emerging Markets Fund (3 Years): Adar Macro Fund Ltd. Company: Adar Capital Partners Ltd Address: One Capital Place, 4th Floor Shedden Road, George Town Grand Cayman KY1-1103 Email: firstname.lastname@example.org Website: adarcapitalpartners.com
Adar Capital Partners Ltd Adar Capital Partners Ltd. (ACP) provides investment advice to institutional investors, family offices and private investment funds. We invited CIO Zev Marynberg to talk us through the firm and the support it provides.
ACP is a Cayman based investment manager with a presence in Latin America, Europe and Israel which has been providing investment advice to institutional investors, family offices and private investment funds since 2011.
American and European markets. The company gives great importance to capital preservation and counts with an extensive network of contacts developed with investment banks and institutions throughout the regions where it invests.”
Central to the firm’s operation is its role as the investment manager of Adar Macro Fund, which seeks to achieve high-interest income and capital appreciation through investment in a combination of different fixed-income and equity securities, with particular attention to European and South American markets. In managing the Fund’s portfolio, the Investment Manager takes into account such factors as the credit quality of issuers; changes in and levels of interest rates; projected economic growth rates; volatility; capital flows; debt levels; liquidity; inflation trends; and anticipated movements in foreign currency and governmental initiatives.
“In addition, the management team of ACP has over 25 years’ experience in investment banking, risk management and compliance. We have experienced many challenges through those years, gaining the expertise a fund needs in order to take advantage of the current volatile investment scenario. As such our team is able to provide full planning with special emphasis on service quality.”
“Our mission at ACP is to provide standards of excellence, trust and stability.” The Fund’s portfolio typically contains fixedincome and equity securities, notes, corporate bonds, commercial paper, euro-time deposits, euro-depository receipts representing certificates of deposit, bank loans and other non-securitized extensions of credit made to sovereign and corporate issuers. Some derivatives are used when the fund manager feels it is justified. Funds are invested 70% in Latin America and 30% in Europe. The principal focus is fixed income for two thirds of the fund’s investments, and then listed equity for the remaining third. Zev, in his opening comments, discusses the firm’s mission and how it works to achieve this through its strong expertise and local knowledge. “Our mission at ACP is to provide standards of excellence, trust and stability. We are focused on securing best performance, achieving this goal by the large experience of our team of professionals and extensive market knowledge, especially in Latin
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Hiring new staff is a key part of the firm’s strategy, as it is through acquiring dedicated personnel that ACP is able to flourish and adapt, as Zev outlines. “Over the years we have come to realize that our structure was made more efficient by hiring qualified staff and dedicating sufficient time to supporting their development, ensuring that new staff understand the tasks, the methods and the goals. When hiring, we care deeply about the values and principles of each member of the staff. We intend to understand their vision and personal objectives, helping them on their personal and professional development, while it also adds value and interest to our company. Expertise and professionalism is what distinguishes our team and we are deeply proud of them and the achievements they have made over the years.” The quality of the firm’s staff is vital to its success, as Zev explains, because risk management is a core component in all of the firm’s investment decision processes. “ACP’s integrated trading, monitoring and riskmanagement system enables extensive analysis to be performed in a timely manner. The company can profile portfolios on a regular basis, providing itself with summary matrices, market movers, and forward-looking cash flow analyses, using EZE Castle technology. The fund’s portfolio is monitored on a live basis for signs of any credit deterioration, drawing on broad sets of market data, including both current levels and historical trends.”
Adar Capital Partners Ltd
“Alongside our diligent staff and risk focused internal processes, we use technology in order to keep track of all our investments and to conduct reporting and risk management. Before investing, we do external review of each investment case; extensive travel to gain a better understanding of prospective investments; and a deep local knowledge of each of the countries where we invest.” “Fundamentally we believe that new technologies and the full access to all the information currently available generate volatility on agents’ decision makers, notwithstanding that we are very careful on the sources that we choose and prefer to elaborate our own analysis before any investment decision is taken in order to safeguard the interests of our investors.”
With offices around the world, ACP has a strong global presence, and is currently in the process of relocating its central office to Geneva, Switzerland. With a wealth of investment expertise, service providers and qualified staff, the country offers the very best environment for the firm to set up as a base. Ultimately the future looks bright for the firm, as it seeks to build upon its current success and draw upon its vast industry knowledge, as Zev concludes. “Moving forward, ACP is keen to draw upon the past two decades’ worth of expertise we have gained to continue to provide the very highest standards of service to our clients. The best approach is always to go with the firm’s principles, as they explore how to invest and where to take risks, and therefore we will continue to follow their knowledge and experience.”
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Best Speciality Credit-Focused Investment Adviser - North America Company: Cohanzick Management, LLC Name: David Sherman, President & Portfolio Manager Alyson Gardner, Director of Communications Email: email@example.com firstname.lastname@example.org Web: www.cohanzick.com Address: 427 Bedford Road Pleasantville, NY 10570 Phone: 914-741-9600
Cohanzick Management Cohanzick Management is an investment advisor and manager working across a wide range of credit focused strategies. We invited Founder and President David Sherman to provide us with a fascinating insight into his firm and the services it offers.
Established in 1996, Cohanzick Management became an SEC registered investment advisor in April 2009, and has since grown to have assets under management in excess of $1.6 billion, including mutual funds, alternative funds and managed accounts. David talks us through the solutions the firm provides within the hedge fund space. “Specifically within the hedge fund space we offer two strategies: a long high yield credit opportunities fund as well as a short-biased credit fund (primarily investment grade). We provide portfolio level transparency and encourage an open dialogue with our investors. In addition, we also offer separate accounts that employ customized combinations of the three mutual funds (RiverPark Short-Term High Yield, RiverPark Strategic Income, and Collins Long/Short Credit Fund) and our two private fund mandates.”
“What truly sets Cohanzick Management apart is its focus on transparency and client support, as it seeks to offer investors the very best returns possible.” Serving clients including high-net worth individuals, family offices, institutional asset managers, pensions and endowment funds, risk is a key issue, as many of these investors require secure investments as they rely on these for income. As such Cohanzick Management takes a proactive approach to risk, as David emphasises. “Risks to the portfolios are actively monitored. Some risks include market liquidity, credit quality and interest rate volatility. Some of these issues are mitigated by the nature of the investment selection, portfolio management and a disciplined approach. Understanding of the business model, legal structure and market dynamics for each subject credit are paramount in our consideration of risk and permanent loss of principal.”
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What truly sets Cohanzick Management apart is its focus on transparency and client support, as it seeks to offer investors the very best returns possible. “Our biggest differentiator is our long-standing commitment to transparency and access. While we send out an extensive Quarterly analysis, we hope and expect to communicate with clients on a frequent basis either via email, on a call or in person. We value our clients’ input and, in many cases, view them as an additional analytical resource when they have relevant business experience in an industry or sector.” “Ultimately, we believe fees need to reflect a level of reasonableness in conjunction with services provided. Benchmark strategies deserve benchmark fees and unique or specialized strategies deserve a premium. However, very few managers and strategies justify the historic fee structure of the hedge fund industry. Further, clients deserve transparency and detailed reports as well as active engagement with investment managers, as fundamentally it is their money we are investing.” In order to offer this quality client service, the firm needs the support of its staff, and as such David, who is very proud of the work his teams undertake, discusses the firm’s inclusive culture and focus on providing staff with the same level of support as clients. “The varied background of our personnel, including sell side, buy side and corporate investing as well as operating managerial experience results in a unique perspective which we are very proud of here at Cohanzick Management. We value the input that comes with these diverse experiences as they enhance our understanding of credits. The firm has 10 employees, six working in investment and four operations professionals. Each of the three most senior members of the investment team have over 25 years of industry experience, including portfolio management responsibilities. The other members of the investment team each have over 15 years of experience. Each member of the operations team has at least 15 years of relevant financial services experience.
“As such our team are able to provide clients with the level of service and professionalism which we believe is crucial to our success, and therefore we aim to reward them by providing them with an internal culture and benefits which are superior to those of other investment firms. Our bucolic location allows our employees to have a better sense of work-life balance by mitigating time consuming commutes. This attracts senior professionals who understand the value of work and family. We believe the compensation program in place is sufficiently competitive to attract and retain high calibre employees. Overall, Cohanzick emphasizes a corporate-team approach in compensation for all employees. Our aim is for employees to care about and focus on the entire business rather than a specific client or fund.” Looking ahead, David is keen to make it clear that the firm is poised to build upon its current success, moving into new investment vehicles whilst retaining the same strong returns and quality client service that it has come to pride itself on. “Currently we are focused on managing products in the credit arena which offer unique risk adjusted returns. Moving forward we will also seek, when appropriate, to utilize liquid vehicles such as mutual funds, ETFs and UCITS to articulate our strategies.”
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Best Quantitative Long/Short Absolute Return Fund: Runestone Capital Fund Company: Runestone Capital Name: Rune Madsen & Rasmus Andersen Email: email@example.com Web: www.runestonecap.com Address: 239 Kensington High Street, London W8 6SN, UK Phone: +44 207 316 3084
Runestone Capital Runestone Capital is a London based investment firm operating the Runestone Capital Fund through proprietary systematic models. We invited Rune Madsen and Rasmus Andersen to talk us through the award winning fund.
Established in 2014, Runestone Capital was created with the aim to identify unique investment opportunities with superior risk-adjusted performance. The team started to work together in 2008 at Morgan Stanley and over the years this collaboration has helped the firm to develop quantitative and qualitative strategies based on volatility. These back-tested and proprietary active management models are designed for institutional and private investors seeking alpha-driven returns. Rune discusses the firm’s award winning investment product, the Runestone Capital Fund and the approach this takes.
The firms overall mission is to identify unique investment opportunities with superior risk-adjusted performance. Rune outlines how its innovative investment approach helps it to achieve this ambitious goal.
“Runestone Capital Fund is an absolute return fund that exclusively trades US equity index volatility. The fund is part of the CBOE Eureka Hedge Relative Value Volatility Index in which we are the best performing fund year to date. The fund takes directional positions on a daily basis, either long or short US Equity Index Volatility. However,
“In addition, our investment approach operates freely without pre-set biases for our investments. The models all operate in real-time and we rebalance our portfolio daily. The systematic discipline combined with occasional discretionary risk reductions, has enabled us to produce positive returns in a wide array of market conditions.”
“At Runestone Capital, we aim to reach our goal by utilizing our quantitative and qualitative strategies based on volatility.” it does not have a pre-set bias to be either long or short. All positions are based on statistical probabilities derived from our models, which have built in risk parameters that are designed to provide risk adjusted returns. Periods of high volatility of volatility have led to overall smaller positions due to higher uncertainty and range of outcomes. These risk adjustment features have lowered overall volatility in the fund. “The fund does not target an explicit realised volatility level, but aim to keep our downside volatility in the low teens while maintaining a positive skew. The strategy is not about risk elimination but risk controls and is designed to generate great risk adjusted performance, which so far is on track since inception.”
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“At Runestone Capital, we aim to reach our goal by utilizing our quantitative and qualitative strategies based on volatility. In order to have an edge a fund needs to be dedicated, which we are as we only invest in US equity index volatility. The asset class is also a non-crowded asset class despite its deep liquidity.
This flexibility is vital, as it allows the firm to develop around the latest changes in the market, as Rune explains. “In order to stay at the forefront of emerging industry developments we implement quantitative driven models and are constantly researching the existing framework, as well as analysing ways to improve our performance. Our focus is on short term strategies that are adaptable to a wide range of scenarios and hence optimally placed to perform well over the cycle. We are convinced that by employing a systematic approach we are removing ego and emotions from the process, which has shown improved risk/return characteristic over time.” Rune concludes by outlining the firm’s future and the exciting developments it has on the horizon. “Moving forward, our main focus is the continuation of the strategy as we grow assets. We are receiving increasing levels of interest, particularly from the US, so we expect to launch a US focused share class in the near future. Currently we focus on managing the fund and do not offer other financial services, but we are open to the possibility of setting up separate managed accounts if the opportunity is significant.”
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Best New Multi-Strategy Fund: Tom Capital Growth Fund Company: Tom Capital AG Address: Othmarstrasse 8, CH-8008 Zurich, Switzerland Phone: +41 44 515 62 88 Email: firstname.lastname@example.org Website: www.tomcapital.ch
Tom Capital AG Tom Capital AG is a privately owned, well-financed and fully independent Swiss financial advisor and authorized asset manager of collective investment schemes. We invited Thomas Stämpfli, founder and CEO of the company, to discuss the fund and its strategy in more detail.
Established in 2011, Tom Capital grew from a family office taking care of the needs of founder Thomas Stämpfli into a research driven fund manager. The firm’s flagship fund, the Tom Capital Growth Fund, was launched in December 2015, and the company is FINMA regulated. Thomas outlines the firm’s investment strategy and how this helps it to achieve its aims. “Tom Capital offers a fully systematic, meanreversion oriented trading strategy in seven different futures markets which operates on strictly rule-based long and short investment decisions. The strategy does not allow for many discretionary overruling, i.e. it eliminates decision-making based on emotions or subjective biases. Numerous studies show that systematic strategies render continuously higher returns with less risk than discretionary and intuitive approaches. Our approach revolves around three key steps: forecasting, trading and risk management.”
“Our approach revolves around three key steps: forecasting, trading and risk management.” “Every investment decision is based on a forecast, the first step in our approach. We gather information for all our seven key markets: the SMI, S&P500, DAX, AUD/USD, GBP/USD, EUR/USD, and the 10y Treasury Notes. This information is then interpreted according to their different priorities be it value (Warren), macro (Soros), sentiment (Behavioral Finance) or technical (Renaissance). The big difference to any investment committee is that we codify this knowledge and apply it every day in a systematic way. The method used is called “scoring”. It has proven itself in many different areas as a robust and elegant way of combining different information sources to one decision. In many ways it is a similar approach as applied by the IBM chess computer “Deep Blue” against Kasparow; Deep Blue learned from the best chess games in the past and could apply that knowledge faster and better
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than its human counterpart. We make our forecasts available to our investors through our daily research reports.” “The forecast is then the key input for the next step, the trading, as it determines on which side and with which risk trading will scale into a position. The scaling is always reversion oriented, meaning the next position build-up will be at a more favourable price. In the rebound in the direction of the forecast trading then tries to eliminate the position at a volatility adjusted target price. This systematic methodology increases the accuracy of the forecast from about 60% to 75% to 80% for the individual trades. So in addition to benefiting from the accuracy of the forecast, it extracts value from the natural volatility of the market.” “The final step is risk management. It aims to reducing the draw-downs to less than 10% for the fund while maintaining the target return at 10% to 20%. Risk management is the core of all our activities. In portfolio construction we diversify across asset classes, markets and trading strategy separating our capital into 14 different and independent sources of income. In trading we backtest our models over 25 years and calibrate them, so the exposure and the draw down never exceeds defined risk limits.” “In forecasting we interpret parameters generically, limit us to maximum of 30 parameters and do not overweigh any of them in order to reduce the single parameter risk. We also exhaustively perform robustness test removing as much as 50% of the parameters.” The fund is registered in Switzerland and regulated by the Swiss supervisory authority. It provides tax reporting to other European countries. The share classes in USD, EUR, CHF are open to investors of all sizes starting with a minimal investment of 150 USD to 3 million USD: The fund’s investors are the managers of the fund themselves providing a nice alignment of interest, High Net Worth Individuals, family offices, institutional investors and fund of funds.
Tom Capital AG
“The increase of AUM from 15 to 65 Mio. in the last 12 months confirms that we are on the right track. We found that investors are specifically attracted by the coherent, disciplined and sensible investment approach we can transparently present to them as well as by the professionalism our team of 12 employees can assure.” Thomas says. “Moving forward we will increase diversification by adding Oil, Bund, Guilts to our trading universe this year, and several more markets next year,” he concludes. “For this purpose we are actively seeking talented forecasters.”
“The true challenge ahead is to tab into the knowledge of our clients and other interested and talented forecasters in order to learn from each other and continuously improve our forecasts. Inspired by Prof. Tetlock’s Super forecasting experiment, we will launch our digital forecasting platform in 2017 making all our forecasts available to our clients and other interested parties. In return we will ask users to provide us with feedback and insights they have. We are convinced that this transparency and engagement will be of further value to the participants as well as to us. We are really excited about this project and invite all the interested readers to join us on the platform. Please feel free to register yourself on our homepage if you would like to receive a personal invitation as soon as it launches.”
Acquisition International - Hedge Fund Awards 2017 17
Apple Tree Capital HF170079
Best Independent Asset Management Advisor - Cayman Islands & Best Global Emerging Markets Fund (3 Years): Violet Emerging Markets Fund Company: AppleTree Capital Email: email@example.com Web: appletree-capital.com
Apple Tree Capital AppleTree Capital is an independent financial advisor specializing in emerging markets and absolute return strategies. Co-Founder Dimitris Apistoulas discusses the firm’s award winning funds and the strategies driving them to success.
Established in 2010, AppleTree is an award winning alternative investment manager launched in May 2010 by Michael Nicoletos and Dimitris Apistoulas. The firm’s mission is to deliver exceptional value to its investors by strictly adhering to its philosophy of transparency, liquidity, and risk management. From 2012 onwards its flagship investment product, the award winning Violet Emerging Markets Fund, has outperformed all market and peer indices. The fund is a long-short Emerging Markets Equities Fund focused on Emerging/Developing Europe. The portfolio consists only of listed, liquid equities, bonds and listed derivatives. Since its launch in May of 2010, Violet has significantly outperformed its benchmark, the MSCI EMEA. Within the course of the past 4 years, Violet has returned a net return in excess for 40% vs a -30% drop of its benchmark during the same period.
“When it comes to our investing strategy, we at AppleTree Capital have a unique approach. We challenge ourselves and our convictions, constantly, to ensure that all angles are covered.” Taking a proactive approach to investing and remaining at the forefront of the latest market developments is crucial to this success, as Dimitris is keen to emphasise. “When it comes to our investing strategy, we at AppleTree Capital have a unique approach. We challenge ourselves and our convictions, constantly, to ensure that all angles are covered. Financial markets are full of “noise”. Therefore, our main effort is to distinguish the real market-moving news that have a real effect in our portfolio vs the usual noise which can only cause intra-day or very short term price fluctuations. “This is achieved by always aiming to remain at the forefront of Emerging Markets developments by
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employing a comprehensive data gathering process that allows us to pool information from a number of different sources: we use a network of established relationships with local professionals, who provide a first-hand experience of the political and financial developments on ground; we frequently attend road shows and make company visits to speak directly to companies management ourselves; we do extensive in-house research to identify valuation miss-pricings; we review exhaustively company releases and quarterly results, as well as use a diversified array of 3rd party research. Finally, all team members engage in robust monitoring of daily news and macro-level trends, utilizing the latest technology, local feeds, and social media (Bloomberg, Twitter, etc.). “This constant flow of information, as well as our team’s dedication to synthesizing and constantly reevaluating new developments, provides us with a thorough understanding of all major developments, challenges, and macro trends in the EMEA region. Every morning, before we begin with our daily routine in the office, the fund Managers begin by debating a very radical and contrarian position in the form of a reduction ad absurdum argument: they assume that the existing portfolio is not optimal. They challenge and debate everything: from our macro/political view, to portfolio net exposure, individual positions and sizing. This debate takes place every morning, and does not settle until the managers are convinced that the strategic investment decisions taken are on the right track. While unconventional, this investment mentality has proven to be an excellent modus operandi to revise our assumptions, identify behavioural biases (both personal, but also across the industry), and affirm the strongest of our convictions. This profound process of daily re-affirmation of our fund’s strategy through productive debate lies at the core of our investment philosophy.” In order to provide the very best returns to clients the firm aims to avoid excessive market volatility by effectively managing risk, as Dimitris outlines. “In terms of risk management, we have all the traditional tools in place (such as exposure limits,
stop losses etc.), however we also try to identify cheap ways to hedge black swan events via options on the global level (potential devaluation in China, crisis in the Middle East etc.). By default, Emerging Market equities are assigned a higher risk rating, however we try to identify risks and address them. Risk is always manageable, uncertainty is not. Hence, when we are faced with uncertainty that hampers the proper calculation of risk/ return in any market, we refrain from investing until the dust settles.â€?
â€œUltimately, we believe that a successful alternative asset manager, irrespective of returns, must safeguard first and foremost its most important assets. Integrity, transparency and trust. We believe that we at AppleTree have exemplified this to our investors; not only have we outperformed our benchmarks, but we have also demonstrated
that we will always be thoroughly transparent in whatever we do, and are fully reliable whenever they need us. Our relationship is about trust, dedication, and perseverance. At such difficult times, with passive funds making important gains, we believe that it is these exact values that will set active managers apart across the industry.â€?
In conclusion, Dimitris believes that what differentiates his firm from the competition is its dedication to providing a combination of strong returns and excellent client service.
Acquisition International - Hedge Fund Awards 2017 19
Best Independent Asset Manager 2017 - Latin America & Award for Excellence in Corporate Finance Advisory - Latin America Company: BAF Capital AG Pantone 7539 C Phone: +41 61 588-0223 Pantone 294 C Email: firstname.lastname@example.org Web: www.bafcapital.net
BAF Capital AG BAF Capital AG is a Swiss based financial services company and Independent Alternative Investment Manager, with a specific focus in the Latin American region. Ernesto Lienhard (BAF Capital´s CIO) talks us through the firm and the vast array of services it provides. Since its inception in 1996, BAF Capital has been providing working capital solutions to the corporate sector in Latin America. Drawing on the vast experience of a team of over 90 people among its five offices in Switzerland, Argentina, Uruguay, Brazil and Paraguay, the firm currently manages two funds. These are the BAF Latam Trade Finance Fund and the BAF Latam Credit Fund, which have a total AUM of over USD 1 billion. Ernesto defines the firm’s client base and outlines how BAF Capital works to ensure that they receive the very best solutions and support.
“Overall, despite a history of turbulent economies and political unrest many global observers believe that the region offers huge opportunities to investors in the near future.” “Our typical clients tend to be mainly in the agricultural sector. These include dairy producers, sugar mills, soybean oil crushing companies, grain exporters, juice producers and beef exporters. We have expanded our business during the last couple of years to include as well companies operating in the energy and oil and gas sectors. Most of the companies we deal with are privately owned and have been in the market for a very long time. They count with important investments in fixed assets, state of the art facilities and an excellent track record as exporters. “Most of our clients have gone through many political and economic crises and have managed to overcome these difficulties. As such we aim to provide them with stability and support throughout the investment process and ensure that they receive the most risk adverse returns possible. Since inception BAF has developed a proprietary methodology in evaluating credit risk and structuring collateralized loans. Our Credit Risk Committee analyses each borrower at least twice a year. The Deal Sourcing team, on the other hand, is not only in permanent contact with them, but also with other lenders, suppliers and other companies operating in the same industry in order to be abreast when taking
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decisions. Risk is mitigated by diversifying our portfolio in terms of countries, products and clients, each of them with our own self-imposed limits. “Fundamentally, all of our borrowers count with different sources of financing; including both domestic and international financial institutions. We have always been an alternative source of finance to our customers. Having being in the market for such a long time, and even during very difficult periods, have shown to them that we are a reliable source of liquidity. Our history has proved this is something that companies consider to be extremely important, especially in the emerging markets.” Looking to the future, the firm has a number of exciting opportunities ahead of it. As Ernesto concludes, the firm is now exploring new options as its current funds reach the end of their trading potential; however, BAF Capital’s focus will remain squarely on ensuring that clients receive the best possible service and returns. “Our Trade Finance Fund which has enjoyed eight years of positive returns for its investors, who include European Pension Funds, Insurance Companies, US Asset Managers, and Family Offices, has now reached its maximum capacity, and as such our marketing efforts are devoted to grow our Credit Fund. The limited availability for financing in the region combined with a lack of modern infrastructure in most of the countries where we operate offers a great window of opportunities in the near future, therefore we are looking forward to taking advantage of this opening. “The Latin American region most important sector is based around agriculture, with many countries producing considerable amounts of food that is exported to the rest of the world. However, with a lack of modern infrastructure in many countries, as well as difficulties in raising the necessary finances to boost exports, many companies have struggled to translate their potential into international trade. “Overall, despite a history of turbulent economies and political unrest many global observers believe that the region offers huge opportunities to investors in the near future, something we quite agree with, and as such we will continue to build upon our local knowledge and experience in the future.”
BAF Capital AG
Acquisition International - Hedge Fund Awards 2017 21
Barington Capital Group, L.P. HF170016
Best Long-Term Activist Investor – USA & Best US Equities Value-Orientated Hedge Fund (5 Years) Company: Barington Capital Group, L.P. Address: 888 Seventh Avenue, 17th Floor, New York, NY 10019 Phone: (212) 974-5710 Fax: (212) 586-7684 Email: email@example.com Web: www.barington.com
Barington Barington Capital Group, L.P. is a fundamental, value-oriented activist investment firm that was established by James A. Mitarotonda in January 2000. Barington invests in undervalued publicly traded companies that it believes can appreciate significantly in value as a result of changes in corporate strategy or improvements in operations, capital allocation and corporate governance.
As an experienced activist investor, Barington brings a private equity approach to investing in undervalued publicly traded companies. The firm’s investment team, advisors and network of industry experts draw upon extensive strategic, operating and boardroom experience to assist companies in designing and implementing initiatives to improve their long-term financial performance. Barington seeks to deliver superior results through: • identifying attractive undervalued companies with significant upside potential that is not being realized; • developing a detailed plan to unlock value through improvements in operations, corporate strategy, capital allocation and corporate governance; and • effectively engaging with the board of directors and management [over a multi-year period] to support and execute the plan.
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Prior Awards In 2015, AI awarded Barington “Best Long-Term Activist Investor – USA and Best Activist Fund (under $1 bn).” Barington has also won HFM’s “Best Event Driven Hedge Fund” performance awards for its AUM category in both 2015 and 2016. Profile of James A. Mitarotonda, Chairman and CEO of Barington Founder James A. Mitarotonda is a highly regarded value-oriented activist investor and an experienced public company director. James currently serves as a director of A. Schulman, Inc., OMNOVA Solutions Inc., The Eastern Company and Barington/ Hilco Acquisition Corp. He is a former director of numerous publicly traded companies, including The Pep Boys – Manny, Moe & Jack; The Jones Group; Griffon Corporation; Gerber Scientific, Inc.; Register. com, Inc.; Sielox, Inc. and Ameron International Corporation. He received a B.A. in economics from Queens College, where he serves as a member of the Board of Trustees, and an MBA from New York University’s Stern School of Business.
Brio Capital Management HF170072
Best USA Focused Event Driven Small Cap Fund (Since Inception): Brio Capital LP Company: Brio Management LLC Name: Steve Obermeister Email: firstname.lastname@example.org Web: briocapital.com Address: 100 Merrick Rd, Suite 401W Rockville Centre NY 11570 Phone: 516-536-0500
Brio Capital Management Brio Capital Management LLC is a New York based boutique investment management firm. We spoke to Shaye Hirsch, the firm’s Founder and Principal, as well as Steve Obermeister, VP of Business Development to learn more about the firm and the investment options it offers.
Brio Capital Management was established in 2006 as an investment firm focusing on companies with a market capitalization of below $250 million. Through its Private Investment Funds, Brio Capital LP and Brio Capital Offshore Fund, Ltd., Brio employs an opportunistic and event-driven investment approach with the goal of maximizing total return by incorporating a variety of strategies. Steve discusses the firm’s core focuses and how it aims to ensure that investors receive the service and returns that they expect. “Here at Brio Capital Management a core area of focus is providing growth capital through a variety of structures to small public companies seeking capital. We seek to tailor an investment with a favorable risk/reward profile for the investor, while maintaining a mutually beneficial, value-added relationship with the company.
“Looking towards the future we anticipate continuous growth of our firm as we seek to build up our assets under management and infrastructure, while continuing to provide our clients and investors with returns on their capital.”
investment opportunities which large funds will not be able to capitalize on. The principal investment objective of the fund is to achieve long-term capital appreciation while emphasizing the preservation of capital. This is accomplished by having in place a disciplined approach including extensive due diligence. This approach has been popular in the firm’s base, New York. Being situated in the U.S. allows the firm access to technology and markets which help it to build upon its current success, as Steve outlines. “Our investments primarily are in US public companies with market capitalizations under $250 million. This region has many opportunities to find value and participate in growth. We believe this region stands to benefit most from the new Presidential administration and its promise for a more US-centric, pro-business environment. Our firm is based in this region so as to have a proximity to our primary investment markets. This allows us to maintain close contact with senior management and stay abreast of latest developments.” Ultimately the future looks bright for Brio, as it continues to grow and expand, as Steve concludes. “Looking towards the future we anticipate continuous growth of our firm as we seek to build up our assets under management and infrastructure, while continuing to provide our clients and investors with returns on their capital.”
“Over the last decade, our mission has remained constant; to produce a successful risk-adjusted track-record while navigating through various market environments. Our client base is comprised of HNW, UHNW, Foundations, and we have an open, transparent relationship with every one of them. Our firm offers a niche investment strategy, providing diversity within an individual’s overall investment universe.” With its established track record and proven ability to minimize risk and preserve capital in the most challenging investment environments, Brio is able to showcase its ability to act as a small fund which is both nimble and able to take advantage of
Acquisition International - Hedge Fund Awards 2017 23
Carlisle Management Company HF170035
Best Global Investment Management Firm & Best Long Term Growth Fund (1 Year): Carlisle Luxembourg Life Company: Carlisle Management Company Name: Jose C Garcia, CEO Email: email@example.com Web: www.cmclux.com www.luxlf.com Address: 9 rue Sainte Zithe. 1st Floor Luxembourg L-2763 Phone: +352 268 453 59
Carlisle Carlisle Management Company SCA specializes in, both, open-ended investment funds and related private equity fund transactions within the alternative asset sector. We caught up with CEO Jose Garcia to learn more.
Carlisle Management has been based in Luxembourg since 2008, where it established its headquarters and fund domicile due to the small country’s reputation as home to one of the world’s most stringent and well-regulated financial systems for alternative assets. Over the years, Carlisle has diligently strived to provide a wide variety of clients, with access to insurance-linked investment products by offering intelligent alternative fund management solutions designed to work with a wide array of institutions, corporations, public funds and high-net-worth individuals. Jose discusses the firm’s service offering in more detail, outlining how it protects investors from excessive risk and market volatility. “At Carlisle we believe that offering investors access to asset types outside the traditional range of choices (i.e. equities, bonds, money markets) helps further diversify their portfolio, therefore helping to mitigate the overall risk level. Our company’s flagship product, The Luxembourg Life Fund, focuses on life settlements, an asset class that
holds an uncorrelated relationship with traditional economic drivers such as interest rates, stocks and bonds. This allows us to focus on minimizing the specific risks of the particular underlying assets and do so without an elevated degree of concern regarding what might be happening in the overall economic environment at that moment.” While many financial institutions try to provide disparate services, Carlisle believes that having a tireless focus is the right strategy. The company has developed, initiated, distributed and managed investments specifically for institutional investors and financial intermediaries within very niche sections of the alternative assets space. Jose outlines in detail how the firm’s niche sector allows it to offer innovative services which meet its client’s needs. “After years of assisting institutional clients in the development, structuring and management of captive investment vehicles, Carlisle became aware of a lack of products which could offer long term growth focused investments within the life settlements space to investors who did not have enough capital to efficiently build their own captive structure, yet were interested in this minimally correlated asset class. From this, their flagship investment vehicles, the Luxembourg Life Fund: Long Term Growth Fund FCP SIF was born, lending its open ended structure to investors who wished to participate in a larger pool of life settlements while maintaining a higher liquidity profile.” Moving forward, Jose is optimistic about the future of the company as it seeks to capitalise on increased interest in its innovative strategy. “Looking ahead, 2017 is set to be another monumental year for Carlisle. As exposure and investor interest grows, we plan to use this momentum to bolster our already formidable footprint in the marketplace and form new strategic partnerships that will enforce our firms forward thinking philosophy and help us remain at the forefront of the industry. It is our intention to continue playing a strong leadership role in the life settlements industry, by innovating and promoting education and asset awareness.”
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Churchill & Associates HF170086
Best Asset Management Firm 2017 - Georgia Company: Churchill & Associates, Ltd Name: Chris Smith Email: chris@ churchillandassociates.com Web: churchillandassociates.com Address: 235 Peachtree Street, Suite 400 Atlanta, GA 30303 Phone: 404-475-5610
Churchill & Associates Churchill & Associates (C&A) provides a range of international financial services, including advisory services, underwriting, financing, market making, and asset management on a global level. We caught up with Chris Smith to tell us more.
C&A is a privately held alternative asset management and investment banking firm operating across five core sectors: wealth management; wealth management in the Asia Pacific region; personal and corporate banking; asset management; and investment banking. Chris talks us through the firm’s hedge fund strategy specifically, explaining how it aims to provide the strongest returns possible whilst remaining risk averse. “Here at C&A, our hedge fund strategy is a fund of hedge funds in which we offer our clients experienced and talented managers with exceptional skills based on past performance and other factors instrumental to constructing a unique portfolio of bonds, stocks and derivatives. Our approach to risk is based on a principal protection approach where we guarantee to return, at a minimum, all invested principal while seeking to maximum returns on the client’s investment.” The company’s mission is to serve the investors through substantial capital appreciation and dividend returns and to create portfolios with low risk/ high return profiles. To achieve this the firm works collaboratively to foster good governance, integrity and accountability and address obstacles to a sustainable financial system that lie within market practices, structures and regulation.
Ulitmately, what sets the firm apart from other firms in the hedge fund market is its dedication to transparency and passion for communication, which ensures that clients always feel supported, as Chris explains. “What differentiates C&A from its competition is how well we articulate how we invest and what makes our performance results repeatable. Our story of how we invest, based on our investment beliefs and the process we use to assemble and manage the company’s basket of holdings, is the subjective aspect of what we have been able to get our investors to understand, buy into and what they are constantly able to discuss, if need be, the constituents our investors invest for and report to.” Looking ahead, Chris believes the firm is in for an exciting year as it seeks to build upon its current achievements. “As the year progress we have several exciting projects coming to the firm within the next three months and are looking forward to taking advantage of the opportunities these will bring for us.”
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CoreCommodity Management HF170055
Best for Pension Investment Management Services 2017 - Connecticut Company: CoreCommodity Management, LLC Name: Eliot H. Geller, CAIA Email: egeller@ corecommodityllc.com Web: www.corecommodityllc.com Address: 680 Washington Boulevard, 11th Floor Stamford, CT 06901 Phone: 203.708.6513
CoreCommodity Management CoreCommodity Management, LLC is an independent asset management firm, whose singular focus is to provide commodity exposure to investors globally via commodity futures and natural resource equity strategies. We caught up with Managing Director and Commodity Product Manager Eliot Geller to learn more.
Established in 2003 by an experienced team of professionals who helped pioneer commodities as an institutional asset class, CoreCommodity Management has since provided commodity exposure to a wide range of clients. These include sovereign wealth funds, public and corporate pension plans, endowments and foundations, not-for-profit organizations, religious institutions, insurance companies, asset managers and other prominent institutional clients. Eliot outlines the strategies these clients are provided with in order to ensure strong return on their investment.
“As a firm, CoreCommodity Management remains dedicated to providing investors with access to the commodities market, and this will remain our ongoing focus moving forward.” “CoreCommodity specializes in long-only commodity asset management. Our strategies are available across multiple jurisdictions via private commingled funds, collective investment trusts, SICAV II, separately managed accounts and funds for which the firm acts as a sub-advisor, including a U.S. mutual fund. The firm is experienced and able to tailoring products and strategies through both funds and separately managed accounts for specific investor requirements including Socially Responsible Investing Environmental, Social and Governance, as well as moral and religious principal considerations. “Our personnel have led the design, trading and management of leading commodity products since the inception of the modern era of commodity indexes, contributing meaningfully to their adoption by institutional investors globally. These
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professionals designed and launched the AIG Commodity Index in 1997 (now known as the Bloomberg Commodity Index) and orchestrated the latest revision to the Thomson Reuters/ CoreCommodity CRB Index in 2005.” Fundamentally, it is the extensive experience and commodity knowledge of the team, especially its principals, which provides a unique set of insights for the design and implementation of the firm’s actively managed commodity strategies. Eliot concludes by emphasising the continued need for this dynamic approach as the continued broad price declines in commodities have brought several markets to key levels of resistance recently, priming the asset class to continue the commodity market rally witnessed thus far in 2016. “As a firm, CoreCommodity Management remains dedicated to providing investors with access to the commodities market, and this will remain our ongoing focus moving forward. Additionally, the firm continues to see interest in its broadening capabilities managing natural resource equity strategies.”
EastBay Capital HF170030
Best Global Long/Short Equity Fund Manager - New York Company: EastBay Capital Address: New York
EastBay Capital EastBay Capital offers a global long/short equity hedge fund focused on the Technology, Media, and Leisure (TMTL) sectors. We profile the firm and explore the experience that has helped drive it to its current success.
Drawing on a combined 32 years investing in the global TMTL universe, EastBay Capital offers investors an attractive TMTL sector backdrop with powerful trends and clear winners and losers regardless of global macro, fiscal, or monetary policy as well as the ability to generate superior net returns in all market conditions with low correlation to global indices. Its Senior Management team has the experience and industry knowledge to drive the firm to success. Adam Wolfberg, Managing Partner and Portfolio Manager has spent the past 18 years as a portfolio manager focused on the TMTL sectors. Most recently, Adam spent five years at Diamondback Capital where at the time of his departure he was head of the TMT practice at the firm. Prior to that, he
“Fundamentally, EastBay Capital is able to deliver consistent alpha regardless of market dynamics, and this will remain the firm’s ongoing focus moving forward.” Adam Wolfberg
served as founding partner and portfolio manager of XI Asset Management, a long/short global TMTL focused fund, and has also ran the Explorers Fund at Galleon Asset Management and was a portfolio manager at SAC Capital Advisors. Overall, Adam is regarded as a top TMTL portfolio manager in the hedge fund community. He has a reputation of integrity, strong risk management and consistent returns. He has successfully launched and managed a fund operation at XI Asset Management and brings with him a seasoned team of professionals. Alongside Adam is Steve Landry, the firm’s Managing Partner and CIO, whose career has been dedicated to equity research, fundamental analysis, and managing TMTL sector portfolios since the late 1990s. This experience includes seven years investing with a value-based, longterm fundamental approach at Franklin Templeton Group and as the Global Internet/Media sector head at Citigroup Asset Management. Between 2004 and 2012, Steve generated significant alpha in a dynamic long/short equity book- both as a partner at XI Asset Management and later as Associate PM at Diamondback Capital. He is regarded as a leader in the TMTL investment community with a reputation for consistent, solid returns; identifying trends ahead of consensus thanks to a unique, global perspective; and as “a sceptic at heart” who is not afraid to share an opinion. Beginning in 2011, Steve played a major role in the long overdue changes made at Yahoo necessary to unlock shareholder value. Ultimately, EastBay Capital sees the “challenging” Hedge Fund environment as an opportunity, and is well-positioned to understand the behavioural, technical, and fundamental factors at work. The firm’s analytical and structural edge can be found in experience, process, and portfolio construction, which is becoming more important in the market. Fundamentally, EastBay Capital is able to deliver consistent alpha regardless of market dynamics, and this will remain the firm’s ongoing focus moving forward.
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Forefront Capital HF170002
C A P I TA L
Company: Forefront Capital Advisor’s Name: Cole Reifler Email: creifler@ forefrontincometrust.com Web: www.forefrontgroup.com Address: 7 Times Square, 37th Floor, New York, NY 10036 Phone: 212-607-8150
New Best Integrated Investment Management Platform - New York & Best Fixed Income Credit Fund (1 Year): Forefront Income Trust
Forefront Capital Forefront Capital Advisors, LLC is a multi-faceted financial services firm dedicated to providing innovative products and services to our clients. We caught up with Founder Brad Reifler to find out more.
Forefront’s objective is to give our clients access to a portfolio that maximizes potential returns by investing in high yielding, short duration structured credit opportunities. The firm’s differentiated community of business leaders provides access to credit opportunities typically unavailable to boutique firms. Brad outlines additional features which set the firm apart from the rest of the market. “Forefront has always strived for differentiation and has created products and solutions to separate themselves from its competition. As such our flagship investment product, Forefront Income Trust was created to go against the traditional hedge fund and charge no management fees and make no money until the investor received 8%. This fee structure has given Forefront the ability to differentiate themselves among other competitors who charge large fees for their services. Our origination and structuring ability is another differentiating factor and has allowed us to create a portfolio of high yielding risk mitigated structured credit opportunities that has outperformed the market since inception.
“Fundamentally we believe that Forefront is a very innovative, unique company that aims to provide our investors with the best opportunities available. By using our structuring and origination ability we have been able to provide our investors with great returns and hope to continue to do so.” Ultimately despite the uncertainty that looms with the advent of recent political and social changes, Brad is keen to emphasize that Forefront will aim to offer safety and security to clients as the firm looks towards 2017 and beyond. “Currently we are in the process of opening up an offshore vehicle to expand our offerings internationally. With the uncertainty in emerging markets we will provide an alternative investment solution for international clients in need of yield and safety.”
Acquisition International - Hedge Fund Awards 2017 29
Fort Sheridan Advisors HF170071
Best Managed Accounts Investment Boutique - USA Company: Fort Sheridan Advisors, LLC Name: Peter Karmin Email: Peter@Fortllc.com Web: www.Fortllc.com Address: 600 Central Avenue, Suite 365, Highland Park, IL 60035, USA Phone: 001-847-559-9703
Fort Sheridan Advisors Fort Sheridan Advisors LLC is a boutique Registered Investment Advisor based in Illinois. We invited Peter Karmin to talk us through the firm’s service offering and how it aims to offer the tailored investment products designed to meet the needs of its investors.
Founded in 2009, Fort Sheridan Advisors was originally focused on macro strategies with a special emphasis on derivatives. During the past few years, the company’s focus has expanded to managing equity portfolios both on the long and short side. Peter outlines in detail the wide range of services the firm now offers clients.
“What differentiates us from larger firms in the industry is that we pride ourselves on the service and care we give to each of our mandates.” “Here at Fort Sheridan Advisors, all of our services and mandates are customized. We work closely with the investor in managed accounts and funds of ones. Our mandates have included long volatility / tail strategies, FX hedging, Icelandic government and mortgage bonds, Asian swaption portfolios and most recently shorts in utility stocks. Across all of these mandates we have worked with our investors in designing and managing the portfolio providing the specific exposure they are seeking.
“In addition, we also serve as an outsourced ‘trading desk’ for our clients. They come to us with areas they are looking to invest in either as an alpha or hedge product. We work with them on ideas, help them execute the strategy and oversee it. For our long option / volatility strategies, we manage the portfolios based off of a pre-determined annual ‘decay’. For strategies with undefined risk, we frequently truncate the exposure by buying out of the money options which effectively serve as stop losses.” Working in such a competitive industry means that differentiation is vital, as Peter emphasises as he discusses how the firm marks itself out as the best option for investors. “What differentiates us from larger firms in the industry is that we pride ourselves on the service and care we give to each of our mandates. We provide full transparency to our investors with position details and scenario analysis such that investment results should meet our client’s expectations if the underlying thesis proves correct. For an institutional investor, we provide an individualized investment vehicle that caters to their model rather than the other way around. We differentiate ourselves because we try to construct portfolios that take advantage of supply and demand imbalances. Our most recent mandate came from our idea that the low rate environment has created an overvaluation in assets that serve as yield alternatives. “Investors have flocked to dividend stocks and utilities in particular. Additionally, the underlying utility business model is outdated and is being threatened by technological disruptions such as Nest or Google’s Deepmind.” Looking ahead, Peter believes that the firm has a prosperous and invigorating future ahead of it as it seeks to grow and expand in order to capitalise on its current success and support a wider range of clients. “Moving forward we are excited about our growing long / short equity business. We are actively pursuing mandates involving the renewable energy space as we believe that this is an ever expanding market which our investors, both existing and future, will want to move into.”
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GAIA Capital Management Ltd HF170077
Best New Systematic FX Program: GAIA Capital Management Ltd (GAIA FX+) Company: GAIA Capital Management Name: Nicholas White Email: firstname.lastname@example.org Web: www.gaia-cap.com
GAIA Capital Management Ltd GAIA Capital Management is a boutique investment advisory firm with offices in Seychelles, Dubai and Cyprus. We invited Nicholas White to provide us with a fascinating overview of the firm, its subsidiary GCM and the range of investment solutions it offers. Established in 2014 as a spin off from GAIA Capital Partners, GCM has continued to provide stable and secure returns for investors in the Alternative Sector. Registered as a CTA with the NFA, GCM advises a broad base of institutional and HNW individual investors from four continents. Specifically focussed on the FX and Commodities markets, GCM employs a rules based systematic approach to investing. Nicholas outlines the firm’s service offering in detail and explains how the firm supports clients in order to ensure that they receive the very best investment products which meet their needs.
“The experience, pedigree and market knowledge of our Team over the past four decades provides our clients peace of mind and security that can only be achieved by hands on experience throughout multiple market cycles.”
“GCM provides Managed account and Currency overlay services. All of our Managed Account clients are treated equally irrespective of size of investment and all follow the same signals and positions with the only variants being the desired risk exposure, which is dictated by the client. We trade directly in the international spot FX markets and the Global Energy and Precious Metals Futures markets. Our program mitigates volatility through a dynamic risk management approach and a diversified mixture of markets and time horizons. “Overall, our mission is to efficiently make profit for our clients with the minimal risk and overall financial exposure. Our Program’s continue to evolve and will automatically adjust to increased volatility affording our clients a smooth return profile in all market conditions. The experience, pedigree and market knowledge of our Team over the past four decades provides our clients peace of mind and security that can only be achieved by hands on experience throughout multiple market cycles.” Looking ahead, globalisation and digitalisation within the investment market mean that firms have to be increasingly global. With a base in Dubai, UAE GCM is ideally situated to benefit from market moves across the three major trading time zones, Asia, Europe and US. Nicholas outlines how its geographic base supports the firm in remaining at the forefront of this emerging market and how this will remain at the forefront of the firm’s focus moving forward. “The Globalisation of the Investment industry has affected everyone over the past 10+ years. Financial Centres have shifted in their dominance and importance and the continued growth of the Middle East and Asian markets will continue to influence both global markets and investor focus in the years ahead. From a capital acquisition perspective, the Middle East and Asia continue to provide the majority of our investor base and we foresee this trend increasing in the coming years. Both the Partners and staff have a long history of working together and all will continue to share in the success of GCM ensuring an aligned focus on the future success of GCM as we look to the future.”
Acquisition International - Hedge Fund Awards 2017 31
Geluk Global Gold Fund HF170080
Best New Global Gold Fund: Geluk Global Gold Fund (Class C)
GelukGoldFund Company: Geluk Global Fund Ltd SAC Fund: Geluk Global Gold Fund Manager: Geluk Capital Management Ltd Address: Suite 205A, Saffrey Square, Bank Lane & Bay Street, P. O. Box N-9934, Nassau, NP The Bahamas Email: email@example.com Phone: +1 242 702 3121 Web: https://gelukcapital.com
Geluk Gold Fund, part of Geluk Global Fund Ltd SAC portfolio, managed by Geluk Capital Management Ltd., implements an absolute return strategy focused on gold and other precious metals that will complement any asset allocation. Geluk Capital Management Ltd is a Bahamas registered management firm providing investment services to the Geluk Global Fund for qualified investors worldwide. The firm’s objective is to deliver capital growth in excess of industry standards while implementing disciplined risk management systems and delivering the most efficient risk-reward ratio to our investors. It’s our philosophy that sets up apart from other funds. While most funds are focused on the manager, our focus is on our investment strategy and risk management. We selected two extraordinary investment teams, both with over 20
“It’s our philosophy that sets up apart from other funds. While most funds are focused on the manager, our focus is on our investment strategy and risk management.”
years’ experience, to implement a unique multistrategy that consistently delivers above average returns with lower volatility. The firm’s portfolio includes the Geluk Gold Fund, an absolute return strategy with concentrated investments in gold, precious metals and currencies correlating with gold. As the foundation of monetary systems for thousands of years, gold is one of history’s most recognized and valuable metals. Although no country utilises the gold standard anymore, demand for the product as a substitute to today’s currencies has grown in recent years due to the stability of this precious metal. The Geluk Gold Fund is designed to complement any traditional asset allocation. The strategy uses a proprietary non-correlated multi-algorithm, while maintaining strict risk management with pre-defined limits and exposures. This strategy has been developed and refined over the past three years. Our Gold Strategy Fund launched February 2016, producing a net return of 43.4% as of December 31, 2016. Risk Management is a vital component of Geluk’s trading programs. Our philosophy is that Risk Management is arguably more important than the trading strategy itself. In an effort to minimize losses that may occur in volatile markets, the open positions are tested frequently using stress tests that indicate the effects of an unusual market situation. Geluk has also implemented a 24/7 automated risk management system that monitors all our trading accounts to ensure the prescribed risk parameters are followed. In the event these parameters are neglected, the system will lock out the trader for a prescribed period of time, and in case of a drawdown will automatically sell-out the position to protect the integrity of the portfolio. Ultimately, Geluk offers a unique opportunity for investors to diversify with two exceptional managers under one roof. With a modest investment, an investor can enhance their current investment portfolio with Geluk Global Funds, and continuing to provide this excellence in both returns and support will remain the company’s focus over the months and years to come.
32 Acquisition International - Hedge Fund Awards 2017
Grand Alliance Asset Management HF170078
Award for Innovation in Market Neutral Hedge Strategies: Sino Vision - Greater China Market Neutral Fund Company: Grand Alliance Asset Management Limited Email: firstname.lastname@example.org Web: www.gaamhk.com Address: 19/F, Hip Shing Hong Centre, 55 Des Voeux Road, Central, Hong Kong Phone: 852 2537 6862
Grand Alliance Asset Management Limited Grand Alliance Asset Management (GAAM) is a Hong Kong based, Asia focused fund manager and investment advisor. We invited Evelyn Chen to tell us more about the firm and the investment products it offers. Grand Alliance Asset Management was established in May 1997, as both a Hong Kong SFC registered investment adviser advising on securities, Type 4 regulated activity and fund management company providing asset management and Type 9 regulated activity. The firm is made up of a team of finance professionals with extensive experience in global financial markets, particularly in the Greater China markets, including Taiwan, Hong Kong and China, with clients including high net worth individuals, fund of funds, institutions and pensions. Evelyn outlines the firm’s aims and how it works to achieve these and support its investors. “Here at GAAM, we aim to achieve consistent absolute returns, with a target annualized return of 10%+ and minimized risk (relatively low exposure to market risks). In addition, our overall mission is to become a leading investment manager in the Asia Pacific region. “To achieve these ambitious goals we utilise our many years of experience in successfully delivering alpha in both up and down cycles, by longing outperforming stocks and using index futures to hedge. Our dedicated and experienced valueinvesting team support us as we focus on Market Neutral and Low Delta Exposure investment strategies and Greater China shares markets, where we have an edge.” The firm’s award winning Sino Vision Greater China Market Neutral Fund is constructed to generate risk adjusted returns with low volatility and low downside risk. The Fund is targeting investors who seek Alpha without increasing the risk in their existing portfolios. Evelyn outlines the fund’s strategy and how it is focused around strong, risk adjusted returns. “Since inception in Jan. 2010 until Oct. 2016, the fund has generated 91.3% return (compounded annualized return 10.0%), outperforming MSCI Asia Index and HFN Market Neutral Equity Index by 75.9% and 67.1%. Gross exposure is normally in the range of 250-300% with net delta exposure below 10%. The beta of the portfolio is managed to be close to zero to minimize market risk.
“Our edge is that we discover undervalued mid-cap stocks before other investors so that we can enjoy earnings and PE multiple expansion. We try to focus on the investment strategies that we are good at and minimize the investment approach we are not good at it, such as market timing and economy cycles. As such, we hedge market index to minimize those risks. As a result, our return is a measure of alpha. This strategy requires us to cover almost every sector and by doing that, we can discover the sector turning point earlier and also keep a nice balance of the portfolio. “The fund typically holds between 40 and 80 names, majority in Taiwan with a small China and US exposure, with the top 10 names typically accounting for 35% exposure. 70%-80% of fund’s positions are in mid-large cap stocks (over $500mn). The portfolio is well diversified to various sectors with a focus in technology and Greater China consumption plays. Core position sizing is around 4-5% with average position size around 2-3%. We focus on mid-cap as an area of inefficiencies and believe that our ability to identify under-researched and undervalued stocks much earlier than many other investors allows us the opportunity to participate in a much higher rate of multiple expansion as the market also eventually comes to identify these opportunities. The stock selection process involves top-down sector views and bottom up stock picking in each sector. “To minimize the downside risk, we have a strict risk management process that enables us to maintain our hit rate and minimize the effects of underperforming investments. If there is any deviation of the portfolio from its investment objective, restrictions and guidelines, risk managers are required to immediately communicate with the portfolio managers for immediate actions.” Looking ahead, Evelyn discusses the fund’s future focuses as the firm looks to build upon its current success. “Sino Vision is a market neutral fund which invests in Taiwan, China and China concept shares (listed in Taiwan, Hong Kong and the US) hedged by shorting index futures, so the performance of the fund is determined by our stock selections, not market directions. Sino Vision aims to deliver consistent absolute returns in excess of 10% per annum in both bull and bear cycles.”
Acquisition International - Hedge Fund Awards 2017 33
chartered accountants & tax advisers
Company: haysmacintyre Name: Bernadette King Email: BKing@haysmacintyre.com Web: www.haysmacintyre.com Address: 26 Red Lion Square, London WC1R 4AG Phone: 020 7969 5500
Best Hedge Fund Manager Audit and Accountancy Firm 2017 – UK & Recognised Leaders in Tax Advisory Services – UK
haysmacintyre haysmacintyre is a leading mid-tier firm of chartered accountants and tax advisers based in central London. We invited the firm’s Head of Financial Services Bernadette King to tell us more about the firm and the range of support, advice and services it provides.
Formed in 2001 through the merging of two established chartered accountancy firms, haysmacintyre draws on this vast industry experience to provide expert advice to entrepreneurs, fast-growing and owner- managed businesses, listed companies and charities and not for profit organisations across the UK and internationally. The financial services sector is a key sector for the firm, focusing on hedge fund managers and other regulated businesses. The team is led by Bernadette, who has been advising businesses in the financial services sector for over 17 years and is a member of the ICAEW’s FS Faculty and 100 Women in Hedge Funds. She proudly talks us through the team and the range of solutions it offers.
“Our mission is to be recognised as expert business advisers to hedge fund managers and the wider SME and NFP community.” “haysmacintyre’s specialist financial services team has extensive knowledge and experience in advising hedge fund managers on the issues they face, which enables us to apply our deep sector experience to support the needs of these businesses. “Our financial services team was established over 17 years ago and currently acts for over 100 fund managers. We build lasting relationships with our fund manager clients who value our open, honest and down-to-earth approach and they are happy to recommend us. From start-ups to established businesses, we help at any stage of the business life cycle.” As a business haysmacintyre are among only a few firms which bridge the gap between the largest firms that do everything but can lack the personal touch, and smaller firms that may only be able to provide a narrow range of services. This is particularly vital for those in the hedge fund space as the advice of a sector specialist auditor and adviser can ensure
34 Acquisition International - Hedge Fund Awards 2017
from the onset that a hedge fund manager start-up makes the very best use of the options available to it and complies where its choices are limited. Therefore, haysmacintyre aims to offer the very highest standard of support and client service, and its team is available year round to answer client questions as they arise. This client focus helps the firm to achieve its overall mission, as Bernadette explains. “Our mission is to be recognised as expert business advisers to hedge fund managers and the wider SME and NFP community. To achieve this our marketing strategy concentrates on a number of key sub-sectors within the corporate and not for profit arena. In addition, our ethos of wanting to help our clients succeed in business drives our investment in client facing time and continuity of service. Our longstanding client relationships deliver both cost and time savings for clients. “It is our aim to continually provide clients with a pragmatic approach which is achieved through our partner-led approach to service delivery. This top level service is driven by deep sector knowledge. Our leadership team has established rigorous quality assurance standards and managers cascade these protocols, sharing key learning with the teams continuously.” Fundamentally, Bernadette is eager to emphasise that staff are central to the firm’s success, which is the reason that the firm are committed to creating a friendly, inclusive culture where every individual has the opportunity to develop and make a real difference to both the firm and clients. “As a top 30 UK accountancy firm, we offer a dynamic place to start and progress the careers of our staff, whilst gaining prestigious professional qualifications. Each year, we recruit over 20 graduates and we help them develop their professional skills with on-the-job coaching, study support and top class training to give them the strongest possible foundation for their business career. We provide regular training courses and topical sessions for our staff to ensure they remain
up to date technically and they are knowledgeable of sector challenges and opportunities. “In addition to the training opportunities available at haysmacintyre, the firm’s vast growth and inclusive and dynamic culture attracts experts to join our team, which complements our experience to further develop the service delivery to our clients.” Overall, the past few years have seen excellence growth for haysmacintyre, and looking ahead Bernadette believes that this will continue into the future thanks to the firm’s proactive approach and client focus. “haysmacintyre has experienced considerable growth, having grown by 29% organically over the last three years, and we expect this to continue through continuous innovative growth and increased staff and partner count. 2016 saw an increase in revenues by 10.3%, the appointment of three partners and an increasing headcount. This growth is expected to continue over the forthcoming year.”
Acquisition International - Hedge Fund Awards 2017 35
Best Swiss Alternative Investment Boutique & Best New Mixed Assets Fund: HERCULIS Partners Gemini Fund - Gemini II Company: Herculis Partners SA Name: Nikolay Karpenko Email: nkarpenko@ herculispartners.ch Web: www.herculis.ch Address: 30, rue du 23 Juin, Porrentruy 2900, Switzerland Phone: +41 32 5520220
Herculis Partners Herculis Partners SA is a wealth and investment boutique which specialises in providing added value to high net worth individuals, family offices, charities and endowments through a responsible business approach. We invited Board Member Nikolay Karpenko to explain the company’s innovative approach in more detail.
Established in 2009, Herculis Partners operates across the wealth and asset management and investment banking industries, taking into account the principles of ethics, transparency and performance to provide strong, secure returns for investors. Nikolay outlines how this is achieved through its investment strategy. “Herculis Partners provides wealth owners with easy access to unique set of alternative investments like hedge fund, private equity fund, wine and precious stone investments in order to preserve and multiply their capital. Our approach revolves around making alternative investments as accessible, liquid and cost effective as much as possible.
““All of our products are completely different from what our competitors are offering.” “All of our products are completely different from what our competitors are offering. The key advantage to working with Herculis Partners is that investors join us in our investments and share with us all risks and rewards. The core area of our business development is our Sharia-compliant Fund with elements of social responsible investments as well as Global Water Fund and Trade Finance Fund. “Another key differentiating factor is that we invest our own capital at the beginning and only then propose to our clients to join us. We call this approach an alignment of interests and it ensures that our staff are personally invested in ensuring that our investment products are profitable and risk averse.” Throughout the financial market, new trends and regulatory environment changes are providing challenges for everyone in the industry. In these circumstances, Nikolay sees the firm’s main tasks as helping the wealth owners to increase wealth through VC and PE Investments and M&A deals,
36 Acquisition International - Hedge Fund Awards 2017
to preserve and multiply wealth through passive and active operations on global securities markets, to protect wealth from states, creditors and raiders and pass it on successors and to distribute wealth on environmental and society needs according to customers’ altruistic ideals and values. “Our core business focus is alternative investments, a class of assets which includes hedge funds, private equity funds, venture capital funds, commodities, derivatives, property, wine, art, antiques, coins, diamonds, stamps and other non-conventional investment instruments. These products are attractive to investors mainly because of their low or negative correlation with standard class of assets like stocks and bonds. But alternative investments may be relatively illiquid and sometimes it may be difficult to determine them current market value. Also, there may be limited data about historical risk and return as well as exist relatively high costs of purchase and sale. “Today, investors are more familiar with alternative investments than they were 20 years ago. Hedge fund, PE and VC fund industries are growing fast and absorbing huge amounts of money. Clients are looking for low volatile instruments but with attractive returns in conditions of low interest rates when all securities markets are overvalued. The allocation of alternative investments in their portfolios is achieving 15-20%. This offers firms such as ours a big opportunity to strengthen relationships with the clients as they are becoming keen on alternative investments. “Overall investors are generally fairly cautious about alternative investments but when you talk to them about precise and concrete subjects, they are ready to be committed and involved. Recently investors have become increasingly keen to invest in tangible items with substantial intrinsic value such as real estate, art works, wine, coins or precious stones, and as such we have been moving into these areas, supporting clients using our vast sector experience to ensure that they make the best possible investment decisions.”
Looking to the future, Nikolay discusses the firm’s move into physical banking as it offers clients the option to rent the equivalent of a safety deposit box for their valuables. “Herculis Partners has finished the reconstruction of Herculis House, our dedicated bank, and opened its own safe vaults with duty-free status in order to keep in custody clients’ precious stones, wine and art of works on low profile basis. Also, a client can save 8% on custom duty tax payment by placing physical assets under duty-free regime, keeping their assets and goods under this regime for as long as they need to. The strong custody measures we have created meet security and resistance level comparable to a top banking vault, offering clients the security they need. This is a new venture for us and we are excited about the opportunities it will afford us. “Alongside this, the firm is also keen to expand geographically and support clients in new regions. Currently Herculis Partners SA has three offices in Switzerland: Porrentruy, Geneva and Zurich. Our ongoing strategy involves obtaining a strong presence in Dubai over the coming years, with a focus on investment and business opportunities not only in GCC region but also on the African continent, where we can see a big potential for private equity investments.”
Acquisition International - Hedge Fund Awards 2017 37
Laureola Advisors, Inc. HF170076
Best Life Settlements Fund Manager 2017 & Best US Fixed Income Fund (Since Inception): Laureola Investment Fund Company: Laureola Advisors, Inc. Name: Tony Bremness, Managing Director Email: Tony.Bremness@ LaureolaAdvisors.com Web: www.laureolaadvisors.com
Laureola Advisors, Inc. Laureola Advisors is a specialist asset manager focused exclusively on Life Settlements. We explore the firm’s reasoning behind focusing on this niche asset class and the benefits it offers investors. Investment goals, including safety, mean different things to different investors. For most Private HNW Investors, the key criteria are 1) achieving a consistent return, 2) generating a suitable level of income, and 3) keeping investment risks low and well managed – i.e. high levels of safety. The Laureola Fund satisfies Private Investors by providing high levels of safety combined with sustainable and reliable returns. The fund invests in Life Settlements. In the USA, it is both legal and encouraged for an individual to sell his Life Insurance Policy if it no longer needed or wanted. The investor buys the policy, pays the premiums, and eventually collects the death benefit from the insurance company. Investors pay on average 3x to 4x more for the policy than the insurance companies offer, making both the buyer and the seller winners in a Life Settlement transaction.
Life Settlements currently trade at average IRRs (yield) of 14%, despite being backed by companies rated A+ or better. The combination of double digits returns, minimum credit risk, and a certain outcome, is an early indication of above average safety. In addition, these investments also offer safety by their ability to generate returns without price movements. The assets are typically bought at between 10% and 25% of final value, offering safety in two ways; 1) there is a large margin for error between 25% and the 100% eventually collected; 2) the final amount and the investment returns will be generated even in the complete absence of future buyers. Life Settlements can be traded if necessary, but unlike equities they do not need liquidity to generate returns.
December 2016 REOLA INVESTMENT FUND INVESTMENT LAUREOLA FUND Dedicated to Life Settlements
Dedicated to Life Settlements
Performance as of 31 December 2016
Safety is also provided via the investment strategy of the Fund – “don’t lose money”. Losing months are infrequent and modest. While other Funds may outperform over the short term, a steady and reliable performance will come out on top over a multi-year time horizon.
Fund’s Advisors have several competitive VALUE OF $1,000 INVESTED (USD) VALUE OF $1,000The INVESTED (USD) FUND DETAILS advantages that help make the investment safe.
Investment minimum: $100,000 $2,500 Follow-up Investment: $25,000
Liquidity: Monthly (90 days’ notice) $2,000 Redemption fees years 1-3
Administrator: Apex Fund Services $1,750 Custodian: Bank of Utah $1,500 Corporate Trust Division
$1,750 $1,250 $1,000
Regulator: The Bermuda Monetary Authority
2013 $ 2014 1.9% $
1.7% 0.1% 3.0%
2015 1.0% $ 2016 0.5% $
6.0% 0.4% -0.3% 0.9% 0.2% 2.5% 1.4%
3.0% 1.1% 6.0% 0.7% 0.4% 5.9% 0.1%
0.6% 1.7% 0.2% 2.4% 0.7% 0.4% 0.1%
Additional safety is provided by the Fund structure, with world class providers for Custody, Fund Administration, Valuation, Actuarial Consulting, and Audit. There is a strong alignment of interests between the Fund Advisors and the investors; the Advisors only take performance fee on realised gains, removing any accounting risk for the investors.
Valuation $1,250 Consultant: Lewis & Ellis Auditor: Deloitte
They have multiple sources of supply, and a unique access to the deal flow. They have multiple sources of cash to ensure there is always the necessary cash flow to pay premiums. And they are able to adapt to changing market conditions, allowing them to always search out the best assets when markets change.
3.9% 1.7% 0.1% 0.8% 3.0% 0.8% 0.5%
PERFORMANCE ANALYSIS (USD) THE INVESTMENT
38 Acquisition International - Hedge Fund Awards 2017
Oct 1.9% 1.9% 1.0% 0.5% 5.8% 1.6% 1.3%
Overall, for investors seeking above average safety without sacrificing returns, the Laureola Investment Fund is worth considering. Jun
Nov 6.0% 1.9% 0.9% 2.5% 0.6% 1.4% 7.3%
Dec 3.0% 3.4% 0.7% 5.9% 0.2% 0.1% 3.7%
Year 0.6% 24.8% 2.4% 0.4% 18.5% 0.1% 31.9%
3.9% 0.8% 0.8% 0.5%
1.9% 5.8% 1.3% 1.1%
1.9% 0.6% 7.3% 1.0%
3.4% 0.2% 3.7%
24.8% 18.5% 31.9% 10.7%
THE INVESTMENT ENVIRONMENT
Pluscios Catalyst Fund HF170081
Best Distressed Securities / Event Driven FoF (10 Years): Pluscios Catalyst Fund Company: Pluscios Management LLC Name: Kelly Chesney Email: Kchesney@pluscios.com Web: www.pluscios.com Address:1603 Orrington Ave. Suite 750, Evanston, Il 60201 Phone: 224-420-7044
Pluscios Catalyst Fund Pluscios Management LLC is an alternative asset solutions provider that creates customized solutions to access the hedge fund market. We invited Kelly Chesney to tell us more about the firm and the investment opportunities it provides to its institutional clients.
Pluscios is a boutique firm focusing on hedge fund investments that was launched in 2006 by two veterans of JPMorgan. The firm’s co-founders draw on their deep capital markets backgrounds and over 20 years of hedge fund investing experience to assist individuals and institutions in building investment portfolios with attractive risk/return profiles. These expert services are provided to a range of institutional clients including pensions, foundations and endowments. Kelly discusses how the firm supports these clients by offering them solutions which meet their needs. “From the very beginning we knew that hedge funds were only one part of most portfolios, and that the rest of the portfolio is probably in place before we get involved. As such we have always believed in providing tailored hedge fund solutions to investors. To achieve this, we offer co-mingled products, single investor products, and advisory services that range from total completion strategies to ala carte services like manager due diligence. We are well known and well connected in the industry and have access to the best and brightest minds in our underlying managers; but we also attend industry, fund, and client focused events in order to keep our finger on the pulse of what is happening. “This tailored approach is a central part of our mission: to be a good partner to our clients, underlying funds, and employees while providing the best possible hedge fund investment services.”
Operating within such a competitive market, differentiation is of vital importance, and as such Pluscios works hard to set itself apart by providing innovative services that cannot be found elsewhere, as Kelly outlines. “We feel that we differentiate ourselves from our competitors by combining the best qualities of a boutique, customer-focused organization with institutional expertise and process. We focus on risk adjusted performance, not gathering assets. This is achieved by consistently applying an active, forward looking investment process using portfolio construction to move the portfolio towards opportunities or away from threats. We also use smaller, emerging and focused managers to diversify across investments the biggest hedge funds do not look to and to access talent that thinks and trades in a unique way.” Looking ahead, Kelly is optimistic for an exciting future for both her firm and the wider investment industry. “Overall, we have always believed strongly in including emerging and diverse managers in our portfolios, it makes solid investment sense. Unfortunately, in the current environment it is even more difficult for those types of managers to attract institutional investors. We always check for diverse managers when adding exposure to our funds but this is one instance where our size does not allow us to have a huge impact. “As such we currently have two initiatives we are working on in this regard: the first is a direct hedge fund that we have partnered with an emerging/ diverse manager to start. Pluscios provides the infrastructure/operational backbone as the GP and the manager is the sole sub advisor. The hope is that by building a track record and relationships with investors, the subadvisor can one day take over the fund and continue to build a business. In the meantime, we benefit from the returns generated by this outstanding sub advisor. Within the wider investment market, we see institutional investors struggling to incorporate diverse hedge funds into their portfolios so we have been tracking a group of diverse managers for over 4 years now that represent a solid sustainable portfolio and we are actively looking for an institutional investor to seed a fund. We believe that a co-mingled fund further reduces risk to the ultimate investors and can provide more scale to both the managers and the investors.”
Acquisition International - Hedge Fund Awards 2017 39
Best Portfolio Manager - Liechtenstein & Best Alternative UCITS Fund: LLB Alternative Strategy Global
Company: LLB Asset Management AG Name: Bernhard Schmitt, Head Equity & Multi Manager Management Email: Bernhard.email@example.com Web: www.llb.li Address: Staedtle 7, 9490 Vaduz, Principality of Liechtenstein Phone: +423 236 9523
The parent company Liechtensteinische Landesbank AG (LLB) is the most traditional bank in Liechtenstein which supports clients across Europe. We invited Head of Equity and Multi Manager Management Bernhard Schmitt, LLB Asset Management, to tell us more about the bank and the LLB Group investment center opportunities it offers.
Established in 1861, LLB supports retail and corporate banking, private banking, and institutional clients, providing excellent products and services across Liechtenstein, Switzerland, Austria, Germany, Central and Eastern Europe, and the Middle East. Bernhard talks us through the firm’s service offering in more detail and outlines how the investment centre aims to ensure that clients receive the best advice, support and returns possible.
“Overall, refreshing new ideas and inspiring people are what we are looking for all over Europe.” “The investment centre of the LLB Group and a valuable partner for institutional and private clients is the LLB Asset Management AG. We are specialised in asset allocation, security selection, portfolio construction and most notably in hedge fund research and fund of hedge funds management. The LLB Asset Management AG has an outstanding investment competence and offers comprehensive expertise. We offer a wide range of made-to-measure solutions for our clients. Our optimal strategy for every investment will include diversification across and among as many asset classes as possible. Specifically, with regards to our hedge fund offering, diversification means attracting the greatest benefit from different managers, investment styles and techniques. As such, clients around the world will certainly find the right building blocks and special funds for their portfolio among our more than 35 funds. We manage a total fund volume of around CHF five billion.”
40 Acquisition International - Hedge Fund Awards 2017
Creating bespoke investment solutions tailored to meet investors’ needs is at the heart of the firm’s investment strategy, as Bernhard explains. “Together with our clients, we develop their individual hedge fund strategies, offer hedge fund manager as well as hedge fund recommendations and especially manage fund of alternative UCITS funds for the benefit of diversification. This allows our clients to choose from a wide range of alternative investment solutions.” By ensuring that the portfolio is diversified and fully researched, Bernhard believes that the firm is able to offer risk averse investments which do not expose investors to unnecessary volatility. “In order to ensure that risk is limited wherever possible, we look for opportunities in the alternative investment universe without forgetting the risks, we try to identify strengths in investment approaches of external managers and assess their possible weaknesses. Thus, our selection process focuses on five distinguishing factors, summarized as the 5 P’s: Philosophy, People, Process, Portfolio and Performance.” “Performance and its volatility is a logical consequence of the other four and a mere result, not our main focus. We try to understand how alternative managers think, how they execute and how they handle their risks. We define our core strength in finding process-driven yet very creative fund managers that are able to perform and also protect their downside. With a further layer of discretion on the portfolio management level of the fund of alternative UCITS funds, we are also able to give the investor the protection it needs.”
LLB Asset Management
Looking ahead, Bernhard outlines the challenges the market faces and how LLB intends to adapt around these. “Our research shows that it is very important that the alternative UCITS fund universe continues to grow by assets under management and numbers of managed funds. This is all the more important to us, because we focus on the alternative UCITS universe in principle. More surely, there is some headwind for the hedge fund industry on the side of performance, fees and costs. However, we are convinced that such a dynamic asset management business as the hedge fund industry will adapt to the changing client needs. Therefore, our selection opportunities should remain in the hedge fund research.” “Overall, refreshing new ideas and inspiring people are what we are looking for all over Europe. This is the essence of what we want to have in our fund of alternative funds strategy. Ranging from brilliant strategists with an exceptional Global Macro expertise over mathematicians with highly specialised modelling skills for CTA strategies we find stock pickers with both reliable gut feeling and top notch analytical skills. The true core when it comes to being successful is so simple: always be receptive and curious, by that, future developments will be spotted early and executed quickly into a position in the portfolio. Being too early with investments in these very experienced and creative external fund managers comes naturally from times to times and would not be a problem for us - being late on the contrary definitely would be.” “From our point of view, comprehensive client focus, creative solutions, and excellent services are our most important characteristics in our daily business. Wherever our clients are in the world, we take care of their needs. With our promise ‘Tradition meets Innovation’, we think that we are rich in tradition yet modern, very experienced with a fresh way of thinking, stable and profitable together.” “Fundamentally, we see the future challenges for our market as being threefold: increased regulation, a focus on transparency and a move towards institutionalization. With the implementation of new regulations such as UCITS V, AIFMD etc. the industry is on a continuous path of rising regulation to the benefit of the investors. Transparency has become one of the most important points of hedge funds and is one of main driving forces in the alternative UCITS world. Clients are increasingly demanding an institutional asset management set-up. Our response to these challenges is a comprehensive transparency of the funds for our clients, the highest regulation standard with UCITS for our fund of alternative funds and last but not least our very institutional approach in asset management to deliver the greatest value for our private and institutional clients.”
Acquisition International - Hedge Fund Awards 2017 41
Best Mid Cap Investment Firm - Nordic Region & Best L/S Equity Hedge Fund (3 Years): Origo Quest 1 Company: Origo Capital Name: Anders Nilsson Email: anders.nilsson@ origocapital.se Web: www.origocapital.se Address: Birger Jarlsgatan 18, 114 34 Stockholm, Sweden
Origo Capital Origo Capital is an independent investment firm specialised in public small and mid-cap companies. We spoke to Anders Nilsson to learn more. Established in 2011 Origo Capital specialise in investing in Nordic small caps. The firm’s client base consists of institutions, foundations, family offices and well-informed private investors, who invest in the firm’s flagship product, Origo Quest 1, which was launched at the end of January 2013. Anders discusses the fund in more detail and outlines it approach to investing. “The Origo Quest 1 fund is unique within the hedge fund space. A strict focus on Nordic small caps, a concentrated long portfolio (12-15 holdings) is supplemented with short positions aiming to reduce the risk level and to deliver alpha. The fund is suitable for investors who: want a fund that focuses on absolute return, are looking for a fund with limited correlation, want a genuinely active, research-driven fund and have an investment horizon of at least five years.
This approach helps the firm to achieve its overall mission: to be viewed as the number one-choice when it comes to investments in the Nordic small cap-market. “Origo Capitals’ overall approach to risk is that seen over time, as the fund will have a risk level that is below the equity market in general. This is ensured by slowly and step by-step build positions – always guided by the internal investment model. On the short side we work with three different types of positions to reduce the risk: alpha-trades, pair-trades and market trades such as futures on indices.” The fund managers, Stefan Roos and Staffan Östlin, together has more than 50 years of professional experience in the stock market. Mr Roos is a small cap specialist and has received several awards for his fund management. Mr Östlin has a solid equity background as capital goods-analyst, head of equity sales and equity strategist. The analytical strength within the investment team is a guarantee to ensure that the investment process is carried out in the most professional way. This approach helps the firm to achieve its overall mission: to be viewed as the number one-choice when it comes to investments in the Nordic small
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cap-market. It is this core focus which sets both the fund and the firm apart from its competitors, as Anders outlines. “The fund’s long-term, active and engaged ownership and the strict focus on Nordic small caps places us in a very unique niche with few direct competitors. The target of the fund is to deliver a yearly return of 10-15% seen over a five-year period, which will be achieved at a lower risk level than the general market. Both of our core targets have clearly been reached since the inception of the fund.” Focusing on the Nordic region presents many challenges for Origo Capital, as the hedge fund industry in this area is highly competitive, with some 150 different funds based in and/or focusing on the region. The Nordic hedge fund industry is mature, strictly regulated and supervised by the financial authorities. The key problem over the last couple of years has been the general lack of return. For the industry as a whole this is a challenge for the future. However, investors tend not to generalize and constantly search to allocate in outstanding managers. Despite these challenges, Anders believes that the region is the ideal base for Origo Capital as the firm is very well-known and respected within the hedge fund industry in the Nordics. “In the Nordic region we are viewed as very transparent in what we do and this makes it easy to work towards achieving our mission. As we are a specialized in Nordic small caps, the necessity to be geographically close to the companies is of high importance. Often we take an active approach when investing and we aim to have a close dialogue with management and the board of directors - this is simplified by the geographical base of our company in Stockholm, the capital of Sweden.” Moving forward, Anders believes that the firm’s focus on providing quality solutions to a niche market will ensure its continued success. “The market in which we operate, the Nordic small cap market, is to a very large extent not covered by the banks and brokers. Some 75% of the companies in it lack external coverage, which offers Origo Capital a unique chance to make a difference. The analytical strength of the investment team at Origo Capital will hopefully continue to add value by providing high quality internal research.”
Acquisition International - Hedge Fund Awards 2017 43
SRB Capital Management HF170083
Worldwide Capital Strategies: Offering Excellence in Managed Futures Investing Company: Worldwide Capital Strategies, LLC Name: Thomas J Reavis Email: TReavis@wcstrategies.com Web: WorldwideCapitalStrategies.com Address: 15188 Brolio Way, Naples, FL 34110 Phone: (239) 596-8294
SRB Capital Management Worldwide Capital Strategies is a CTA offering managed futures clients a broad array of cutting-edge algorithmic trading strategies backed by the experience of a broker with more than 40 years in the futures industry. We caught up with Founder Thomas J Reavis to find out more.
Worldwide Capital Strategies offers top-performing trend-following systems trading on multiple time horizons. By trading over 23 different commodities, multiple currencies, and the S&P index, the firm’s CTA clients have the ability to achieve true portfolio diversification. Tom outlines the firm’s core focuses and the strategies it employs to achieve these. “At Worldwide Capital Strategies, LLC we are passionate about generating the highest possible risk adjusted returns. An industry leader since inception in terms of compounded ROI, our CTA has shown that high returns is not necessarily synonymous with high risk. We have always operated with a strong risk management bias. Every position is immediately protected by a money management stop loss which averages about 1.7% risk per trade. Our margin to equity ratio is averaging a comfortable 14% and our Sortino Ratio is an impressive 1.46 cumulative.
“Diversification into all sectors of the economy is central to our approach, and as such we currently trade 23 futures contracts. As an emerging CTA, we have the opportunity to catch the big moves that develop frequently in markets that very large CTAs just can’t trade in. We are not predictive. We are reactive. We are agnostic to market direction so we will be short markets just as frequently as we are long. Some of our biggest profits come in markets that no one is paying much attention to or where there is a strong one sided sentiment which ultimately proves to be wrong. The Macro-World Program is trend-following, using multiple time frames and multiple methodologies to generate a smoother equity curve. It is 95% systematic with a 5% discretionary money management overlay.” As Founder and Head Trader, Tom maintains a substantial portion of his own net worth in the CTA, which highlights his confidence in the firm’s strategy. He has over 45 years of experience in the commodities business. Tom was one of only 525 Full Members of the Chicago Mercantile Exchange for over 30 years and has been developing and trading commodity futures systems for family and friends since 1984. Fundamentally, he believes that “changes in order flow are often a precursor to large directional changes in the market. My indicators often warn of impending volatility before chartists and pattern recognition programs pick up the change. The Macro-World system is a long volatility strategy, which makes it a wonderful addition to the standard stock and bond portfolio. “Ultimately, while many in the Alternative Investment space offer diversification to the standard stock and bond portfolio, the Macro-World Program, with its very low correlations, allows our clients to build “allweather” portfolios that are more resilient, and have a higher probability of achieving their long-term objectives than traditional portfolios of just stocks, bonds and real estate.”
44 Acquisition International - Hedge Fund Awards 2017
Stats Investment Management HF170015
Best Hedge Fund Boutique - Japan & Best Specialist Japanese Equity Fund (Since Inception): Ginga Service Sector Fund Company: Stats Investment Management Co., Ltd. Name: Masahiko Iwai Email: firstname.lastname@example.org Web: www.stats.co.jp Address: COI Hirakawa-Cho Bldg. 7F, 1-7-20 Hirakawa-Cho, Chiyoda-Ku, Tokyo 102-0093 Japan Phone: +81 3 6658 4361
Stats Investment Management First established in April 2005, Stats Investment Management Co., Ltd. (Stats) is a hedge fund manager based in Japan specialising in managing Japanese Equity Long/Short strategies. COO Masahiko Iwai tell us more about the firm and its award winning flagship product. Stats’ flagship investment product is the Ginga Service Sector (“GSS”) Fund, which is a Cayman unit trust established in June 2006. The strategy itself largely concentrates on the IT and Service sectors as sources of alpha. In addition, it also focuses on medium and small size stocks, which are not widely covered by analysts so that original research by Stats can generate alpha unexploited by the market. The firm’s investment philosophy is based on the conviction that companies that are not widely covered by analysts provide greater opportunities for generating alpha through proprietary research and that liquid markets provide opportunities to exploit inefficiencies in stock pricing. Therefore, concentrating on sectors and companies with experience and knowledge is essential in understanding the businesses and products of your invested companies. These sectors are among the few areas that have the dynamism to dynamically change its business and pursue growth opportunities. As such corporate research is the backbone of Stats’ investment decisions, as Masahiko is keen to highlight. “The fund managers’ company visits are extensive and rigorous; each fund manager visits 400 companies per year, and as a team the total will be more than 1000 companies. Since many information technology companies that Stats invests in operate in Tokyo, our office location provides us with an advantage. “In order to make our long short strategy successful, we believe that the skills to manage risk both at individual stock level and at portfolio level is extremely important. For this purpose, we limit our individual stock exposure to maximum 5% (under normal circumstances 3%). We also employ a paring strategy to avoid excessive tilts in sectors or investment themes. For this purpose, we adopt a proprietary sector allocation to capture the true natures of the businesses of our invested companies.” Stats’ investment management is supported by members with long experience and deep insights. CIO Toru Hashizume is one of Stat’s founding members. He started his career as a sell side analyst with one of the major research institute in Japan and specialized in the IT and Service
sectors for more than eight years. After this starting career, he moved to one of the largest mutual fund companies in Japan and managed its flagship long only Japanese equity fund with 3-billion-dollar asset for more than seven years. He joined Stats in 2006 and started the long short strategy with innovatively new risk management. Working with the CIO is the fund manager Yhu Kuni, who has worked with Toru more than 10 years since inception of the GSS Fund. Masahiko outlines how this experience has culminated in the success the fund currently enjoys. “Fundamentally, the combination of our solid investment philosophy and experienced staff has produced extremely good performance over the past 10 years. With no single negative year, GSS Fund’s flagship Yen share class has recorded an annualized return of 13.86% with an annualized risk of 8.66%, during the period of June 2006 to Oct 2016. This return itself, along with the longevity of our track record, makes Stats stand out above competition. This achievement was highly recognized by various awards in 2016. Currently Stats manages near $250 million in assets under the GSS strategy, and its client base is spread across various regions and various investor types globally.” Based on the data from the firm’s Prime Broker, Japanese Equity Long Short strategies managed by Asian managers returned -2.81% on average, while our GSS Fund returned +3.44% year to date end October. This is yet more proof that the GSS strategy’s risk is well managed and has the capability to overcome even the most difficult market environments. Looking ahead, Masahiko expects the market conditions will start improving after the U.S. election, but since market liquidity is slow to recover, the fund will maintain a cautious approach to the market, by concentrating on the best stocks and managing our portfolio risk diligently. “Stats has recently introduced a new trading system to improve its operational efficiency. This effort is another part of Stats’ efforts to improve its service quality to meet the needs of both existing and potential clients of Stats. Heading towards 2017 and beyond, we will also continue to make its efforts to expand its business base by employing various external resources to support our marketing efforts.”
Acquisition International - Hedge Fund Awards 2017 45
Sterling Financial Group Inc. HF170064
Best Fund Manager 2016 - The Bahamas & Best Mortgage-Backed Fixed Income Fund (5 Years): Sterling Mortgage Income Fund Class A Company: Sterling Financial Group Inc. Name: David Kosoy Email: email@example.com Web: www.sterlinggloballtd.com Address: 81 East Bay Street, Nassau The Bahamas Phone: +1242.677.190
Sterling Sterling Financial Group is a global financial services provider headquartered in Nassau, Bahamas. We profile the group and explore the secrets behind its incredible success.
Sterling Global Financial (Sterling) is a regulated Investment Manager and fully licensed bank under the laws of the Commonwealth of the Bahamas, and operates as a boutique financial advisor covering the real estate debt and equity markets. Sterling is compliant with all regulations by The Central Bank of the Bahamas and meets all international regulatory standards in investment management, banking and trust operations. Sterling concentrates its activities in the Caribbean, North American and lender friendly European countries such as the UK and Ireland, providing mid-market property developers and owners with quick approvals on flexible, short to mid-term financing on residential and commercial properties. Sterling provides investors the opportunity to invest in secure, high yield mortgage investments as well as equity participations.
“the firm offers speed and reliability from loan inception to funding and geographic flexibility allows the fund to compete in markets with less liquidity.” With a combined 140+ years of experience, the management team comprising of David Kosoy (Chairman and CEO), Stephen Tiller (President and COO), Ross Brennan (Managing Director) and Kenue McPhee (CFO) have the depth and knowledge to manage the challenges of an increasingly complicated marketplace and regulatory environment. The principals of Sterling are significant co-investors and accordingly aligned with fund investors. Sterling’s business philosophy has evolved from over five decades of real estate investment and lending by its management team. Its real estate debt fund, formerly the New Providence Income Fund (NPIF) and re-named in 2016 Sterling Mortgage Income Fund (the “Fund”) to more accurately reflect its expanding international role, invests solely in well-conceived loans to reputable property owners and developers. As an asset-based lender, Sterling
46 Acquisition International - Hedge Fund Awards 2017
only originates loans on properties with multiple exit strategies. In 2016, Sterling was granted a full banking license by The Central Bank of The Bahamas and launched Sterling Bank & Trust (Bahamas) Ltd., which will work with the Fund to finance future projects. At the same time, the Fund remains committed to our investors, our greatest responsibility. It is our continuing commitment and objective to offer our investors an investment strategy that delivers consistent returns uncorrelated with the general markets, together with enhanced protection of investment principal. Our aim is to achieve overall returns of between 10 to 15% per annum after management compensation and operating expenses. The portfolio is diverse and is built from individual senior and junior mortgages across bridge; construction and development; and mezzanine financing; together with joint venture equity. Loans advanced by the Fund are for retail, industrial, office, multifamily or other commercial properties as well as single family residential. In some cases, the fund may participate or co-invest with other reputable lenders. Sterling has demonstrated over the years that its lending philosophy is robust as returns continue to be above market with a lower risk profile and no loan write downs. This is achieved by utilizing Sterling’s advantages for the benefit of the Borrower and Investor. These advantages include being one of the few active lenders in the Caribbean with a historical record of success, as well as the firm’s unique knowledge and contacts in the Caribbean allows for more flexibility and thorough due diligence. In addition, the firm offers speed and reliability from loan inception to funding and geographic flexibility allows the fund to compete in markets with less liquidity; Finally, all fees (up-front, standby etc.) are part of the investor return, Sterling does not keep any fees for its own book, which helps better align Sterling with the investors and ultimately offer them the very best possible service.
Allard Partners Limited
Company: Acquire Media Email: firstname.lastname@example.org Web: www.acquiremedia.com Address: 3 Becker Farm Road, Suite 401, Roseland, NJ 07068
Company: Allard Partners Email: email@example.com Web: www.allardpartners.com Address: Suite 3208-3209, 32/F Alexandra House, 18 Chater Road, Central, Hong Kong Phone: +852 2526 9168
Best Hedge Fund Multimedia News Provider 2017
Best Asia Absolute Return Investment Manager & Best Long Only Asian Equities Fund (5 Years): Allard Growth Fund
Reliable. Relevant. Fast. These three words often represent the top requirements for hedge fund clients and our ability to consistently meet and exceed their expectations is why they work with Acquire Media.
Allard Partners is an absolute return investment manager focused solely on Asia. We invited Joanne Moore, Head of Client Relations, to tell us more.
Working primarily with hedge funds engaged in the U.S. equity markets, these firms utilize Acquire Media’s news solutions for two primary functions. Firstly, to drive their risk management operations and secondly, to fuel their trading models in the hunt for alpha. In both of these areas, Acquire Media becomes the vendor of choice for reliability, relevance, and speed.
Established in 1995, Allard Partners is a boutique investment manager focused solely on Asia, with a primary objective to grow its clients’ wealth over the long term. Joanne outlines the firm’s approach in the APAC region and how their dedicated and professional team strives to deliver on the valued trust their clients have placed in them.
Acquire Media boasts an extensive content catalog to meet the diverse needs of our hedge fund clients with a comprehensive list of press releases, financial newswires, rumor wires, regulatory releases, Twitter feeds and more from the industry’s most trusted sources. By selecting the content to meet their needs, clients can then begin to filter the news for the information to drive critical decision-making using While most hedge funds have similar Acquire Media’s exclusive taxonomy. objectives, how they reach them is a unique process. Successful Fundamentally, whilst relevancy hedge funds spend a great deal of and reliability are clearly important time and resources into developing factors in choosing a vendor their strategies and modeling. It these characteristics are useless is important to have a vendor that if the service is not fast. In today’s will take the time to understand the markets, speed is paramount. The complexities of the client’s operations ability plan and execute within and create a solution that can fit into milliseconds or even microseconds their workflow. Acquire Media offers can make all the difference. Acquire flexible formatting and delivery Media operates in real-time with options that can plug and play parallel processing programs that into most environments. Delivery deliver information with value add but methods include robust APIs, secure without impacting speed. Leveraging internet connections, and colocation the latest in network technologies to options within key datacenters while maximize speed whether systems formatting ranges from standard are in the same datacenter or across XML to machine readable formats. In the internet gives Acquire Media the cases where the firm’s standard high marks over its competitors and offerings are not sufficient, we will marks it out as the best possible work with clients to create a custom option for clients. solution. Clients rely on the content technology experts at Acquire Media to consistently deliver.
“Here at Allard Partners, our team, which is based on-the-ground in the Asia Pacific region, uses proprietary research to build a high conviction, benchmark agnostic portfolio of investments in quality businesses at disciplined prices. We co-invest alongside our clients – many of whom are HNWIs or families in Europe, North America and Australia seeking sustainable absolute returns.
Due to a combination of the emerging nature of the markets we invest in and fast development and adoption of new technologies, we are mindful that a long term view cannot be a static one. The challenges and opportunities created by a rapidly changing operating environment and consumer mean that we must continually assess the sustainability of the businesses and industries we invest in and execute accordingly. As a team, we also place strong emphasis on collaboration to leverage the collective knowledge we have accumulated over the 21 years we have been investing in the region. We continue to believe in the long term growth story of developing Asia, remain energized by the challenging work involved and committed to our long-standing and loyal investor base.”
Acquisition International - Hedge Fund Awards 2017 47
Anchin, Block & Anchin
Backbone Asset Management AG
Company: Anchin, Block & Anchin LLP Name: Jeffrey I. Rosenthal Email: Jeffrey.rosenthal@ anchin.com Web: www.anchin.com Address: 1375 Broadway, New York, NY 10018 Phone: 212-840-3456
Company: Backbone Asset Management Name: Declan O’Brien Email: firstname.lastname@example.org Address: 28 Upper Pembroke Street, Dublin, Ireland
Best Hedge Fund Advisory Firm 2017 - North America
Best Emerging Fixed Income FoHF: The Boring Fund SP
Anchin, Block & Anchin
Backbone Asset Management AG
Anchin Block & Anchin LLP provides privately-held businesses and high net worth individuals with a wide range of traditional and non-traditional advisory services. We caught up with Partner Jeffrey Rosenthal to learn more about the firm and the range of services it offers.
Backbone Asset Management is a niche Alternative Asset Management Company that allocates to Private Debt Strategies. We invited Partner Declan O’Brien to tell us more.
Founded in 1923 in New York, Anchin is now recognized as a top-tier firm nationwide in terms of its quality, management, scope of services and work environment. Jeffrey outlines how the firm draws on this vast experience to provide the very best quality services to its clients.
Established in 2015, Backbone Asset Management is an Independent Irish run and owned business targeting Pension Funds, Insurance Companies, Institutional Asset Managers, Family Offices and Wealth Management advisors as clients. By being a specialist Asset Manager and not a generalist the firm are able to focus purely on the Debt Sector. This market requires strong, proactive management, as Declan is keen to emphasise.
and ever-growing amount of Hedge Funds are now looking to Ireland. With the introduction of the ICAV (Irish Collective Asset-Management Vehicle) structure in 2015 this has created a very favourable structure for funds wanting to re-domicile to Ireland. The ICAV structure has already attracted a meaningful amount Assets in its short existence. In addition, the region has a strong, well educated workforce, as Declan explains.
“At Backbone Asset Management we spend a considerable amount of time engaging with the underling businesses we are invested in as well as conducting ongoing DD of new opportunities in our sector this is all done whilst conducting independent industry research and to this extent we have recently expanded our research and Management team for 2017. We also make sure our staff attends all the relevant industry related conferences that cover topics and information we believe would add value to our business and clients.”
“The Irish workforce is highly educated and the infrastructure is of the highest standard. In light of Brexit we believe it will become an ever-increasing destination for Hedge Funds to re domicile and for more industry personnel to base themselves there making it an ideal destination to base ourselves.”
Overall, this past year has been a challenging time for start-ups, especially with respect to raising capital, however Anchin have seen a growing trend in family offices establishing funds and investing on their own and in emerging managers, as well as a growth in the Private Equity sector as a whole. As “For more than 40 years, Anchin such the firm’s focus will be firmly has offered customized accounting, on growing this area of the business audit, tax and consulting services to going forward, as Jeffrey concludes. our financial industry clientele. They range from small, entrepreneurial “Here at Anchin we have seen start-ups to established funds. significant growth in the Private Financial Services is one of Anchin’s Equity sector and with real estate largest industry practice groups, with funds and have thus expanded a team of eight partners and nearly 50 Anchin’s Private Equity Practice. Our dedicated professionals. Our years Firm’s experts and thought leaders of experience, extensive network, in the Private Equity space give us and comprehensive institutional another avenue in which to assist knowledge allow us to offer clients our Financial Services clients. perspectives and insights on the direction of their businesses. “With over 90 years of experience serving middle market companies, “As we consider ourselves to be the Anchin specializes in responding to alternative to the large firms, Anchin the individual needs of private equity prides itself on customized service firms and portfolio companies. Our executed to meet the unique needs of team of experienced professionals each client. Our engagement partners provides in-depth industry knowledge are thoroughly familiar with the client´s while recognizing that each business, the market environment in transaction is unique. Our expertise which they operate, and the unique in platform and roll-up investment features of its industry. By carefully strategies, financial and tax due selecting engagement teams to diligence, business valuations, and cater specifically to each client´s IPO readiness are just a few of the needs, we can conduct efficient and Private Equity services available to cost-effective audits, design and our clients, and our team has the implement optimal tax positions, pertinent skills and expertise to help and provide valuable consulting our clients succeed.” assistance to management.”
48 Acquisition International - Hedge Fund Awards 2017
Ultimately Backbone Asset Management is a very dynamic new and exciting Alternative Asset Management Company, looking to position itself as the world’s leading Debt Focused Asset Manager. As Operating in Ireland provides such its ongoing focus will remain Backbone Asset Management with on growth and expansion, as Declan a number of great opportunities, as concludes. the countryis the largest domicile for Hedge Funds in Europe and over “Overall the future for our firm is 40% of Global Hedge Funds are very exciting as we are expanding serviced in Ireland accounting for our Team and looking to add more over $2 trillion of Assets. As global strategies to our platform as the regulation and tax laws change business evolves.”
Bellecapital Partners AG
Castle Hall Alternatives
Company: Bellecapital Partners AG Email: BCPartners@ bellecapital.ch Web: www.bellecapital.ch Address: Limmatquai 1, 8001 Zurich, Switzerland Phone: +41 44 250 87 87
Company: Castle Hall Alternatives Email: info@ castlehallalternatives.com Web: www.castlehallaltneratives.com
Best Asia-Focussed Investment Manager - Switzerland & Best Asian Equity Fund (5 Years): Galileo Asia Fund
Bellecapital Partners AG Bellecapital Partners (BCP) is the asset management arm of Bellecapital group, one of the largest independent Swiss asset managers with offices in Zurich and London. We invited Christian Kuersteiner, Head of Distribution at BCP, to tell us more. BCP is a pioneer in alternative investments, commodities and Asia, regulated by the Swiss Financial Market Supervisory Authority (FINMA). The firm supports a range of clients including pension funds, insurance companies, banks, independent asset managers and family offices. Christian is keen to highlight the firm’s focus and how it aims to offer a superior service by drawing on its expertise and knowledge.
strategy, process and style and serve their overt and latent needs. In addition, the firm aims to be fully transparent on strategy, investments and costs. Looking to the future, this focus on achieving client satisfaction will remain the core focus. Christian concludes that he is optimistic about the future, both of the market and BCP itself.
“Institutional investors are becoming bored of the mantra of pure passive investments and are seeing more and more the merits of active investing in areas where it absolutely makes sense, among them Asia. Additionally, the underweight in asset classes such as commodities, hedge funds and emerging markets “The common denominator is active is questioned with many clients management. For all these asset indicating that they are looking to classes active management makes a add to them in the near future.” lot of sense as it allows us to benefit from available market inefficiencies “These developments present BCP and invest in the most promising with a number of exciting opportunities. companies, strategies, styles or In order to be able to take advantage commodities. If necessary, this of these our firm is also looking to also allows us to decisively reduce expand, and we are currently in portfolio risk so to generate an discussions with other managers with attractive risk-adjusted performance.” successful track records in the areas we operate, with a view to inviting Alongside risk management, client them to join our firm. This will add to service is also central to the firm’s the investment synergies and enhance success. As such BCP aims to our offering in Asia, commodities and understand their clients’ investment alternative investments.” “Alternative investments historically exhibited low correlation to equity and bond returns and are therefore ideal for portfolio diversification. Asia remains particularly interesting for the strategically thinking investor thanks to its superior growth perspectives.”
Best Global Operational Due Diligence Firm 2017
Castle Hall Castle Hall Alternatives helps investors build comprehensive due diligence programs across hedge fund, private equity and long only portfolios. Built upon Castle Hall’s next generation, online diligence architecture, DueDiligenceProfessional™, the firm helps institutions, fund of funds, advisors, endowments and family offices evaluate whether asset managers meet operational best practice. Around the world, institutional and private allocators, and their advisors, face competing challenges of meeting investment objectives within a sensible governance, risk and compliance framework, while delivering those results in a fiscally responsible manner.
expanding functionality, reporting and analytical capabilities. This initiative has produced the awardwinning DueDiligenceProfessional™ platform. In addition, this initiative has facilitated a fundamental change to the way in which the firm’s services are completed and documented, leading to a process that is industry As such Castle Hall Alternatives leading and Patent Pending. helps investors build comprehensive due diligence programs across hedge The DueDiligenceProfessional™ fund, private equity, infrastructure, platform is a risk management tool real estate and long only portfolios. that offers tremendous gains in work flow efficiency and effectiveness Conducting approximately 400 for clients. The platform captures diligence reviews annually, in addition diligence data consistently and to monitoring hundreds of funds conveniently, identifying risk flags on an ongoing basis, allows Castle across a matrix of risk categories, Hall to assess practices across a ultimately allowing clients to find broad scope of asset classes and information and risks quickly so they thereby identify evolving operational can spend the majority of their time best practice trends in the asset addressing risks and concerns, rather management industry. In addition, than gathering and processing data Castle Hall monitors regulatory and to identify material risks or concerns. industry association directives, and developments in Governance, Risk In addition, the platform aggregates and Compliance (GRC) frameworks, risk metrics and flags across a as well as Enrionmental, Social and portfolio at a glance, facilitating more Governance (ESG) criteria as they effective use of time and diligence pertain to investment management resources for those responsible for operational best practice and the due diligence within any organization. expectations or requirements of institutional allocators. Looking ahead, Castle Hall will continue to expand its customized This approach enables the firm to service suite while delivering flexible add value to clients through multiple and comprehensive diligence solutions avenues. The company recently to clients. The firm anticipates completed an extensive FinTech continued expansion in operations, initiative to transform the delivery and will be looking to launch new of its services, enhancing and services and support for the industry.
Acquisition International - Hedge Fund Awards 2017 49
Certeza Asset Management (Macro Vega)
Company: Celvum Capital Name: Ron Keith Email: email@example.com Web: www.celvumcapital.com Address: 301 Battery Street, Suite 200, San Francisco CA, 94111 Phone: (408) 209-6955
Company: Certeza Asset Management Email: firstname.lastname@example.org Web: www.certezafunds.com Address: 1047 South 100 West, Logan, Utah 84321 USA Phone: 435-760-0923
Best Fund for Wealth Accumulation Investing & Most Innovative Hedge Fund Investor of the Year 2017
Celvum Capital Celvum Capital was founded in late 2015 specifically to launch a new type of algorithmic hedge fund. We invited Ron Keith to talk us through how the firm’s fund and its innovative new approach are changing the face of the hedge fund market for the better.
Celvum Capital’s hedge fund product, the Celvum Capital Fund, is based on more than seven years of research and development and represents a unique offering in the hedge fund industry, as Ron is keen to emphasize. “The Celvum Capital Fund is a truly unique product in the Hedge Fund Industry. We know of no other product that couples a foundation of deep, fundamentals based algorithmic stock picking with an overlay of algorithmic technical analysis to modulate fund exposure. Our flagship product is specifically designed for investor seeking wealth accumulation that exhibit a specific risk tolerance. “The fund maintains a total portfolio (longs plus shorts) of more than 700 equities that are chosen by FARE™, our proprietary Fundamental Analysis Ranking Engine. The FARE™ system evaluates more than 3200 stocks monthly and selects the funds baseline portfolio based on complex algorithmic analysis of nearly 50 (and growing) fundamental criteria that have been historically validated for their efficacy in predicting forward stock price appreciation (or depreciation in the case of our shorts).”
to shorts is regularly adjusted algorithmically based on deep statistical analysis of numerous technical indicators historically validated for their ability to indicate shifts in market behavior. Our investors, who are comprised primarily of high net worth individuals and family offices, seek the best, risk adjusted returns available. In the Hedge fund industry, the best way to meet the needs of clients is by understanding those needs and making sure that clients are invested in a product that is well aligned with those needs. Celvum Capital is very selective about its clients’, and is not afraid to turn away investors if their goals would be better served by another product or another firm. Ultimately the firm’s algorithmic approach has been a success thus far, considerably outperforming the S&P 500 and the Credit Suisse Long/Short Equity Hedge Fud Index in its inaugural year. The firm is keen to expand its portfolio of products utilizing its core proprietary technology as Ron explains. “We are in the process of developing several new funds to help us appeal to a wider range of investors. We are excited about the opportunities this will bring and look forward to Although the fund always maintains supporting a wider range of clients a very diversified basket of longs going forward.” and shorts, the weighting of longs
50 Acquisition International - Hedge Fund Awards 2017
Best Volatility Futures Fund (5 Years): Certeza Asset Management (Macro Vega)
Certeza Asset Management Certeza Asset Management is an investment firm founded on the back of Founder Brett Nelson pioneering creation, the Macro Vega programme. We invited Brett to talk us through how the firm has evolved into a dynamic and dedicated investment firm with a commitment to creating strong ROI for investors. Established in 2011, Certeza was founded on the basis of Brett Nelson’s specific familiarity with VIX derivatives. Following a significant increase in VIX market volume, and after a very successful live test phase from July 2010 to Dec 2011, the firm’s flagship Macro Vega program was offered in separately managed accounts to investors in January 2012. Macro Vega is a systematic relative value statistical arbitrage program utilizing exchange listed volatility futures. It is designed to provide investors with exceptional risk adjusted returns, low drawdowns, and virtually zero correlation to any known benchmark or asset class. Brett discusses the programme in more detail and how it shapes the firm’s investment product offering. “Certeza offers two futures managed account programs and a recently launched commodity pool. Our primary niche is in volatility arbitrage, and we are most recognized as specializing in VIX futures and options. Additionally, the Macro Vega program is deliberately traded at a very conservative level with moderate return objectives and very low drawdowns, and is designed to be levered to match the risk profile of the individual investor. This has allowed us to tailor the program to meet the needs of the individual.”
The firm’s initial client base was comprised primarily of high net worth individuals and quickly grew to include family offices and fund-of -funds. With the dramatic growth in popularity of the VIX index, and the fact that Certeza is one of few with nearly seven years of consistently profitable live trading history in the VIX market, the company is now receiving increased interest from various institutions, endowments, fund-of-funds, and investment advisors. In order to cater for the varied needs of these new investors Brett outlines the firm’s enhanced service offering which will help it to continue to provide the very best solutions to meet their requirements. “Due to significant interest in our VIX products from a wide variety of investors, Certeza has just created a new pooled fund offering that combines all the best that we have to offer. This product has been in development for quite some time, and is specifically designed to enhance the best qualities of our existing products while reducing or eliminating several of the limitations. The new fund benefits from advantages in trade selection and execution, more efficient capital utilization, and dramatically increased scalability and we are very excited about this new offering.”
CoastRock Capital Management
Company: CoastRock Capital Management, LP Name: Peter Hamamji Email: phamamji@ coastrockcap.com Web: www.coastrockcap.com Address: 590 Madison Ave, 21st Floor. New York, NY 10022 Phone: 212-920-7404
Company: CohnReznick LLP Name: Jay Levy Email: Jay.Levy@ CohnReznick.com Web: www.cohnreznick.com Address: 1301 Avenue of the Americas, New York, NY 10019 Phone: 646-254-7412
Most Innovative Alternative Asset Manager 2017 - New York & Recognised Leaders in Risk Budgeting 2017 - New York
CoastRock Capital Management CoastRock Capital Management, L.P. is an alternative asset management firm based in New York. Founder and Managing Partner Peter Hamamji talks us through the firm and its range of investment products. Founded in 2015, CoastRock is a largely systematic quantitative long/ short equity hedge fund. It employs 5 core models that work in tandem to maximize risk adjusted returns while remaining market neutral throughout varying market conditions. CoastRock actively manages both portfolio and operational risk through its disciplined risk budgeting approach. The fund, which recently completed its first year, was previously only available to a select group of clients. However, Peter is keen to grow the fund and outlines his plans for doing so below. “At CoastRock, we are always brainstorming new ideas, creating new investment models, and refining our existing models and investment processes. Given the nature of our strategy, we are less concerned with the day to day noise in equity markets and more focused on making sure our models can adapt to varying market conditions. “In 2017, we will be opening the fund to new investors and managed accounts. We are actively fundraising and looking forward to the arrival of additional capital. As far as client needs go, we make ourselves readily accessible and emphasize
the manager-client relationship. With many of our current clients, we go above and beyond to offer tailored services and are generally the go-to source for their investment related needs. As we continue to grow, we hope to maintain a close relationship with each of our clients.” The firm’s strategy focuses on leveraging software, data, and quantitative analysis to attempt and predict future price movement of the stock market. Quantitative models are developed in-house and range from optimizations to machinelearning. This strategy has proved to be successful thus far and moving forward, the focus remains firmly on growing the fund and expanding upon its current investment offering to serve a wider range of clients. “Currently we are in the process of expanding our investor base and are actively pursuing growth opportunities. As we continue to optimize our existing models and develop new models, we expect higher returns while maintaining low levels of volatility. Having successfully navigated the volatile market environment experienced this past year, we look forward to 2017.”
Best Hedge Fund Accounting Firm - USA
CohnReznick CohnReznick LLP is one of the top accounting, tax, and advisory firms in the United States, combining the deep resources of a national firm with the hands-on, agile approach that today’s dynamic business environment demands. The professionals within CohnReznick’s Financial Services Industry Practice service approximately 400 funds at all stages – from start-ups to multi-fund managers – as well as domestic and offshore funds (including Cayman Islands domiciled funds). The Firm also has experience in all types of investment portfolios. We invited Jay Levy, Partner and Leader of the Firm’s Financial Services Industry Practice, to tell us more about CohnReznick’s work in the industry. “As the hedge fund industry continues to face regulatory challenges, increased investor scrutiny, investment competition, and rapid advancements in technology, there is a constant need for accurate metrics, experienced guidance on controls and best practice procedures, and reliable assistance with compliance. We are actively attuned to the trends and challenges affecting the industry so that we can adapt and tailor our service offerings to meet the needs of our clients. We perform annual audits of financial statements in accordance with reporting under both GAAP and IFRS; provide consultation of partnership agreements, private placement memoranda, and other offering documents; and surprise examinations to comply with Rule 2064(2) under the Investment Advisers Act of 1940 for Registered Investment Advisors. We offer both domestic and international tax advisory capabilities, providing clients with insight on fund structuring, tax planning to meet both investor and manager objectives, relevant legislative developments, and guidance on fund operations.
Key differentiators of our Firm include, the depth and breadth of experience, and superior client service provided by our professionals. Our dedicated professionals have many years of experience and immerse themselves in the financial services industry by regularly attending events, networking with key industry influencers, and speaking and writing about timely topics affecting the industry and our clients. This knowledge and activity allows us to be more than just accountants; we work to increase our understanding of critical business drivers, tax issues, and financial reporting matters. CohnReznick is PCAOB registered and inspected, an important criterion for hedge fund advisors, as they need a PCAOB firm for fund audits. Lastly, our partners have a hands-on approach to client service and become a valued resource to our clients as they launch and grow their business. CohnReznick is widely recognized as a knowledgeable and reliable provider of audit and tax services to a broad range of hedge funds. We constantly work to exceed our client’s expectations by providing timely and relevant insight on the constantly changing regulatory landscape, SEC regulations, tax legislation, and emerging trends.”
Acquisition International - Hedge Fund Awards 2017 51
Elara Asset Management
ELYSIUM Investment Advisors
Company: Elara Asset Management Email:email@example.com Web Address:Elaracapital.com
Company: Elysium Investment Advisors LLP Name: Vineet Sachdeva Email: updates@ elysiuminvestment.com Address: 506, The Capital, A Wing, Bandra Kurla Complex, Mumbai 400051 Phone: +91 22 6694 0170
Best Offshore India Dedicated Fund: Elara India Gateway Fund
Best Alternative Asset Manager - India & Best Long Term Absolute Return Fund (Since Inception): Elysium India Fund
Elara Asset Management
ELYSIUM Investment Advisors
Elara PLC is a global boutique investment bank, with 100 employees, London (HQ) with other offices in New York, Mauritius, Dubai, Singapore, Mumbai, and Delhi. We profile the firm and its flagship fund, the Elara India Gateway Fund (EIGF).
Elysium Investment Advisors LLP offers an India dedicated systematic investment strategy which aims to maximise absolute return over the long term at lower risk levels than that of the index. We invited Vineet Sachdeva to tell us more about this innovative investment approach.
Elara PLC and its various subsidiaries offers a wide range of services from investment management through to investment banking.
Elysium was founded in January 2013 by Vineet Sachdeva and Amit Patni. The firm offers both long only and market neutral options to its investors. Both these strategies are one of the best performing in its category with a much lower volatility compared to its peers. Since its inception in 2013, the fund has been growing capital at attractive rates, both on an absolute and a relative basis. The fund has delivered significant annualised returns (in USD) of 21% in the long-only; and 17% in the market neutral book; creating an excess return of 16% and 12% over the benchmark Nifty Index respectively. This was achieved with much lower volatility (risk) of 13% (for the long only) compared to volatility of 16% for the benchmark.
involves identifying stock ideas through proprietary screens, dividing all businesses into three categories of Great, good, average businesses with a different holding period and Through its subsidiary Elara Asset approach for each category. Management, the firm offers the Elara India Gateway fund, which Its investment strategy aims to find runs long only India strategy. It also flaws in the consensus view to be offers managed accounts for large able to identify truly mispriced stocks. clients. Investment Advisor has The investment team undertakes a 5 professionals with 35 years of rigorous analysis of 15 years and 60 investment research experience. quarters financials The investment Investment Advisor team is headed team has a proprietary four stage by Sonaal Kohli who has over 13 process which helps to identify years experience investing in Indian companies with suspect corporate equities. Sonaal worked for 7 years governance practices, which the firm at Indea Capital, a India dedicated believe is the biggest challenge to hedge fund (AUM ~USD 1 Billion) investing successfully in Indian and where he was heading the India office other emerging markets. and was the senior most investment professional after the founder Ultimately, India is one of the fastest growing large economies in the world The fund invests in a much more with half of the population below 25 concentrated portfolio of 10-20 years of age. Interest rates in India mispriced stocks to generate have been decreasing as compared absolute returns. Unlike other India to other parts of the world where we funds it aims to make asymmetric are witnessing higher interest rates. investments and holds cash in case It has a relatively stable currency the investment team is unable to find as the two largest items of imports absolute return ideas which deem are gold and oil. Further since to have favourable risk reward. independence, it has one of the The fund is more focused towards most business friendly governments, midcaps to generate alpha which has been trying to increase the ease of doing business in India and In addition, the fund is value increasing tax compliance. All these oriented, taking a proprietary conditions make it ripe to have a long 360-degree approach seeking to term bull market over next 10 years, reduce risks and aims to avoid value and as such EIGF, will be seeking to traps. The investment process capitalise on this moving forward.
52 Acquisition International - Hedge Fund Awards 2017
“For international investors looking to invest in the Indian equity markets, using a factor based systematic investment strategy is the best option and Elysium is the only choice on offer. Our primary investment objective is to generate long-term capital growth and absolute returns from a portfolio of equities, index futures and options. We believe that the secular growth story in India is one of the strong investment themes globally and we seek to capitalize on this opportunity.”
At a GDP growth rate of over 7%, India is amongst the fastest growing economies in the world. Vineet concludes by outlining the reasons why the country will continue to build upon its success moving forward and how his firm intends to capitalise Co-Founder and CEO Vineet on the opportunities this growth will oversees Elysium’s investment provide. strategy, portfolio management and risk management. He brings “Currently India enjoys favourable nearly two decades of investment economic conditions with several management and financial services factors contributing to its rise; experience. amongst these, a controlled current account deficit, lower oil prices, low He has a strong background in inflation and increased government investing with several years of spending on infrastructure projects. experience in investing in the Indian We believe that these factors lead markets. He discusses how his to above average returns to the firm has differentiated itself from its discerning investor and are cause for competitors and marked itself as the institutions to increase allocations to best possible option for investors the India story.” seeking to move into India’s emerging investment market.
Florin Court Capital
Finlabo Sicav Web: www.finlabosicav.com Address: 42, Rue de la Vallée, L-2661- Luxembourg. Phone: +352 27 726 100 Finlabo SIM Web: www.finlabo.com Address: Corso Persiani, 45. 62019- Recanati. Italy. Phone: +39 071 7575053 E-mail: firstname.lastname@example.org
Company: Florin Court Capital Address: 31 Maddox Street, London W1S 2PB Email: email@example.com Web: www.florincourt.com
Best Italian Hedge Fund Manager & Most Consistent Long/Short Equity Europe Fund: Finlabo Dynamic Equity
Best for Quantitative Macro Asset Management - UK & Most Innovative Systematic Macro Fund (1 Year): Florin Court Capital Fund
Florin Court Capital
AI has awarded Finlabo for the second year on a row, for its contribution to the Hedge Fund Industry and for the consistent performance of its flagship fund. The main success factor of Finlabo’s investment strategies are the quantitative models that the investment manager, Finlabo Sim, has developed in-house for assisting the asset allocation process. We invited Alessandro Guzzini, Co-founder and CEO of the firm to tell us more.
Florin Court Capital brings together experienced talent in research, trading and operations to produce an innovative multi-strategy systematic macro fund. Head of Product Management Matthew Stevenson outlines the firm’s strategies and how these have helped it to achieve the success it enjoys today.
Finlabo Investments Sicav was one of the first UCITS launched in Europe and now has more than 10 years’ experience offering to private and institutional clients a set of sophisticated investment strategies that are able to provide, in spite of market conditions, consistent and positive performance over time, while maintaining relatively low levels of volatility.
performing both hedge fund indexes and equity markets and maintaining relatively low levels of volatility, the fund has accumulated 79.3% returns since inception and registers an average annual return of 8.4% for the last 5-years period.
The flagship fund of Finlabo is distributed across six European countries (UK, Luxembourg, Switzerland, Italy, Spain and France) On the lead its co-founders, and is currently listed on the ETF’s Alessandro Guzzini (CEO) and category of Milano Stock Exchange. Anselmo Pallotta (Director), the firm has developed a set of innovative The current customer portfolio of quantitative models and software the firm covers banks, foundations, that drives the investment process, asset management firms, pension allowing performance maximization funds and family offices, between while minimizing risks. Those other institutional investors willing models are the result of extensive to improve the risk/reward ratio of financial research and are indeed their portfolios through high-alpha the main success factor of Finlabo’s generation funds. investment strategies. Alessandro talks us through how the firm provide The firm’s focus remains firmly on to clients the best possible returns: building upon its current success, as Alessandro Guzzini explains in his “Our objective is creating value concluding comments, “We think our through highly active portfolio investment strategies are capable management. Through Finlabo to continue to generate outstanding Investments Sicav, we manage results. At the same time, we are and distribute four different funds, working hard for enhancing our including our flagship fund, the distribution channels across Europe. Finlabo Dynamic Equity. The latter, Consequently, we believe that has gained strong recognition as one our recognition and assets under of the top performers of its category management will continue to grow at (Long/Short Equity Europe). Over a very good pace”.
Adopting a systematic approach, Florin Court employs strategies to take advantage of many kinds of market opportunities – not just momentum. Without institutional baggage or competing internal products, Florin Court Capital Fund was created to be the primary systematic programme in an investor’s portfolio.
“Fundamentally, in a world of political uncertainty and rising yields, Florin Court’s systematic approach – as well as lower reliance on fixed income carry – ensures a competitive advantage if long-biased systematic strategies no longer produce the returns of the past decades.”
Overall it is the firm’s expert team who will guide it to continued Started in 2015, its flagship fund success, as Matthew is keen to utilises insights from the worlds emphasise. of managed futures, statistical arbitrage and macro trading to “Looking to the future, continuous produce uncorrelated returns development of the programme to both long-only asset classes comes from the research team, and to conventional momentum headed by Doug Greenig (CIO), programmes. Matthew explains Dave Dension (Deputy CIO) and how the fund’s innovative approach Stephane Fischhoff (Head of helps to set the firm apart from its Research). The team is a lean competitors. group of experienced researchers and developers, with decades of “One of Florin Court’s competitive experience across multiple strategy advantages is market diversification. types and markets.There is a deep Our portfolio of >300 markets commitment to ongoing research enables the fund to capitalise on innovation and excellence in all trends and other factors away from aspects of the programme.” the standard developed markets. As a limited capacity fund, we allocate as much to exotic markets such as power as we do to more conventional markets such as bond futures. The fund trades markets from the British Pound to Egyptian Pound; crude oil to coal; US Treasury bonds to Colombian interest rate swaps.
Acquisition International - Hedge Fund Awards 2017 53
Hyperion Capital Advisors
Company: Hyperion Capital Advisors, LLC Name: Christopher Sullivan AWMA, CRPC, CMT Email: firstname.lastname@example.org Web: www.hyperioncp.com Address: 270 W New England Ave Winter Park, Fl 32789 Phone: 407-935-1040
Company: INOKS Capital SA Name: Nabil Marc Abdul-Massih, CEO Email: email@example.com Web: www.inokscapital.com Address: Rue de l’Athénée 32, 1206 Geneva, Switzerland Phone: +41 (0)22 718 7410
Best Asset Management Boutique - Florida & Recognised Leader in Systematic Strategies - USA
Hyperion Capital Advisors Hyperion Capital Advisors, LLC is a quantitative based investment manager supporting high-net worth individuals, family offices, and small institutions. We caught up with Christopher Sullivan to find out more. Founded in 2013, Hyperion provides investors with empiricalbased investment solutions combining technology and machine intelligence with human awareness and oversight. This innovative approach allows investors access to competitive equity returns with reduced risk and volatility of the broader equity indices, as well as long term capital appreciation via the compounding of high probability, short duration trades. Christopher talks us through the firm’s flagship fund and how this helps clients to achieve strong return on investment. “Our flagship product, Helios Fund, is a multi-strategy systematic quantitative long/short equity fund. The strategies include unique proprietary methodology in trend following, mean reversion, and momentum; our approach to managing risk includes a disciplined and defined process, dynamic position sizing, cognitive selfevolving stop losses, and static model max loss stop losses of 10%. Our primary goal is to be good stewards of our clients’ capital, and with that being said, we focus on strategies that help our clients ‘Stay Rich.’”
Within the hedge fund market currently there are a number of developments facing firms such as Hyperion, but, as Christopher emphases, the firm remains focused on generating strong ROI for its investors. “As an emerging manager, we are singularly focused on the success of our client’s capital and our firm. Within the hedge fund industry as a whole, you have seen a massive exodus away from active or conviction based management, many hedge fund closings, and movement toward indexing. I cannot stress enough that we believe diversification is crucial to a portfolio’s success, and that allocations ought to reflect balance against the many macro-prudential risks that are in the market place. Strategy diversification is the primary way we add value to clients’ equity portfolios, and is our core focus throughout the portfolio.” Looking ahead, Christopher is excited about what the future holds as the firm seeks to expand upon its current investment offering. “Currently we are evolving components of our momentum based model, and are preparing to launch another fund in order to build on our current achievements and expand as a firm.”
54 Acquisition International - Hedge Fund Awards 2017
Most Innovative Investment Manager - Switzerland
INOKS Capital INOKS Capital is a FINMA-licensed, independent asset manager headquartered in Geneva, Switzerland. We caught up with Nabil Marc Abdul-Massih, CEO, to learn more. Since launching in 2004, INOKS Capital has focused on supporting sustainable growth in emerging markets by designing impactful and innovative investment solutions. The investment vehicles managed by INOKS actively provide capital solutions to value-added participants of global commodity value chains. Nabil outlines the firm’s strategy in more detail, revealing how it aims to provide the best possible returns for investors through its unique approach.
a diversified mix of commodities and geographies. This unique approach generates above average returns with low volatilities, making it an attractive investment that is uncorrelated to traditional asset classes.”
Ultimately Nabil is keen to emphasise the firm’s continued dedication to targeting companies which have limited access to capital markets and help them to grow and expand organically in a way which “INOKS’s flagship strategy provides meets their needs and ensures their short-term solutions (less than continued survival. one year) for corporates requiring working capital. It is accessible to “Our principal goal is not to speculate qualified investors via two collective on commodity prices but to support entities: Ancile Fund (Cayman) the organic growth of commodity Ltd, launched in August 2006, and value chain businesses, whilst Ancile (Luxembourg) SICAV-SIF, generating positive local impacts launched in September 2012. Both through strict ESG/SRI investment funds co-invest in the same portfolio criteria. Ancile’s beneficiaries are of Commodity Structured Trade producers, merchants, transformers Finance (CSTF) transactions, and or distributors of commodities active offer quarterly liquidity to investors. in emerging markets. To be eligible for funding their activity must be “Overall, Ancile’s objective is short-term and self-liquidating in to generate sustainable, above nature, whilst their P&L must also average returns for investors by be non-speculative: we support investing globally in commodity and profits that are generated through trade based transactions to grant value addition in the commodity structured and secured funding to chain, not dependent on commodity producers, consumers and other price volatilities. Continuing with commodity value chain participants. this approach and building upon Ancile seeks to achieve capital our successful year in terms of appreciation whilst preserving capital fundraising will be our ongoing focus and mitigating risks, by targeting moving forward.”
Company: JBS Investments Address: Level 36, 71 Eagle Street, Brisbane QLD 4000, Australia Phone: +61 2 8035 0036 Email: firstname.lastname@example.org Web: www.jbsinvestments.com
Company: Libero Devt Fund Name: Iain Cahill CIO and Mary Murphy COO Email: email@example.com, firstname.lastname@example.org Web: www.liberofunds.com Address: 33-37 Athol Street, Douglas, Isle of Man, IM1 1LB
Best International Equities Fund Manager - Australia
Best New Absolute Returns Fund: Libero Development Fund
JBS Investments is a leading globally focused fund management company based in Australia that pursues a research-driven investment strategy based on fundamental value. We profile the firm and explore the range of services it offers.
Libero Funds was developed through a combination of over 50 years’ experience in Alternative Assets Services, Funds and Financial Services and a deep frustration with poorly performing market correlated investment strategies. We profile the firm, providing a fascinating insight into the history and future of this innovative company.
JBS Investments offers a versatile approach which has been successful applied across industries and countries. The process revolves around investing capital in listed businesses that are misunderstood and where the firm can ascertain the reason for the market’s mispricing, often in investment themes that are played out over years.
through investing in companies or countries that are in transition and are misunderstood as a result. This may be due to either a corporate event (such as a recapitalisation, restructure, merger, divestment or bankruptcy), complexity, appearance of conflict of interest issues, accounting that does not reflect the underlying economics of the business or a wider event of some This is unique because whilst many kind (be it industry, environmental, investors start by locating a security economic or currency-related). that appears to be trading cheaply (usually by the use of statistical The heightened uncertainty that screening methods) and then comes with such situations leads to working backwards to try to establish a scarcity of capital as investors are why it is trading cheaply, such a reluctant to act due to the lack of easy method tells them that a security is to follow investment metrics. Although cheap, but not why. capital markets tend towards efficiency over the long term with the value of In order to mitigate risk and ensure securities determined by fundamental strong return on investment for clients, factors, temporary pricing inefficiencies JBS Investment prefer to start their often arise in such situations. This may search in areas of the market where be due to sentimental, technical and it expects to find securities that liquidity factors. As a result, investing are misunderstood. Once the firm during such periods of transition can have established that a security is generate attractive risk-adjusted misunderstood it conducts an in-depth returns for diligent investors focused analysis to determine if the security is on intrinsic value. trading cheaply. A result of this process is that the company tend to undercover These benefits highlight the success unique investment opportunities that of JBS Investment’s approach, do not show up on statistical screens. and moving forward the firm will continue to focus on this, adapting Overall, a key competitive and developing the strategy in order advantage of JBS Investments is the to remain at the forefront of industry expertise that the firm has developed development.
In 2012, Mary Murphy (Former Executive Managing Director of IFS) and Iain Cahill decided to create an investment strategy which is low risk with low volatility but generates strong returns in all market conditions. Some might define this as being the case for any Absolute Return Fund, however with the additional attribute of significant capital risk mitigation and a 2016 year to date net return over 9%, Libero Development Fund is clearly an award winning investment product. The Libero Development Fund’s investment strategy is designed to achieve consistently positive returns with low risk and low volatility. Based on the fund structure and key risk management policies, and agreed with the Auditors, the Fund only recognises income earned. By not recognising unrealised gains the monthly NAVs reflect actual income earned by the Fund.
strong capital growth or income, Libero is dedicated to listening to investor requirements and working with experts in all aspects of the funds operation. Where the firm work with large (institutional) investors, the Funds can be tailored to manage for liquidity and investment timeframes and other bespoke requirements. Overall Libero aims to see Libero Development Fund become a true benchmark fund within the Absolute Return Funds sector. In order to achieve this the firm will implement the Libero Development Fund strategy and deliver additional Fund strategies recognising international investor demand. This aim, alongside the firm’s growing track record and AUM, together with several third parties very keen to joint venture means that ultimately, 2017 looks set to be an exciting year for the firm- and investors should definitely keep an eye out for new developments.
As a whole Libero offers a flexible framework with several funds for experienced investors. Supporting investors including Family Offices, Fund of Funds and Sophisticated Investors who are seeking a real alternative investment to cash or cash equivalent low risk strategies while at the same time seeking
Acquisition International - Hedge Fund Awards 2017 55
2014 Copperstone Capital. All rights reserved.
Copperstone Capital is an investment management firm founded in 2009 with offices in Moscow, Russia and London, United Kingdom. We manage wealth for high net worth individuals and institutions through various hedge fund strategies. 16 Sadovnicheskaya Street, Moscow, 115035, Russia T +7 495 988 0010 F +7 495 951 1410 www.copperstonecapital.com
HEDGEfund awards2015 Best Russian Fund (Since Inception)
STRATEGIC LASTING INDEPENDENT
Meliora Capital SA
Mori Capital Management
MELIORA CAPITAL Company: Meliora Capital SA Phone: +41 21 550 12 69 E-mail: email@example.com Web: https://melioracapital.ch/
Company: Mori Capital Mgmt Address: Regent House, Office 35, Bisazza Street, Sliema, SLM 1640, Malta Phone: +356 2033 0110 Fax: +356 27 480 008 Email: firstname.lastname@example.org Web: www.mori-capital.com
Best for Short-Term Trading Strategies 2017
Meliora Capital SA Meliora Capital is an asset management firm that uses systematic investment strategies to deliver strong riskadjusted absolute returns that are uncorrelated to the other markets and investment strategies. We caught up with CEO Pablo Albrecht to learn more about the firm and this innovative investment strategy. Meliora Capital specialize in shortterm trading strategies on the most liquid listed future markets. The firm’s flagship Commodity Absolute Return program only holds positions throughout the day and has no overnight exposure. Pablo provides more detail on this unique approach, which has recently been re-incorporated into the firm’s strategy due to its previous success. “The Commodity Absolute Return program is available in segregated managed accounts (SMA) and was initially developed by our CIO in 1997. The program was run between 1997 and 2009 with a successful track-record and was re-launched in 2014 as the firm’s flagship strategy. “We are a technology company at heart and automate most of our processes. A task that would require a team of five a decade ago can now be done over-night within a few minutes by a computer. Our complete infrastructure is run in an automated environment, allowing us to spend more time with the clients and provide investment strategies at a lower cost.” The nature of the firm’s investment strategy is in itself a niche approach, and as such Meliora Capital only have a very few competitors and still
benefit from having an uncorrelated performance stream. Looking ahead, Pablo emphasises that despite various challenges in the UK market such as Brexit, the firm has its sights set firmly on achieving a presence in the country. “We are in the process to relocate to London in order to better serve our current client base.”
Best Emerging Market Asset Manager - Malta & Best Emerging Europe Equity Fund (3 Years): Mori Ottoman Fund A EUR
Mori Capital Management Mori Capital Management Ltd is an independent asset management company owned by its management specialising in Emerging European markets. We interviewed Portfolio Manager Aziz Unan to learn more. Mori draws on the vast experience of its founders and investment team, many of whom have been working in the industry for over 20 years. The firm’s two emerging European funds were originally called Griffin Eastern European Fund and Griffin Ottoman Fund whose roots date back as far as 1998. These two funds were carved out and renamed to Mori by Aziz Unan in order to emphasise his over two-decade long experience in the niche markets of emerging Europe. The firm’s consistent bottom-up stock picking with active beta management approach to investing in a niche asset class has attracted a variety of investors, as Aziz outlines. “Here at Mori we have an established investor base which is balanced between retail, institutional and family office investors based predominantly in German speaking countries, many of whom followed us when we broke away from our former parent company and started afresh in 2015. “For these clients we provide an alternative UCITS fund which utilises index derivatives and foreignexchange hedging actively. Our investment style revolves around bottom up stock picking with a macro overlay, whereby we try to select the highest quality, best managed businesses in emerging Europe and
purchase their stocks at a discount to our intrinsic value estimates. Our business model is geared towards the long term but we have a rigorous beta overlay and actively hedge against the region’s currencies in order to ensure that our investors are not exposed to excessive volatility.” Ultimately, Mori is dedicated to operating in this niche investment sector owing to the vast growth potential it identifies there, as Aziz concludes. “Moving forward we remain passionate about investing in emerging European markets because of the various growth prospects we foresee in this region. Many of the emerging European markets have positive demographics with highly underpenetrated sectors in all parts of their economies. Emerging Europe is arguably the least leveraged region as a whole compared to many other regions that are facing a big debt burden. “In addition, with over 50% of the world’ remaining proven oil reserves and three quarters of the global gas resources the region is the world’s energy hub. Thus, geopolitics continues to play a vital role, it also brings many opportunities to obtain mispriced assets.”
Acquisition International - Hedge Fund Awards 2017 57
QUANTUMROCK CAPITAL GmbH
Company: Norron Asset Mgmt Name: Ulf Frykhammar Email: ulf.frykhammar@ norron.com Web: www.norron.com Address: Norron, Oxtorgsgatan 4, SE-111 57 Stockholm, Sweden
Company: Quantumrock Capital GmbH Name: Thomas Lorenzen Email: email@example.com Web: www.quantumrock.de Address: Kronsberg 22, 24161 Altenholz Phone: +49 431 8880541 0 or +49 89 25542191
Best Capital Markets Investment Firm - Nordic Region & Best Long Only Equity Fund (5 Years): Norron Active
Best European FinTech-Asset Manager 2016 & Most Innovative Professional Investment Product - Germany
QUANTUMROCK CAPITAL GmbH
Norron Asset Management is a Nordic investment manager with offices in Stockholm and Oslo. CIO and Managing Partner Ulf Frykhammar provides us with an absorbing overview of the company and the investment opportunities it offers.
Norron manages six different funds, three of which are hedge funds, with a primary focus on the Nordic capital markets. The fund offering consists of both absolute return funds and actively managed equity funds. Ulf discusses the hedge fund offering in more detail, outlining the major benefits of investing in these products. “Here at Norron we offer three hedge fund options. Our funds are divided in to different risk segments (measured as historical volatility). Through this approach we are able to cover volatility brackets from 1% to full equity market volatility. The other way to view our product offering is from our client’s different end needs, or demands, when it comes to investing so that we can meet their needs.
“Finally, we offer the Norron Alpha, which is a market neutral equity fund. The fund is our latest addition, and meets our clients demand for non-correlating returns. The return of the fund is a residual of our alpha generating ability, which is >10% per year during the last five years.” Looking ahead, the firm aims to maintain its current success by working hard to ensure it continues to meet its clients’ needs, as Ulf concludes.
“Moving forward, we will continue to develop both in terms of investment philosophy and product offering. Considering that we are building our brand awareness, both internationally and in our home markets, we feel that we have a great business opportunity to capitalize on “The first of our hedge fund offerings in the years to come.” is the Norron Target Fund, a low volatility and low net multi strategy fund, with more than 12 years tradable NAV track record. Our return CAGR (last 12y) is ~7% with a volatility of approximately 3%. “In addition we also offer the Norron Select Fund, our L/S equity fund that carries roughly 50% of the volatility of the Swedish equity market. Our 5y CAGR has been 11% with a volatility of 7-8 percent.
58 Acquisition International - Hedge Fund Awards 2017
Quantumrock Capital researches and develops software, algorithms and models to create measurable success on financial markets. We invited Thomas Lorenzen to tell us more. Established in 2010, Quantumrock is a BaFin-licensed FinTech-asset management firm which started life managing its own personal funds before diversifying into developing systematic trading systems, which has been its ongoing focus in recent years. Thomas discusses how the firm ensures that it offers the very highest standard of solution to the clients, who are typically successful entrepreneurs but also include major financial institutions. “Since the beginning of 2015 we decided to accept a very restricted circle of external high-net-worth individuals as investors, extending our client base by invitation and reference only. On average we have achieved 15% p.a. return over the last 3.5 years. The correlation of our returns with those of other asset classes over the same period has been very low. We have a team of specialists who contribute their knowledge and experience and constantly monitor the market. We use cutting edge technology and have positioned our servers strategically in datacentres in London, New York and Munich in order to achieve low latency execution.” Moving forward, the firm’s continued focus will remain on developing and expanding its range of solutions
in order to meet client needs, as Thomas concludes. “Here at Quantumrock Capital we are constantly developing new trading strategies and continue to adopt our systems to new markets. All new trading strategies are first tested with our personal funds. Only once we are satisfied with the results we approach our clients. We believe that our focus on proprietary cutting edge trading systems, risk management, absolute returns and regulatory requirements give us a distinct competitive edge over our competition in our region and developing this will remain our ongoing focus as we look to the future.”
Qurium Partners LP
Qurium Capital Company: Qurium Capital, LLC Email: firstname.lastname@example.org Web: www.quriumcapital.com
Company: RoboCap LLP Name: Jonathan C. Cohen – Managing Partner Address: 10 Brick Street, Mayfair, London W1J 7HQ, UK Phone: +44 203 457 1221 Email: email@example.com Web: www.robocapfund.com
Best US Long-Biased Equity Fund: Qurium Partners LP
Best Disruptive Technologies Fund (Since Inception): RoboCap UCITS Fund
Qurium Partners LP
Qurium Capital LLC is a Los Angeles-based asset management firm that provides superior long term riskadjusted returns to institutional and high net worth clients. We invited CEO and CIO Dr. Albert Lu to tell us more.
RoboCap is one of the first actively managed investment funds aimed exclusively at ‘pure-play’ robotics and automation stocks. We invited Fund Manager Jonathan Cohen to talk us through this innovative approach and how it is changing the way clients invest.
Established in 2004, Qurium Capital’s flagship investment product Qurium Partners, L.P. was launched in July 2009. Since inception, the Fund has returned 25.91% on an annualized basis compared to the S&P 500 Index’s return of 15.09%. In addition, downside capture has been exemplary: looking at each month the Index has lost money, the Fund has historically only “captured” 12% of the market’s decline. The Fund is an actively managed, long-biased equity hedge fund that employs statistical finance tools and techniques to invest in large and medium capitalized companies. The Fund’s proprietary algorithms aggregate, organize and analyze real-time and historical data to identify stock purchase candidates and then employs a qualitative overlay in order to maximize the confidence level and minimize the margin of error. Dr. Lu talks us through the firm’s investment strategy for this product and how it aims to provide investors with the best possible returns. “Here at Qurium Capital we provide a long-biased strategy to our clients, and invest in large, liquid common stocks. We use index hedges to mitigate market risk from time to time when our ‘alpha engine’ and market conditions indicate it is prudent to do so. The approach relies on a huge proprietary database of historical
data we have created and expanded over the past many years. We analyze this information utilizing big data tools to identify a small subset of potential buys from a universe of over 2,000 stocks. Unlike the great majority of other equity investment strategies, where greater liquidity means more efficient pricing and less opportunity for excess returns, our stock selection performance actually improves the more a stock trades.” Dr. Lu himself is an expert in the assembly and analysis of Big Data, and as such he drives the firm’s research efforts. “We think we have a unique edge in the market based on data that few others, if any, can access. We have been able to extract patterns from our data that tell us large informed buying is coming into a particular stock which more than likely will result in higher prices.” Overall Dr. Lu concludes by outlining the firm’s plans for the future, which are focused around building upon its current achievements. “Moving forward and achieving the firm’s growth targets is our primary focus, as the firm’s assets under management are expanding quickly owing to increased interest in our innovative strategy. Our key goal is to be recognized as one of the most technically sophisticated quantitative money management firms in U.S.”
Robotics and artificial intelligence are going to disrupt every industry. The direct economic impact of robotics should approximately $10trn by 2025 according to McKinsey & Co . RoboCap believes that the robotics & automation listed equity market should continue to outperform the global market and that it is best positioned to capitalize on this irreversible trend. The fund manager, Jonathan Cohen, believes that “most portfolios are underweighted this important theme that should achieve double digits returns over a cycle” while interest rates are still very low.
RoboCap has been awarded Best Disruptive Technologies Fund (Since Inception) 2017. This prestigious recognition marks RoboCap UCITS Fund as one of the most outstanding performer in its field following a selection process led by industry experts.
The RoboCap UCITS Fund focuses on “pure play” robotics and automation listed stocks globally. Robots are machines controlled by a microprocessor and include: industrial robotics, general automation, surgical robots, exoskeletons, drones, RoboCap is the world’s first fund autonomous vehicles, 3D printing, putting a high level of purity to the key components, enabling software theme at the core of the portfolio and artificial intelligence. construction combined with a rigorous fundamental investment The investment team is based in analysis approach. “We analyse London and consists of seasoned every company by speaking with investment professionals with the management, running our own experience ranging from CIO to valuation models and understanding senior equity analyst in such as the technologies and markets to a industrials. They are supported great extent” says Jonathan. Since by an Advisory Board of leading its launch on the 4th January 2016, robotics experts to better understand the fund had a return of over 14% as the technologies, trends, specific of 25 November 2016, with a lower markets and stay at the forefront of volatility and lower beta than global the changes. “Ultimately, we have equity markets thanks to its “pure found exceptional talents from play” focus and risk management. Imperial College, the Silicon Valley and the robotics industry who are passionate and willing to share their expertise” Jonathan concludes.
Acquisition International - Hedge Fund Awards 2017 59
Rubrics Asset Management Ltd
Sequoia Capital Fund Management LLP
Company: Rubrics Asset Management Limited Name: Marcos Volich Email: Marcos.Volich@ rubricsam.com Web: www.rubricsam.com Address: 23rd Floor, 20 Fenchurch St, London, EC3M 3BY Phone: +44 (0) 207 186 9939
Company: Sequoia Name: Douglas Garistina, CEO and CIO Address: Ground Floor Lincoln House, 137-143 Hammersmith Road, London, W14 0QL, UK Phone: +44 (0) 20 3588 4770 Email: firstname.lastname@example.org Web: www.sequoiacapfm.com
Best Emerging Markets Fixed Income Fund (1 Year): Rubrics Emerging Markets Fixed Income UCITS Fund (A-USD) & Best Boutique Investment Manager 2017 - UK
Best Quantitative Investment Manager 2017 & Best Short-Term Systematic G10 FX Strategy (5 Years): Sequoia Systematic Fund
Rubrics Asset Management Ltd
Sequoia Capital Fund Management LLP
Rubrics Asset Management is an independent, boutique investment manager, specialising in providing innovative fixed income strategies for institutional and private clients. Steven O’Hanlon provides us with an overview of the services the firm provides in this area and how it aims to offer the very best solutions on the market for its clients.
Founded in 2011, Sequoia Capital Fund Management LLP (SCFM) was created as an alternative investment management company specializing in investing via quantitative strategies, which are the result of several years’ research and development of algorithmic trading strategies.
Rubrics Asset Management offers a combination of different alpha generating fixed income based products which, when combined, can satisfy any client risk/return requirement. This is achieved by maintaining only two of the three available fixed income risk types (FX, duration, credit) in any one portfolio. Steven explains how the firm meets the ever evolving needs of its client base, which includes asset managers, fund-of-funds, high net worth individuals, charities and endowments.
helped deliver a lower volatility profile and higher risk adjusted returns than many other long only fixed income funds. This forward thinking approach will help the firm adapt around future challenges, as Steven explains.
“Through ongoing client interaction and the employment of dedicated business and product development resources, Rubrics have the knowledge and capability to satisfy any our clients’ needs efficiently and effectively. More generally, through ongoing interaction with clients and industry bodies, Rubrics maintain an overarching knowledge of industry change. Our knowledge of the changing regulatory landscape towards offshore funds was a key driver towards reorganising all our products as UCITS which are today seen as highly marketable.”
“Should a hard Brexit take place, Rubrics will continue to be based in London though will arrange financial authorisation via Ireland. The domicile of our product range will remain as Ireland.”
The firm follows a robust investment process which has delivered consistent returns for over 10 years. Within this there is a strong emphasis on risk management which has
“Despite the recent Brexit vote, it is our view that London will continue to act as a centre for financial services due to the large skilled labour force along, having a very favourable time zone and the incumbency of the industry.
Looking to the future, Steven emphasises that the company is eager to build upon its current success. “Over recent years Rubrics Asset Management has reorganised its business into a scalable and technologically advanced fixed income asset manager. Moving forward we are keen to use these resources, as well as adding additional investment, risk and client management staff to further enhance our product performance and client servicing.”
60 Acquisition International - Hedge Fund Awards 2017
SCFM pursues a strategic goal to be a trusted provider of highly differentiated, superior risk-adjusted returns to the blue chip institutional investment community. The firm is a research-driven firm focusing its investment process on short-term systematic strategies in highly liquid markets. Its first and current strategy exploits macro signals from interest rates, equities and other factors to identify short-term misalignments between the currencies of the G10. This strategy combines signals from hundreds of independent models using a multivariate factor approach. During the five years since the strategy was first launched, SCFM has made considerable advancements in its models, capabilities and capacity, at the same time growing its AUM to $105m, primarily with institutional assets. As the assets in and revenues from the current strategy grow, SCFM’s wider business plans involve using these additional resources to launch further systematic strategies that it has been developing. The ultimate aim of these plans is to offer its pool of investors a capacity of at least $2B across its suite of strategies. As with the first and current strategy, SCFM
sees its remit in the alternatives space as delivering uncorrelated systematic strategies focused on the short to medium term. With over 9 years working together, the SCFM team has deep experience in algorithm development and has built an array of proprietary tools for developing, testing and trading strategies. Together with its seamless operations servicing its institutional clients, the firm has a strong foundation for this next leg of growth. Looking forward, the team is very excited about the prospects for the current strategy over the medium to long-term as interest rates finally commence their rise and bonds give up the gains they have made over the past several years. Although the strategy has virtually nil correlation to equities, bonds, hedge funds, CTAs and other FX styles (as highlighted in a research briefing released last year), the strategy does tend to show a weak negative correlation to Treasuries and a few other asset indices during left-tail events in these markets. This leads the team to believe the timing is right to push forward on its growth plans to exploit the opportunities forthcoming in the new terrain.
The Castlewood Select Funds, LLC HF170027
Third Friday Total Return Fund HF170004
Third Friday Company: Castlewood Select Funds, LLC Name: Mark Wittenstein Title: Managing Partner Email: email@example.com Web: www.castlewoodfunds.com Address: 20 Nassau St, Suite 124, Princeton, NJ. 08542, USA Phone: 1-215-284-7007
Company: Third Friday Management, LLC Name: Michael E. Lewitt Email: Mlewitt@thirdfriday.com Web: www.thirdfriday.com Address: 515 N. Flagler Drive, Suite 300, West Palm Beach, FL 33401
Best Multi-Strategy Approach 2017 - North America & Best Macro Options Strategies Fund (1 Year): Castlewood Select Opportunity Fund, LP
Best US Option Strategies Hedge Fund (Since Inception): Third Friday Total Return Fund
The Castlewood Select Funds, LLC
Third Friday Total Return Fund
Castlewood Select Funds, LLC is dedicated to systematically building and preserving capital for private clients. We invited Managing Partner Mark Wittenstein to talk us through the firm and its innovative investment strategy.
The Third Friday Total Return Fund, L.P. utilizes a proprietary rules-based options strategy to generate attractive risk-adjusted returns in all market environments. We invited Fund Manager Michael Lewitt to tell us more.
Headquartered in Princeton NJ, Castlewood launched its first offering, The Castlewood Select Opportunity Fund, in October 2014. The fund is a macro, multi-strategy portfolio focussing primarily on the US domestic equity market, as Mark explains.
The Third Friday Total Return Fund focuses on preservation of capital and insuring that positions are properly hedged. Michael outlines the firm’s strategy in more detail, explaining how it ensures secure, measurable and reliable returns.
while simultaneously protecting their wealth, Mark emphasises. “As a completely independent and employee owned organization, we are able to make certain to implement the highest quality investment and client experience with no restrictions. Ultimately the firm is dedicated to providing the “With an aim to generated absolute best practices in the alternative returns for investors, regardless of asset management business.” market conditions, the Castlewood Select Opportunity Fund utilizes a Overall, what sets Castlewood proprietary option strategy to both apart is its focus and client centered deliver returns and manage portfolio approach, as Mark concludes. risk. As an emerging fund, Castlewood works with advisors to customize its “Fundamentally, Castlewood’s offering to suit the needs of clients.” absolute return focus sets the Fund apart from its competitors. “The fund is able to offer better Our multi-strategy approach allows liquidity than many alternative Castlewood to tactically position the investments that have traditional fund to take advantage of shifting lock-up requirements. Additionally, market conditions. By comparison, Castlewood can provide an offer of investment funds with a fixed strategy exclusivity for advisors, which can – long only funds, commodity funds, help them differentiate their practice currency funds, bond funds, etc. – in a crowded marketplace.” only achieve success for their clients if market conditions are favourable This is particularly vital as to their strategy. In addition, risk Castlewood is dedicated to management has always been the developing relationships with family uppermost focus in our work, and offices and registered investment as such we put an extensive effort advisors to serve the unique needs into tools to manage risk leading of ultra-high net worth investors. to meaningful impact on our risk Clients value Castlewood’s ability adjusted returns. This will remain our to systematically provide returns ongoing focus as we look towards 2017 and beyond.”
“Here at the Third Friday Total Return Fund we do not take a market view, and as such our returns are not dependent on market direction; we are a genuine market neutral hedge fund. The Fund does not employ leverage. Our strategy is highly scalable since we invest in extremely liquid instruments (S&P
500 Index options). Collateral is invested in a diversified portfolio of income-generating securities. Current partners consist primarily of high net worth individuals, family offices and insurance companies, with funds available for both US and non-US investors.” Moving forward, the fund will remain focused on providing the very best returns possible, as it seeks to provide investors with the opportunity to invest in a product which is truly independent of market direction.
Acquisition International - Hedge Fund Awards 2017 61
Company: Tyrus Capital Phone: +377 9999 5030 Email: firstname.lastname@example.org Web: www.tyruscap.com
Company: Viteos Address: 80 Cottontail Lane, Suite 430, Somerset, NJ 08873, U.S.A Phone: +1 732-356-1200 Email: email@example.com Website: www.viteos.com
Best Global Event-Driven Hedge Fund (Since Inception): Tyrus Capital Event Fund & AI Best-in-Class Award for Operational Infrastructure
Best for Operational Efficiency / Shadow Accounting 2017 - USA & Award for Excellence in Bespoke Hedge Fund Solutions 2017 - USA
Tyrus Capital is a dedicated global investment manager offering a wide range of solutions, including its award winning Tyrus Capital Event Fund. We profile the firm and this exception investment product to explore the secrets behind its success.
Viteos is an outsourcedshadow accounting solutions provider offering innovative BPO solutions to help clients in the ever evolving financial markets. We invited Chitra Baskar, COO to tell us more about this dynamic and innovative company.
Established in 2009, Tyrus Capital launched in London with $1.5 billion and just sixteen employees. Entering 2017 however, Tyrus Capital now boasts a strong seven-year track record and nearly 40 employees with offices located in Monaco, London and New York. With an AUM of c. $2.2billion, the Tyrus Capital Event Fund remains one of the largest equity Event-Driven funds in Europe.
to build proprietary systems around the traditional vendor portfolio management systems to provide automated reconciliation tools.
These tools create alerts that enable the Operations team to focus on exceptions, trade breaks and operational risks in real time, while screen-based dashboards give the transparency needed to monitor every relevant aspect of As CIO, Tony Chedraoui has overall the business, including the IT and responsibility for portfolio construction operational infrastructure. and places central importance on developing a return profile that is Having opened a new office in New correlated to event activity, rather York in July 2016, Tony intends to than to wider markets. In working to selectively develop the investment deliver attractive risk-adjusted value and business teams where that has the ability to transcend appropriate; whilst maintaining an variations in an increasingly exciting pace of development within volatile macro environment, the state of the art IT technology given flagship Tyrus Capital Event Fund an ambition to continue setting new has returned +72% for investors levels of industry excellence in this inception-to-date.* area. From the outset, Tony has believed that investment into the Firm’s operational infrastructure was critical and Tyrus Capital has built a top-tier, award winning, institutional business platform which has impressed many operational due diligence experts.
Moving forward, Tony remains enthusiastic about what he perceives to be a potentially rich opportunity set for an event-driven strategy. Crucially, in what have proven to be volatile markets, Tony expects a that a targeted allocation of capital within a portfolio framework that is aimed at reducing directional exposures will continue to leave the Fund best positioned to capture available opportunities over the medium term.
Mark Madden, COO and his team set out to deliver infrastructure which not only gives the investment team all the relevant capabilities that they need, but that is also robust enough to survive almost any *Tyrus Capital Event Master Fund realistic business continuity event. performance data as at 31st The team uses its intellectual capital December 2016 62 Acquisition International - Hedge Fund Awards 2017
Viteos is committed to providing leading middle-office thought and practice as investment management operations become more complex. A distinct position both as a practitioner and technology provider affords Viteos an experienced perspective on the challenges in attaining scalability, efficiency and customization. Taking a different tack than other BPO and technology solutions providers, the firm is a customized blend of fund servicing activities with secure seamless STP technology for investment managers and providers. In her opening comments Chitra is keen to emphasise the firm’s dedication to providing bespoke solutions which meet the needs of each individual client. “Tailored for each manager’s specific requirements, our Best Thinking and Best Practices ensure that our solutions help managers grow. We offer customized straight-throughprocessing and integrate post-trade operations across virtually every asset class, currency, border, or structure you can imagine. Our service offering includes a full range of shadow-accounting, middle- and back-office professional services for investment managers. “Through our deep operational and accounting expertise backed by state of art technology we are able
to provide a high degree of control via automation in a 24 hour, five days a week global delivery model. The result is a new level of scalability and flexibility to help managers grow; whether their focus is on gathering assets, developing new strategies or entering new markets.” Moving forward, Chitra believes the future is bright for Viteos, as it looks to adapt to industry trends and offer the most relevant solutions which support managers in their ever changing industry. “Looking ahead, we continue to make improvements to our offering with the addition of each new fund as its special characteristics require customize solutions each time. Access is critical for both business intelligence and investment intelligence. Thirty years ago the standard settlement was T+5, today T+1 is inevitable. For those savvy state-of-the-art managers with outsourced shadow-accounting firms supporting them, cutting a NAV can be done daily and in some cases trade reconciliations can be updated three to four times during the day. At some point in the future the T+ time frames will be compressed to as close as zero as possible driven by agility, a primary need of the modern hedge fund, and we will aim to continue to operate at the forefront of the industry and offer the most up-tothe-minute solutions to our clients.”
Wermuth Asset Management
Company: Waha Capital Name: Amer Aidi Email: firstname.lastname@example.org email@example.com Web: www.wahacapital.ae Phone: 026677343
Company: Wermuth Asset Management GmbH Name: Dieter Wermuth Web: www.wermutham.com Address: Johannisstr. 3, 10117 Berlin
Asset Manager of the Year - Abu Dhabi & Best CEEMEA Fixed Income Securities Fund (3 Years): Waha CEEMEA Fixed Income Fund SP (A)
European Thought Leader in Sustainable Asset Management & Best Performing Long-Only European Equities Strategy: WEIS
Wermuth Asset Management
Waha Capital is an Abu Dhabi-based investment company that offers a range of attractive opportunities to institutional investors. We caught up with Amer Aidi to tell us more about the firm and the investment products and solutions it provides.
Waha Capital, based in Abu Dhabi, is one of the region’s leading diversified investment houses. Having traditionally been focused on managing private equity investments, the company over the last five years built out a business investing in public markets including Fixed Income and Equity products. Amer discusses the firm’s investment offering and how this helps to meet the needs of the firm’s investors, who include institutional investors, family offices, and private wealth clients.
trades where we can capitalise on mispriced securities whilst keeping overall market risk to a minimum. This strategy is particularly effective in current market conditions, where reduced liquidity results in increased market dislocation during sell offs.”
Ultimately, as a relatively recent entrant into the public market business, Waha Capital has gained a strong reputation both locally in the region as well as internationally over a short period of time. Going forward, Amer believes that the firm’s recent “At Waha Capital we offer investors success will help it to achieve access to our two funds: the Waha greater triumphs. MENA Equity Fund and the Waha CEEMEA Fixed Income Fund. “Moving forward, we firmly believe Both funds have an absolute return that this could be the beginning of mandate, as such have the ability a growth phase for the business. to go long or short publicly listed With our multi-year track record securities. Clients are seeking to and investment team in place, we steadily compound their invested have recently placed an increased funds with limited drawdown and are emphasis on expanding the looking for an investment vehicle that awareness, and marketing the has the capability to provide absolute platform to the appropriate audience. return in a positive or negative global There has been a growing interest market backdrop. for our products, as investors are impressed by our ability to hedge risk “Our investment philosophy helps and preserve capital in downturns.” meet this need and sets us apart from our competitors, as does our long / short mandate. We are able to take both long and short positions within our investment universe, enabling us to put on relative value long / short
Wermuth Asset Management GmbH (WAM) is a German family office and BaFin-regulated investment adviser. Founding Partner Dieter Wermuth talks us through the firm and the investment strategies it provides. Since its foundation Wermuth Asset Management has identified core areas of business where it can bring added value for its investors. The firm focuses on the following investment strategies: private equity with a focus on resource efficiency; real estate development; systematic long/short equity; and long - only activist value investing. Each strategy aims to achieve a positive real total return over the medium term. The firm’s flagship approach, Wermuth Europe Income Strategy (WEIS), is a high value focused strategy which Dieter is keen to discuss. “WEIS is a strategy which centres around value investing, with a focus on yield-generating assets in West European listed assets, as well as cash. Since this is a buy-andhold approach without the use of leverage, there won’t be any forced sales in a crisis. In order to keep transaction costs to a minimum, holding periods are several years. Even so, weekly liquidity is a key feature of the strategy - the portfolio consists almost exclusively of liquid large-cap stocks. “From November 2011, when the strategy was launched, through to November 2016, the average annual return has been 19.4%, compared to 8.6% for the EuroStoxx 50 Net Return
Index which is used as a benchmark. No investments have been made, or will be made, into companies engaged in the exploration and production of fossil fuels, or stocks of firms which depend on burning them, in particular into any of the “Carbon 200 companies”, as defined by Carbon Tracker. In terms of fossil fuel reserves, these are the world’s largest listed ones.” Looking to the future, Dieter foresees a number of exciting developments which will help the firm to build upon the current success of its innovative strategy. “Within the investment industry we foresee further future development of quant strategies, high-frequency in particular; also artificial intelligence, neural networks, machine learning, big data are all parts of industry development. Many strategies in listed space are now more systematic and use some quant algorithms. “With specific regards to our firm’s approach, as our aim is to buy and hold and to focus on liquid stocks, management and other fees are expected to remain very low while the income flow will be steady and generous. As such ours is an ideal strategy for long-term investors with predictable liabilities.”
Acquisition International - Hedge Fund Awards 2017 63