Hedgeweek Interviews
Princeton Premium Fund picks up Hedgeweek Award
Princeton Fund Advisors' Princeton Premium Fund has been recognised as the Best Liquid Alternative Fund – Multi-Strategy Hedge at the Hedgeweek US Awards 2021.
The annual Hedgeweek Americas Awards recognise excellence among hedge fund managers and service providers in the Americas across a wide range of categories. The fund was honoured in the “Liquid Alternative - Multi-Strategy Hedge” category for its 12-month performance in the period leading up to the awards, with the shortlist provided by Bloomberg.
The Fund seeks capital appreciation and income with the goal of delivering compelling, non- correlated absolute returns.
“The past 19 months have seen what we believe are some of the most volatile markets in history for both equities and fixed income,” says Zachary Slater, Senior Vice President and Portfolio Manager at Princeton Funds Advisors, LLC. “We believe a key to our performance over the last year has been our discipline with respect to risk management.”
“We would like to say thank you to our clients and industry colleagues, as well as congratulations to other winners and all those who were shortlisted for the awards,” says Greg Anderson, President and Portfolio Manager at Princeton Funds Advisors, LLC.
Like this article? Sign up to our free newsletter Author Profile Related Topics AwardsBTIG named Best Prime Broker for Start-Up and Emerging Managers at Hedgeweek’s Americas Awards 2021
BTIG’s Prime Brokerage division has been named the Best Prime Broker for Start-Up and Emerging Managers by Hedgeweek’s Americas Awards 2021.
Now in its tenth year, the annual Hedgeweek Americas Awards “recognise excellence among hedge fund managers and service providers in the Americas across a wide range of categories.”
According to Hedgeweek, 41,227 votes were cast in the process to select firms of which 44 per cent were submitted by fund managers, 20 per cent by investors and 36 per cent by service providers. BTIG’s award was announced at Hedgeweek’s awards ceremony on Thursday, 21 October, 2021.
“Our Prime Brokerage team is honoured by this recognition for our start-up and emerging fund capabilities,” says Brian Petitt, Managing Director and Co-Head of BTIG Prime Brokerage. “The award is a testament to the dedication of our responsive client service team and commitment to helping clients achieve their business objectives.”
“We are incredibly proud of our team and the critical role our employees play in helping clients launch funds and achieve their goals,” says Justin Press, Managing Director and Co-Head of BTIG Prime Brokerage. “Since the Hedgeweek Americas Awards is a result of a tally of votes from funds and industry peers, it is an especially meaningful acknowledgement of the work we do each and every day."
Like this article? Sign up to our free newsletter Author Profile Related Topics Awards Services Prime brokersMacquarie and Protean Capital execute QIS index based on machine learning
Macquarie’s Commodities and Global Markets Group (Macquarie) and UK fund manager, Protean Capital LLP (Protean) have executed the first Quantitative Investment Strategy (QIS) index, that uses signals based on a reinforcement learning (RL) model to inform systematic FX volatility carry trading strategies.
Through its unique market position, Macquarie provides access to a range of specialised investment products, hedging and tailored financing solutions. Macquarie’s Quantitative Investment Strategies (QIS) team tailors systematic products, providing access to commodity, equity, FX and fixed income exposures.
Macquarie leveraged its pioneering technology platform, incorporating state-of-the-art machine learning models, to develop a RL algorithm. The algorithm sizes the number of options to be sold as part of the FX volatility carry strategy. Through these innovative RL techniques, Macquarie was able to improve the strategy’s downside risk profile and risk adjusted returns.
Arun Assumall, Head of Macquarie’s QIS team, says: “The RL model learns market behaviour through trial and error using feedback from its own trading actions during the model training period. The real skill of applying machine learning in this context lies in the training of the model, to ensure it takes the most relevant information and successfully encapsulates the current trading and market dynamics.”
Bob Champney, Managing Partner at Protean Capital, adds: “Protean have been working with Reinforcement Learning techniques to improve client portfolio returns for a number of years but had found it difficult to find a partner bank to provide concrete implementations. Macquarie were the only bank that provided a skill set and platform which enabled Protean to fully benefit from these techniques.”
According to Macquarie, careful application of machine learning and model training, ensures the algorithm is as effective as possible in generating the best trading decisions in live scenarios, and the resulting signals can be easily interpreted by the QIS team. The successful application of RL in volatility strategies paves the way for its wider use in other systematic investment strategies.
How hedge funds became the new fixed income substitute
By Andrew Beer (pictured), founder and managing member of Dynamic Beta Investments – Almost overnight, allocators started to swap out fixed income exposure for hedge funds. What’s driving this? Two trends: after large and sudden drawdowns in both 2020 and 2021, many allocators simply want out of traditional fixed income; meanwhile, with alpha back, hedge funds appear to have much better return potential with comparable or lower risk.
Let’s start with the first trend. The difficult reality today is that fixed income investors face paltry expected returns with potentially big downside risk.
Take AGG, an ETF that tracks the Barclays Agg, a diversified representation of Treasuries, investment grade bonds and more complicated things like mortgage securities. Per Blackrock, the current average yield to maturity is around 1.4 per cent.
Let’s call this the base case: very simplistically, you put USD100 in AGG today and six plus years later you have around USD109. Less than you used to earn in a savings account, but that notoriously low volatility (3 per cent) can feel nearly as safe, predictable.
One allocator coined a phrase to describe this thinking: “fixed income is the new cash.”
But volatility is misleading: the real concern these days is downside risk. Investors need to walk a tightrope to earn that 1.4 per cent per annum: risk-free rates stay historically low, credit spreads remain razor thin, defaults are non-existent.
As the chart below shows, both rates and credit spreads are at or near historical lows. As a practical matter, as both approach the “lower bound” of zero, return expectations drop and risk rises.
Two recent canaries in the proverbial coal mine underscored this “fat tail” risk. In the first three weeks of March 2020, as the pandemic took hold, Treasury yields plummeted to well below 1 per cent while credit spreads quintupled.
By month end, fortunately, the Fed had launched an unprecedented QE programme and markets recovered much lost ground. But the intra-month drawdowns were too extreme to gloss over. The chart below shows the March 2020 return and intra-month drawdowns of Treasuries, investment grade bonds and high yield.
Both investment grade and high yield bonds suffered intra-month drawdowns of greater than 20 per cent and posted losses that wiped out years of returns. Even long dated Treasuries, which rose during the month, had a 15 per cent drawdown. This was a flock of angry black swans.
Then, during the first quarter of this year, the “too hot” recovery caused an inflation scare and a spike in Treasury yields.
As shown below, longer dated Treasuries lost nearly 15 per cent. Investment grade bonds also lost money – again, the equivalent of 2-3 years of returns – and had a drawdown of around 7 per cent.
High yield bonds fared much better due to higher sensitivity to equities, which rose. For many segments of the bond markets, a normalisation of rates by 300 basis points – not a huge stretch considering the past 20 years – could mean losses of 10-20 per cent and wipe out a decade of returns.
Put another way, more black swans lurk around dark corners of the fixed income world.
Enter hedge funds. A few years ago, hedge funds were a tough sell. Allocators were primarily concerned that a deflationary spiral might cut the legs out from under sky-high equity valuations. On the fixed income front, yields were abysmal, but the taper tantrum of 2013 was ancient history and monetary tightening an unlikely prospect.
Yet the deflationary spiral did not kick in, and as low rates went even lower, both equity and bond prices marched upward. Rather than act as shock absorbers, both sleeves of the proverbial 60/40 portfolio were hitting on all cylinders.
Hedge funds, in the midst of a rough period for alpha generation, had the dubious honour of delivering bond-like performance with equal or higher risk, or less than half the return of equities with half the risk.
Many investors concluded, perhaps rightly, why bother?
Today, the hedge fund renaissance is in full swing. Take the March 2020 period described earlier: like most investors, hedge funds were largely caught off guard by Covid-19 and the hedge funds lost 9 per cent intra-month – not perfect, but very good in the context of both equities and bonds. Yet hedge funds adapted quickly and, as we’ve written elsewhere, anticipated both the economic recovery and value rotation.
They ended the year up high single digits with enough alpha generation to make up for years of struggles. Then many hedge funds, like managed futures, called the inflation scare early and made money as rates jumped. The latter performance increased the appeal of some strategies as “dynamic inflation hedges” – and hence a direct way to mitigate some of the fat tail risks described above.
Which brings us full circle to expected returns. What will hedge funds return over the coming decade? Obviously, no one knows for certain. But 1-2 per cent per annum in fixed income is a very, very low bar. Even during the “lost” years of the 2010s, hedge funds earned 4 per cent a year – after a ton of fees.
Throw in some decent market conditions with alpha generation, and you can easily see 6 per cent a year. Intelligently cut out fees and expenses and even more alpha generation might make its way back to client portfolios.
For allocators, this could mean three to four times the return, with the same or lower risk. Framed this way, the substitution argument may be a no-brainer.
Like this article? Sign up to our free newsletter Author ProfileControlling the hidden costs of systematic investing whilst maximising alpha creation in a low-return environment
Quant technologies provider SigTech advises systematic investment managers not to assume that an approximation of trading costs is accurate enough to account for real world trading frictions, in a recent paper entitled ‘How to Control the Hidden Costs of Systematic Investing’.
Angana Jacob, Head of Product Management at SigTech highlights that the impact of trading costs can be similar in magnitude, or even outweigh, the systematic premia they aim to capture. Jacob points out that trading costs assume greater significance in a low-return environment as they effectively represent a greater proportion of return available.
When the ‘hidden costs’ of a systematic strategy are underestimated or inaccurately incorporated into a backtest, they will only show up once their often-significant impact on the bottom line has become apparent. Accurate and granular accounting of costs tailored to the particular instrument and the size traded avoids this situation. To construct robust investment strategies, it is essential that asset managers accurately incorporate all trading costs including commissions, slippage, bid-ask spreads and market impact into their backtesting process.
Explicit and implicit components
The overall cost of a systematic trading strategy comprises explicit and implicit components. The explicit component is typically known in advance of trading, such as agency commissions and fees. Implicit costs are less observable, harder to estimate and can be of a higher magnitude than the explicit costs.
Implicit costs can be characterised as containing three parts:
- Instant impact: Cost incurred immediately, such as crossing the bid/offer spread or incurring slippage
- Temporary impact: Adverse market price movement during the execution of the trade
- Permanent impact: Difference in market price before and after trade
The temporary and permanent impacts are sometimes grouped together as market impact.
Example backtest: FX Short-term Value Strategy
In this example, an FX systematic strategy holds a long-short basket of FX futures and adjusts its positions on the back of short-term fundamental signals. In effect, the strategy rebalances weekly with positions in the basket completely reversing from one rebalance to another. The higher rebalancing frequency has the advantage of increased reactivity, but the sheer number of trades creates an annualised cost of 1.5 per cent loss in returns. On a cumulative basis over a decade, the strategy’s total return net of costs (1.6 per cent total) ends up a tiny fraction of its hypothetical gross return with zero costs (17.1 per cent total).
FX short-term Value Strategy
This realistic estimation of trading costs suggests improvements to the strategy, be it running scenarios for lower turnover versions or including selection penalties for currencies with wider spreads and higher volatilities. Furthermore, backtests of systematic strategies within the FX markets typically use a cut-off point at New York close, which in real-life is a less liquid fixing time. A robust FX backtesting process would instead allow testing for performance across multiple execution time cuts.
Building more realistic strategies
Thoughtful design of systematic strategies can help control transaction costs. Estimating this cost depends on several variables, especially as costs can vary across trades depending on size, trade type, instrument characteristics, and venues. To have a better grasp of what proportion of hypothetical returns are accessible, portfolio managers need a more granular and accurate view of the costs of strategies down to individual orders. The ability to incorporate the key attributes of individual trades such as bid-ask spread, volatility, volume and the forecasted market impact into the backtest is critical to understand the projected cost of the strategy.
Modelling for trading costs is also valuable for strategies in production to determine the slippage between the backtest model assumptions and the live production environment as well as developing a better understanding of its causes.
Previously, portfolio managers had to individually, and correctly, incorporate the relevant costs into their research and backtesting process. Now, technology can provide the required level of detail and accuracy through out-of-the-box transaction cost functionality which can be calibrated as per the user’s needs and integrated with proprietary TCA models and data.
A well-designed platform that facilitates easy and accurate construction of backtests that factor in real trading costs can have a significant effect on the bottom line.
Like this article? Sign up to our free newsletter Author Profile Related Topics Surveys & researchComplySci acquires NRS
ComplySci, a provider of regulatory technology and compliance solutions for the financial services sector, has launched an M&A growth strategy with the acquisition of National Regulatory Services (NRS), an provider of compliance consulting services and technology solutions for investment advisers, broker-dealers, hedge funds, private equity firms, insurers and other financial services firms.
The transaction further strengthens and expands ComplySci’s ability to support its financial services clients’ compliance needs by combining its technology, which automates and streamlines mission-critical employee compliance functions, with NRS’ longtime, hands-on expertise in helping clients navigate the ever-changing industry regulatory environment.
Moving forward, NRS – which was founded over three decades ago – will do business as NRS, a ComplySci Company, with John Gebauer continuing his role as President, NRS. NRS was formerly part of Accuity, a LexisNexis® Risk Solutions company and a part of RELX, the global provider of information-based analytics and decision tools for professional and business customers.
The acquisition of NRS reflects ComplySci’s broader growth vision for broadening its service and product offerings through both organic expansion as well as multiple strategic acquisitions to become the go-to resource for compliance solutions for financial services companies. It is ComplySci’s first acquisition since receiving a USD120 million growth equity investment from K1 Investment Management, the global private equity firm, in June.
ComplySci CEO Amy Kadomatsu says: “When we received our recent equity growth investment of USD120 million just over three months ago, we were excited to leverage the capital to add fuel to our growth through acquisitions as well as investments in our products and services. Our acquisition of NRS creates a truly differentiated offering of technology-driven, automated RegTech capabilities, combined with NRS’ hands-on personal compliance guidance based on 30-plus years of experience, insight and technical understanding.”
Kadomatsu says: “We’ve actually been working closely with NRS for years referring clients to each other to complement our respective capabilities. There’s no doubt that ComplySci’s clients will benefit enormously from the NRS team’s expertise, consulting services, educational programs and ComplianceGuardianTM technology, while NRS’ current clients will benefit from an end-to-end compliance management solution with a single point of contact. Technology solutions are so much more powerful when coupled with experts who provide personal guidance to help clients utilise it most effectively within their business. This acquisition positions ComplySci to reach new levels of growth and industry recognition.”
Gebauer says: “Long before any strategic discussions started, we were deeply familiar with ComplySci’s differentiated value proposition, and when the opportunity to join them arose, it made sense, both from a strategic perspective and in terms of enhancing our ability to offer our clients a holistic package of compliance-management solutions and services. We are thrilled to collaborate with Amy and the entire ComplySci organisation as we move forward together as one firm, leveraging the combined power of our two business models.”
ComplySci board member Stephen Marsh, Chairman and Founder of the electronic communications archiving provider Smarsh, says: “I have a long history with both organizations, and I am thrilled to be working with John Gebauer and his NRS team again. The incredible growth potential that the combination of these two organizations will bring is exciting. With the acquisition of NRS, ComplySci will enhance their already robust suite of compliance solutions and continue to evolve as the provider of choice for automated regulatory and compliance solutions in the financial services space.”
VALK surges to USD4bn in platform deals in past year
Private markets digital platform has achieved USD4 billion-plus in assets and deals in a year as it continues rapid growth which has seen more than 70 financial institutions across Europe, North America, the Middle East, South America and Africa using its technology in 2021.
VALK, which is backed by venture capital funds and strategic financial investors R3, SIX Group, Ascension Ventures and Metavallon, has seen growth of 2,500 per cent in just nine months, having only celebrated hitting USD1 billion in deals in M&A and fund-raising activity just five months ago.
The London-based company enables clients including investment banks, hedge funds, family offices, fund managers and asset managers to digitise processes and assets to become more profitable and target new opportunities through secondary trading and access to exchanges
Its technology replaces slow manual processes in private markets with an end-to-end digital transaction and tokenisation platform which allows users to highlight opportunities to clients by delivering all the deal processes on one platform.
The platform, which is built on the Corda and Ethereum blockchain standards, boosts liquidity as it enables an easily implemented secondary market while supporting users to share deals and assets with other members of the VALK network. Clients can share opportunities or investor pools and also connect to any digital exchanges on the Corda and Ethereum framework.
Clients set up secure private portals in just a few clicks where they store and outline deals and assets in an investor-friendly manner and can instantly tokenise all uploaded assets.
Antoine Loth of VALK says: “Growth this year has accelerated across private markets as more financial institutions recognise the value and efficiency that can be delivered by moving to digital solutions as well as the opportunities for new revenues from secondary market transactions.
“The past nine months has seen phenomenal growth, but the private markets sector is worth more than USD100 trillion and there is a lot of work to do as well as other markets to address where our technology could play an important role.”
VALK’s rapid growth and success has been recognised by inclusion in the Financial Conduct Authority regulatory sandbox and Fintech 4.0, the fourth group of fintech companies selected for the Fintech growth programme run by Tech Nation.
The brainchild of founders Antoine Loth and Elie Azzi, VALK, which launched in 2019, aims to make global private markets digital and connected by offering a seamless end-to-end solution which improves processes and transforms how private transactions are conducted.
Its white-labelled solution is delivered to clients very quickly by VALK and can then be customised by the client. They can create any type of deal in a few clicks, set up deal pages and ultra-secure enterprise grade data rooms and upload legal documentation as well as instantly tokenise all of their assets that are uploaded.
The platform helps clients to keep up to date with investor activity while providing them with compliant and accurate live reporting on the performance of assets and holdings.
VALK has won Best Distributed Ledger Technology Project at the 2021 Sell-Side Technology Awards 2021 and was highly commended as Technology Provider of the Year at the 2021 Asset Management Awards. It has also been nominated for the FStech Awards.
“We are getting a lot of requests from clients and the market for even more innovative solutions on the digital asset and DeFi side so don’t be surprised if you hear from us soon with new product offerings that cater to that fast growing and complementary industry,” says Elie Azzi.
Like this article? Sign up to our free newsletter Author Profile Related Topics Results & performance CompaniesMacquarie Asset Management acquires alternative investment firm Central Park Group
Macquarie Asset Management (MAM), the asset management division of Macquarie Group, has agreed to acquire New York-based Central Park Group (CPG), an independent investment advisory firm delivering private client access to institutional hedge fund, private equity, real estate and funds-of-funds.
The agreement underscores MAM’s commitment to offering individual investors a diversified platform of institutional-quality alternative investments managed by Macquarie and other leading sponsors.
With more than USD3.5 billion in assets under management, Central Park Group is a pioneer in providing financial advisors and their clients access to top alternative investment talent in structures specifically designed to meet the needs of high-net-worth and smaller institutional investors.
“We have long admired Central Park Group’s track record of innovation and success in delivering alternative solutions to individual investors. Given our alternatives expertise and our significant presence in the intermediary channel, the combination of Macquarie and Central Park Group uniquely positions us to address the needs of individual investors by providing increased access to alternative investments along with an enhanced client experience,” says Ben Way, Head of Macquarie Asset Management.
The acquisition highlights Macquarie’s approach to serving clients and becoming a leader in the US high-net-worth alternatives sector. To support this effort, Macquarie is continuing to build its suite of cohesive value-added services, robust educational tools, curricula, and broad platform of alternative investment offerings based on its deep, long-standing industry and asset-class experience.
“The asset management industry is rapidly evolving, and individual investor demand for alternative strategies is playing a central role in this dramatic shift. Macquarie’s objective with the acquisition of Central Park Group is to empower clients and their financial advisors to invest for long-term success through access to institutional-quality alternative investment opportunities in thoughtful structures,” adds Graeme Conway, Chief Commercial Officer at Macquarie Asset Management.
“Joining forces with Macquarie is the natural next step in Central Park Group’s evolution,” says Gregory Brousseau, Co-Chief Executive Officer and Co-Chief Investment Officer of Central Park Group. “We will continue to offer best-in-class alternative investments and clients will benefit from the added resources, depth and scale of a major global financial institution.”
“Macquarie is committed to democratising alternative investments,” says Mitchell Tanzman, Co-Chief Executive Officer and Co-Chief Investment Officer of Central Park Group. “As part of Macquarie, we will be able to further our mission of eliminating many of the structural impediments to private client investment in best-in-class alternatives, on a substantially larger scale. With a shared vision and similar entrepreneurial spirit, we believe that Macquarie is a great fit for Central Park Group.”
The transaction is expected to close in early 2022. Financial terms of the transaction have not been disclosed.
PIMCO appoints MD overseeing portfolio management reengineering and infrastructure
Fixed income investment manager PIMCO has hired Ayman Hindy as Managing Director overseeing Portfolio Management Reengineering and Infrastructure. He will be based in Newport Beach and will report to Dan Ivascyn, Managing Director and PIMCO Group Chief Investment Officer.
Hindy will also work closely with Manny Roman, Managing Director and PIMCO Chief Executive Officer, on certain business initiatives which impact portfolio management.
In this newly created role, Hindy will bring a unique mix of experience in both investment management and academia, with a record of success in building trading platforms and infrastructure. His range of skills in the hedge fund industry includes the development of fixed income relative value and macro trading strategies, risk management and oversight of business and regulatory issues. In academia, he has authored ground-breaking research in leading academic journals, has served as an Associate Professor of Finance at Stanford University’s Graduate School of Business, is a guest lecturer at leading business schools and has served on the advisory board of the Cairo Stock Exchange.
“Ayman is an excellent addition to PIMCO’s portfolio management team,” says Ivascyn. “Together with our Risk, Quant and Analytics teams, Ayman will help keep the firm’s trade floor at the forefront of an industry that is experiencing an unprecedented period of rapid technological advances in trading and data analysis.”
Hindy’s role will focus on the operational oversight of portfolio management processes, technology and execution, ensuring the seamless integration of analytics, technology, risk management and portfolio management. He will have risk oversight of complex products, will develop strategies to improve trade floor efficiency and implement best practices across PIMCO’s alternatives complex. He will work closely with the Risk, Quant and Analytics teams on a range of initiatives including AI, making the best use of PIMCO’s data and analytics and the firm’s hedge fund investment process, among others. He will also play an important role in recruiting and training PIMCO’s next generation of PM talent within Quant and Analytics.
Genesis launches beta version of no-code builder tool
Genesis, the low-code/no-code platform built for financial markets, has launched a beta version of Genesis Studio, a full-stack no-code builder tool, along with the Genesis Academy pilot education programme, as part of its newest platform updates.
Genesis Studio is a full-stack no-code development environment for building real-time applications for financial markets. It allows users to design their data model and user interface in a single tool, simplifying the creation of event-driven applications that require high performance and resilience. More on Genesis Studio:
Genesis Studio integrates directly with source control technologies such as Git, enabling a seamless development experience between no code in Genesis Studio and low code in the user’s preferred integrated development environment of choice.
Direct source control integration also allows Genesis Studio to integrate with existing CI/CD pipelines, further accelerating IT delivery.
“Genesis Studio allows financial markets firms to use the tools and workflows they are already comfortable with, rather than imposing new processes,” says Stephen Murphy, CEO of Genesis. “This is one of the many ways Genesis provides flexibility and empowers customers to ‘buy to build’ applications on their terms. Critically, Genesis Studio also helps customers break free of vendor lock-in by offering access to their code and control over their IP. We want to provide a seamless and holistic development experience to help customers build applications faster, and we’re looking forward to rolling out Genesis Studio to more clients soon.”
Additional updates announced today address customer education and database integration. The new offerings and updates include:
Genesis Academy: A new pilot programme with example applications, instructor-led classroom lessons and documentation that helps users to get up and running on the Genesis platform as quickly as possible. Currently in limited availability, Genesis plans to make the new academy available to more customers later this year.
Oracle & enhanced database integration: Genesis has enhanced its database integration tooling, which enables users to rapidly and automatically construct a Genesis application from legacy relational databases – offering a higher-degree of automation and wider database coverage, and now includes support for Oracle databases.
“Applications built upon legacy relational databases have become too inefficient, too difficult to change or too risky to operate, in terms of regulatory compliance and oversight,” says Murphy. ”Our platform advancements make it much faster for users to get started building replacements for legacy applications. The easier we can make it to replace these legacy applications, the better.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Technology & software solutionsWinners announced for Hedgeweek Americas Awards 2021
Hedgeweek has announced the winners of the Hedgeweek Americas Awards 2021, compiled in conjunction with Bloomberg, which were presented at an exclusive awards presentation ceremony and industry networking event at The University Club in New York.
The winners represent the best in the American hedge fund industry, from fund managers to service providers, covering all areas of the hedge fund ecosystem.
The hedge fund categories cover a wide range of investment strategies – including Equity, Credit, Macro, CTA, Event-Driven, Specialist Equity Sector, Relative Value, Insurance-Linked Strategies, Structured Credit and Multi-Manager – while the service provider categories span all the key areas of the broader hedge fund industry ecosystem.
There are also additional fund manager award categories for Women-Managed funds, Emerging Manager funds, Liquid Alternative funds, Canadian funds, and Latin American funds.
For the fund manager categories, pre-selected shortlists were compiled based on data provided by Bloomberg, analysing annualised performance by Americas-based hedge funds in their respective categories over a 12-month period from 1 June, 2020 to 31 May, 2021.
For the service provider categories, short-listed firms were based on a widespread survey of more than 400 fund managers and other key industry participants.
Voting for the eventual winners was then conducted via an extensive online poll of the Hedgeweek readership carried out over a period of several weeks.
For more information on future awards event, please contact us.
The winners in each category in the Hedgeweek Americas Awards 2021 are:
FUND MANAGER CATEGORIES
Best Macro Hedge Fund – Calvion Capital Master Fund LP
Best Multi-Strategy Multi-Manager Fund – Equitas Evergreen Fund LP
Best Emerging Manager Fund – Credit Hedge – Haitou Investment Management LLC
Best Liquid Alternative Fund – Equity Hedge – Easterly Snow Long/Short Opportunity Fund
Best Credit Hedge Fund (Up To USD500m) – Artisan Partners Credit Team
Best Relative Value Hedge Fund – Lazard Rathmore
Best Liquid Alternative Fund – Credit Hedge – Marathon Asset Management LP
Best Equity Sector-Focused Hedge Fund – Healthcare – Optima Asset Management (JENOP Global Healthcare Fund)
Best Latin American Hedge Fund – Macro Strategies – Algarve Investimentos
Best Emerging Manager Fund – Equity Hedge – Fairlight Capital LLC
Best CTA Hedge Fund – Gresham Investment Management
Best Equity Hedge Fund (Up To USD500m) – Loyola Capital Management LLC
Best Insurance-Linked Strategies Hedge Fund – Pillar Capital Management Limited
Best Liquid Alternative Fund – Multi-Strategy Hedge – Princeton Fund Advisors LLC
Best Emerging Manager Fund – Macro Hedge – Black Bear Capital Advisors
Best Equity Sector-Focused Hedge Fund – Technology – Cobia Capital Management LP
Best Equity Sector-Focused Hedge Fund – Financials – Elizabeth Park Capital Management
Best Hedge Fund Domicile – Cayman Islands
Best Credit Hedge Fund (Over USD500m) – Aequim Alternative Investments
Best Equity Hedge Fund (Over USD500m) – Anson Funds Management
Best Canadian Hedge Fund – Credit Strategies – Arrow Capital Management
Best Liquid Alternative Fund – Macro Hedge – Catalyst Capital Advisors
Best Smaller Hedge Fund (Up To USD50m) – Connective Capital Management
Best Event-Driven Hedge Fund (Over USD500m) – Engaged Capital
Best Structured Credit Hedge Fund – Hildene Capital Management LLC
Best Overall Hedge Fund (Over USD1bn) – JW Asset Management LLC
Best Canadian Hedge Fund – Equity Strategies – Lightwater Partners
Best Female-Managed Hedge Fund – PCM Partners International
Best Latin American Hedge Fund – Equity Strategies – Safra Asset Management
Best Event-Driven Hedge Fund (Up To USD500m) – Schultze Asset Management
SERVICE PROVIDER CATEGORIES
Best Administrator – ESG – SS&C Technologies
Best Digital Assets Custodian – Copper.co
Best Alternative Data Provider – Similarweb Inc
Best Insurance Service Provider – Alliant
Best AI Technology Provider – Sentieo
Best Trading Technology Provider – Linedata
Best Accounting Firm – EisnerAmper
Best Accounting Firm Start-Up & Emerging Funds – Akram Assurance – Advisory & Tax
Best Tax Advisory – Anchin
Best Offshore Administrator – Horseshoe – An Artex Company
Best Administrator – Technology – UMB Fund Services
Best Administrator - Start-Up & Emerging Funds – Opus Fund Services
Best Data Management Solution – Arcesium
Best Managed Accounts Platform – BNY Mellon HedgeMark
Best Law Firm - Digital Assets – Seward & Kissel LLP
Best Outsourced Trading Provider – Cowen
Best Pr And Communications Firm – Peaks Strategies
Best Risk Management Software – FIS
Best Audit Firm – CohnReznick LLP
Best Offshore Regulatory & Compliance Firm – Waystone
Best Regulatory & Compliance Firm – IQ-EQ
Best Seeding Platform – Investcorp-Tages
Best Prime Broker - Start-Up & Emerging Managers – BTIG
Best Cybersecurity Provider – Align Managed Services
Best Prime Broker – Jefferies
Best ESG Solution – The Citco Group of Companies
Best Portfolio Management Software – SS&C Eze
Best Law Firm – Sadis & Goldberg LLP
Best Third Party Marketing Firm – Agecroft Partners
Best Fund Accounting and Reporting Software – SS&C Advent
Best Managed Service Provider – RFA
Best Offshore Law Firm – Ogier
Best Treasury Management Solution – Kayenta
Best Administrator - Overall – SEI Investment Manager Services
Best Cloud Services Provider – ECI
Best Recruitment Firm – Selby Jennings
Best Outsourced Solution – ACA Group
Best Index Provider – BarclayHedge
Best Custodian Services – BNY Mellon
Best Administrator – Middle-Office Services – NAV Fund Administration Group
Best Data Science Solution Provider – BMLL
Best Trading And Execution Platform – TS Imagine
SS&C GlobeOp Forward Redemption Indicator ay 1.56 per cent for October
The SS&C GlobeOp Forward Redemption Indicator for October 2021 measured 1.56 per cent, up from 2.45 per cent in September.
"SS&C GlobeOp's Forward Redemption Indicator reached an all-time record low of 1.56 per cent for October 2021, making it the lowest level of monthly redemptions in the history of the Forward Redemption Indicator, going back to its inception in 2008," says Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies. "On a year-over-year basis, the 1.56 per cent compares very favourably to the 2.84 per cent reported for October 2020 and marks the sixteenth consecutive month of year-over-year improvements.
"With well over a year of positive comparisons since the Covid-19 outbreak, the emerging data suggest redemptions may be moving to a lower secular trend line, a very good sign for continued hedge fund industry asset growth."
Like this article? Sign up to our free newsletter Author Profile Related Topics Funds Results & performanceHedge funds edge towards USD4 trillion milestone as volatility surges
Total hedge fund industry assets have swelled to almost USD4 trillion globally, a rise of nearly USD370 billion since the start of this year, according to new capital flows data.
Hedge fund managers attracted USD5.6 billion of new investor money throughout the third quarter, supplemented by marginal performance-based gains, putting total industry capital at USD3.97 trillion overall, Hedge Fund Research stats show.
Global hedge fund assets have rebounded sharply over the course of the Covid-19 pandemic, according to HFR’s latest Global Hedge Fund Industry Report – with total industry capital soaring by more than USD1 trillion in the previous six quarters, after falling below USD3 trillion in Q1 2020 when the coronavirus outbreak began.
With the USD5.6 billion of inflows for Q3 this year, net inflows since Q3 2020 total some USD40 billion, HFR said.
“Total global hedge fund capital nudged higher Q3 2021 narrowly eclipsing the prior quarter record and inching towards the USD4 trillion milestone as commodity prices surged, interest rates increased, equity market volatility increased, and inflationary pressures continued to build,” said HFR president Kenneth Heinz.
Against a backdrop of declining Federal Reserve bond-buying and anticipated interest rate rises, Heinz highlighted strong performances and inflows among credit- and interest rate-sensitive fixed income relative value arbitrage hedge funds, which led the pack during the three-month period between July and September.
Overall, relative value arbitrage managers saw assets increase by USD16.8 billion, with contributions from both investor inflows and performance-based gains. Total capital invested in this sub-sector increased to USD1.026 trillion, including an estimated USD3.2 billion of net asset inflows for the quarter, led by multi-strategy funds, which increased by USD8.9 billion on performance-based gains and net asset inflows.
Equity long/short strategies – a cornerstone of the global hedge fund industry – saw the bulk of investor inflows in Q3 as both managers and investors positioned for growing equity volatility and rising inflationary pressures.
Equity long/short assets topped USD1.21 trillion at the end of Q3, with a modest performance-based decline partially offsetting net asset inflows. Total equity hedge capital globally has increased by USD119 billion since the start of 2021. Despite equity-focused managers slipping 0.8 per cent in Q3, year-to-date performance gains stand at 11 per cent.
Equity market neutral and energy/basic materials-focused funds saw Q3 capital increases of USD1.7 billion and USD1.5 billion, respectively.
Global macro hedge funds – which had previously led investor flows in Q2 – suffered a narrow capital outflow in Q3, as USD1.6 billion of inflows to commodities-focused strategies were set against USD1.4 billion of outflows from quant CTA managers. Overall, HFR data shows total macro capital dropped by USD4.8 billion during Q3 to an estimated USD639 billion in assets.
Meanwhile, event driven hedge funds remained steady during Q3, having early surpassed USD1 trillion the previous quarter. Total event driven capital dipped narrowly by USD1.6 billion in Q3, remaining at around USD1.09 trillion, the second largest strategy of total industry capital. Within the sector, distressed/restructuring strategies rose by USD2 billion in the three-month period to some USD250 billion.
“Looking to the year ahead, managers and investors have increased their respective focus on portfolio credit and interest rate sensitivity, tactical commodity exposures and equity market exposures, with implied optionality and flexibility to adjust to a fluid macroeconomic environment and market conditions,” Heinz observed.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Funds Investments Markets Results & performance Investing in Hedge FundsNeuberger Berman adds to consultant coverage leadership team
Neuberger Berman, a private, independent, employee-owned investment manager, has adde Michelle Dunne as a managing director in its consultant coverage leadership team.
Dunne will partner with Jamie Wong to lead the consultant efforts across EMEA, working closely with their counterpart in North America, Lesley Nurse.
Dunne has 25 years of experience and joins from BlackRock where she was head of global consultant relations (EMEA) responsible for the development and execution of alternatives strategies for global, local and specialist consultants across the region. She has held various roles at BlackRock focused on alternative investment sales for institutional investors. Michelle also spent time at Credit Suisse, Pioneer Global Investments and Goldman Sachs.
Dik van Lomwel, head of EMEA and Latin America at Neuberger Berman, says: “Investment consultants continue to grow in importance as an increasingly broad set of institutions face complex investment challenges. I am delighted that someone with Michelle’s pedigree and deep understanding of the institutional market is joining our team.”
Dunne says: “Neuberger Berman holds a unique spot in the industry – independent, employed-owned, aligned with clients, focused on ESG and constantly striving to excel. I’m excited to deliver the firm’s diverse and growing platform of liquid and illiquid investment solutions to clients across the region.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsChainalysis adds bitcoin to its balance sheet
Chainalysis, the blockchain data platform, is expanding its long-standing partnership with NYDIG, a technology and financial services firm, to execute a purchase of bitcoin for the firm’s balance sheet.
NYDIG played a critical role in enabling Chainalysis to buy and custody bitcoin, a move that demonstrates Chainalysis’ long-term investment strategy in the cryptocurrency space. Chainalysis has been NYDIG’s compliance technology partner since 2018.
“Our expanding partnership with Chainalysis is a mutually beneficial relationship,” says Patrick Sells, NYDIG Chief Innovation Officer. “Chainalysis has long been building trust in the cryptocurrency ecosystem, and this investment shows their belief that digital assets are a sound investment for the future. We are happy that they trusted our platform to facilitate and carry out their transaction.”
Cryptocurrency such as Bitcoin, Ethereum, Stablecoins and others have emerged as an alternative asset class for consumers, enterprises, governments, banks and financial institutions. Guided by strong confidence in bitcoin, as well as NYDIG’s institutional expertise in trading, execution, and asset management, Chainalysis will acquire a substantial stake of Bitcoin through NYDIG’s brokerage services.
“Chainalysis is laser-focused in our commitment to building trust in cryptocurrency as a digital asset and are thrilled to be adding Bitcoin to our corporate investment portfolio,” says Michael Gronager, Co-founder and CEO at Chainalysis. “With any financial transaction, a level of trust and transparency is necessary. Our longstanding relationship with NYDIG enabled us to invest with confidence, knowing we were dealing with an industry leader. This is Chainalysis’ first acquisition of cryptocurrency and we will continue to pursue other digital assets as potential future investments.”
Maples Group Expands Cayman Islands Funds & Investment Management practice
Caroline Heal has joined Maples and Calder, the Maples Group's law firm, as a Funds & Investment Management Partner in its Cayman Islands office.
Heal brings extensive experience in the structuring, formation and operation of offshore hedge funds, private equity funds and investment fund platforms. She advises a wide range of asset managers and financial institutions and has been recognised for her expertise by The Legal 500.
Heal will be an integral member of the firm's top-tier Cayman Islands Funds & Investment Management team where she will also collaborate closely with lawyers and professionals across the firm's global practices in the British Virgin Islands, Dubai, Ireland, London, Luxembourg, Jersey, Hong Kong and Singapore to service its multinational client base.
Notably, the firm's Funds & Investment Management practice is the largest in the jurisdiction and has steadily grown over the past year with the addition of 10 new Associates, two of whom were previously articled clerks with the firm. In addition to these new hires, the firm also promoted Stephen Watler and Lee Davis to Funds & Investment Management Partners earlier this year, further strengthening its partnership team.
Michael Richardson, head of the Cayman Islands Funds & Investment Management practice, says: "I am pleased to welcome Caroline to the Maples Group. Our Funds & Investment Management team has grown considerably over the past year as a result of increasing demand for our services from global hedge fund and private equity fund clients. The team has also been managing a record number of incorporations and registrations for the jurisdiction while navigating regulatory and compliance requirements. Caroline's addition demonstrates our commitment to providing the highest level of client service to our international clients from a trusted team of experienced lawyers who have deep technical, sectoral and jurisdictional knowledge."
Caroline comments: "I am delighted to join the Maples Group's distinguished Funds & Investment Management practice and I am looking forward to the opportunity to work with the team alongside the industry's leading lawyers, professionals and clients."
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsCboe to acquire ErisX
Cboe Global Markets, Inc (CBOE), a provider of global market infrastructure and tradable products, has entered into a definitive agreement to acquire Eris Digital Holdings, LLC (ErisX).
ErisX operates a US based digital asset spot market, a regulated futures exchange and a regulated clearing house. Ownership of ErisX presents a unique opportunity for Cboe to enter the digital asset spot and derivatives marketplaces through a digital-first platform developed with industry partners to focus on robust regulatory compliance, data and transparency.
Founded in 2018, ErisX was designed and built with regulatory compliance and operational integrity at the fore. Its spot and futures exchanges utilise high-performance infrastructure and real-time market surveillance. Its real-time clearing system is designed to address settlement risk while collateral management helps to allow seamless movement of collateral between spot and futures accounts.
Cboe plans to operate the digital asset business as Cboe Digital. The company has also secured the support of a broad range of market participants, including well-established retail brokers, crypto-leading firms and sell-side banks, who are expected to form a Digital Advisory Committee tasked with advising Cboe on the ongoing development of the Eris spot and derivatives markets. As members of the Digital Advisory Committee, DRW, Fidelity Digital Assets, Galaxy Digital, Interactive Brokers, NYDIG, Paxos, Robinhood, Virtu Financial and Webull are committed to ongoing engagement with Cboe Digital markets. Certain members of the Digital Advisory Committee listed above also intend to acquire minority ownership interests in Cboe Digital and to serve as partners in the growth of the business. Cboe Digital will leverage the engagement and collaboration with these market participants to continue to operate ErisX as a resilient, trusted and transparent digital asset venue.
Ed Tilly, Chairman, President and CEO of Cboe Global Markets, says: “We believe our acquisition of ErisX, coupled with broad industry participation and support, will help us bring the regulatory framework, transparency, infrastructure and data solutions of traditional markets to the digital asset space. ErisX has shown an unwavering commitment to improving spot and derivatives crypto trading, and I am confident that together we can not only meet the growing demand for institutional and retail trading solutions but also push the boundaries of digital asset innovation and unlock its next phase of growth.”
Thomas Chippas, CEO of ErisX, says: “Derivatives are an essential component of a scaled digital marketplace, and Cboe, as one of the world’s largest derivatives exchange operators, has the global customer network, international operations and innovative vision to not only grow ErisX, but the entire digital asset space. With Cboe’s support and network of industry partners, ErisX will enable new and established firms to compliantly and confidently offer cryptocurrency spot and derivative products to their clients, making our transparent and trusted digital asset market the destination of choice for any market participant offering crypto spot or derivative trading services now and in the future.”
Cboe's and ErisX's partners all congratulate the two firms and look forward to working with them collaboratively in the future.
JTC acquires perfORM Due Diligence Services
Professional services firm JTC has acquired perfORM Due Diligence Services (perfORM), a provider of due diligence services to a diverse base of UK and international asset allocators and investment managers.
Launched in 2019, perfORM was set up as an Operational Due Diligence (ODD) business to provide solutions to asset allocators (including pension funds; wealth managers; family offices; fund of funds; asset managers; and endowments) across private credit, private equity, real estate, infrastructure, hedge, crypto and digital assets, and long only funds.
This acquisition forms part of JTC’s ongoing strategy of continuously developing its well-established fund solutions capability to add true value to the expertise and services offered to clients. The addition of perfORM will enhance JTC’s funds offering with solutions-driven due diligence services, supported by vast IP, a highly scalable technology workflow management system and due diligence software. perfORM will retain its brand to uphold their integrity as an independent ODD service provider and will operate as a JTC Group company going forward.
Jonathan Jennings, Group Head of Institutional Client Services, JTC, says: “perfORM is a further important strategic addition to the JTC Institutional Client Services division. Despite only having launched in 2019, perfORM has had impressive growth in their client base, which affirms the demand for due diligence solutions in the market. Adding innovative solutions that address the continually heightened investor and regulatory focus on operational risk and due diligence will be of great benefit to our clients and business alike. We are delighted to welcome our new colleagues to JTC today.”
Quentin Thom, Co-Head of perfORM, says: "We are excited to be part of JTC and our Allocator On-Demand ODD, Investment Manager ODD Therapy, and Service Provider ODD work continues to grow across all asset classes, fund structures and geographies."
James Newman, Co-Head of perfORM, adds: “This move represents an important and exciting step towards our goal of making due diligence services more accessible. With JTC, we will help both asset allocators and investment managers meet their operational risk management needs.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & Transactions AcquisitionsTransparency and trust are a must for meaningful institutional investor crypto adoption
By Mazen Jabban, founder, CEO and chairman, Vidrio Financial – We are still a long way from seeing meaningful institutional investor uptake in crypto and crypto-related offering and something as simple as greater transparency will go a long way to providing the peace of mind institutions need.
Until notable regulatory risks are addressed, and meaningful levels of transparency and understanding are reached, many investors will likely remain on the sidelines.
This August, Vidrio surveyed a wide swath of institutional investors - including OCIOs (17 per cent), asset managers/insurance (33 per cent) and 50 per cent other (family offices and investment consultants) - with over USD100 billion in combined alternative assets under management in both the US and Europe.
We discovered that 50 per cent had zero exposure to any crypto currency or crypto-related currency investments. Moreover, we identified that within Vidrio’s client base itself, investors had a total net exposure of 0.0000015 per cent exposure to crypto coins, exchange traded funds, and other crypto-related investments.
Additionally, since we issued our findings last month, we have witnessed more headlines related to the most popular part of the crypto marketplace, crypto currencies.
These developments related to crypto price volatility and about global regulators, including the Securities and Exchange Commission (SEC), have likely eroded levels of trust and potentially has sparked more reluctance among investors who are more fearful of this emerging asset class regardless of some of the other important elements of the digital marketplace and the evolution of blockchain technologies.
We believe that while the marketplace matures, hedge fund managers looking to attract allocations from institutional investors will need to take several proactive steps including increasing their levels of disclosures and education if they are going to build a level of trust that potentially will be able to convert these prospects into investors down the road.
While the SEC mulls its next steps – which may include bringing some of these digital currencies into line with publicly traded stocks and bonds, including how they are treated from a taxable and wash sale rule perspective - we realise that the whole digital infrastructure that exists today, as part of the decentralized finance movement, is still in its infancy.
It has a long way to go if investors are going to become more comfortable with allocating to digital assets in general.
The biggest sales hurdle we have seen so far for managers pitching institutional investors in this space is not having the appropriate alignment of transparency and risk management systems that will engender further trust and adoption, especially when it relates to crypto-related trading strategies.
While notably two Virginia public pension funds gained access to digital assets through an investment in what it classified as a venture capital fund two years ago have dipped their toes, institutional pickup generally has been limited.
At Vidrio, we are still convinced that there will be winners and losers in the digital assets (crypto) space and the value of trading that strategy, we are concerned that for these cryptos to represent a store of value, similar to gold, much needs to be done on the infrastructure and education side of the ledge to engender meaningful institutional uptake.
Looking to bridge these gaps in the marketplace with our own technology platform, we have divided the crypto and crypto-related market into three areas.
These include pure cryptocurrency trading strategies, digital assets that allow you to transform any asset including non-fungible tokens into a digital format that you can trade without an intermediary, and lastly into strategies related to digital infrastructure that are being created to disrupt existing businesses.
It is worth recalling that back in the nascent days of investing in hedge funds, there are many instances that litter that landscape – including, notably, Amaranth Advisers in 2006 - that illustrate that with each new investment opportunity there are risks for investors to evaluate closely.
If Amaranth’s investors learned one key lesson, as did we at the time, it was that while the returns generated by the manager were headline-making, the transparency and understanding of how those investment returns were being made and the risks the manager was taking could not be realised until the USD9.5 billion hedge fund declared over USD6 billion in natural gas futures losses and subsequently closed.
As with the failure of Amaranth, we believe that investors cannot react to information if that data is not available. In the case of crypto currency and digital assets broadly, we anticipate they will look to firms like ours to do the heavy lifting.
Transparency has been the key demand for institutional investors since the formation of the hedge fund industry and we see this trend remaining firmly in place.
Moreover, just as we have expanded the processes we employ for clients to meet their increased due diligence and transparency needs over the years, we feel there is also a natural crossover as to how institutional investors have increased their demands for more data related to understanding environmental, social and governance (ESG) factors. We see a natural fit with the demands allocators are making for more information in the digital asset space.
In addition to the extra due diligence they are normally seeking on any manager in the ESG space, we see potential allocators needing to do due diligence in other specific areas including how each crypto-related manager is storing its digital assets to its current risk management systems and the security-related protocols it has in place to ensure these digital assets are being stored appropriately.
In closing, on the specific question we asked in our August survey of “Relative to other asset classes, do you think allocating to crypto assets is too risky?” Half (50 per cent) of respondents thought the risk was too high for their portfolios, while 33 per cent were not really concerned but were working closely with their risk teams to make sure they have a sense of the potential risks they’d be taking on.
However, 17 per cent of the investors said they were not at all concerned, and felt that crypto and crypto-related assets were in line with the risk levels of other asset classes in their portfolios.
In our view, these findings show that the majority of investors have yet to reach a level of comfort with this asset class and we believe it will take a lot more education and due diligence work to get to a position where we will see meaningful uptake when basic information is still lacking.
At Vidrio, we always seek to dig deeper for our clients so they can invest with a level of confidence, which is a must when trying to help them meet their long-term investment goals.
Like this article? Sign up to our free newsletter Author Profile Related Topics Digital AssetsBoston-based firm looks to diversify client portfolios and allocate to risk mitigation strategies
US investment consultant, Meketa Investment Group, is looking for hedge fund risk mitigation and diversification strategies, as it looks to de-risk client exposure to directional equities.
Brian Dana, Director of Marketable Alternatives at Meketa, told Hedgeweek: “We’re very significant advocates of risk mitigation strategies. Most of our clients have a very large allocation to directional equities, whether public or private. So, our goal is to make sure that the marketable alternative strategies that we choose benefit the portfolio in multiple ways.”
Dana explained that directionally-orientated strategies, such as directional equity and credit strategies, don’t fit Meketa’s “natural framework,” and so, instead, the firm uses diversifier strategies, such as equity market neutral, global macro, and insurance link strategies, to build robust portfolios for their clients.
Meketa tries to find strategies that react positively when equity markets are negative and looks specifically for strategies that “react instantly”.
The firm uses different risk profiles, including a first responder, a defensive attribute to equity risk; a second responder, used during periods of market stress, such as alternative risk premia investment managers and systematic trend followers; and diversifiers.
Dana stated: “The goal of these strategies is to present an overall profile that supports some sort of risk inside a portfolio.”
He explained that together, “this programme and these strategies are meant to be positive carry, on a relative basis, and provide asymmetry during an equity market sell-off.”
He stated that Meketa spends “the vast majority of its time researching first and second responders, and diversifiers, trying to uncover factors it thinks could be beneficial to those particular components.”
The company’s methods were tested when Covid-19 hit the West in March 2020. Dana described this as “a watershed moment” for Meketa; it was an ultimate test which revealed Meketa’s strategies to be robust.
The firm manages a total of USD1.7 trillion AuA across their 200 clients. In market alternatives, the firm advises on and manages over USD50 billion in assets for approximately 100 clients.
Like this article? Sign up to our free newsletter Author Profile Fiona McNally Employee title Reporter Linkedin Related Topics Funds Investments Markets Risk Management