Hedgeweek Interviews
Bitfinex doubles server capacity
Bitfinex, a digital token trading platform for institutional investors in the bitcoin space, has doubled its server capacity.
Bitfinex has increased the volume of heavy duty servers at its Zug-based data centre amid surging demand to trade digital tokens among hedge funds, institutional investors and family offices. The expansive server capacity provides participants from incumbent markets with a level of service on a par with that provided by major stock exchanges.
The heavy duty computational power available on Bitfinex is enabling funds to translate trading strategies from conventional markets into the digital token space. Funds on Bitfinex are deploying a variety of sophisticated strategies, including High-Frequency Trading (HFT) plays such as statistical arbitrage and volatility arbitrage.
“With today’s increase in server capacity, we’ve beefed up the exchange’s front-end and back-end servers,” says Paolo Ardoino, CTO at Bitfinex. “This doubling of server capacity combined with the improvement to internal networking is likely the biggest upgrade we've had since we moved to our data center. We have an obsessive interest in technical improvement. This is the reason why hedge funds, institutional investors and professional traders are trading with us.”
As a hub for institutional investors in crypto, Bitfinex is providing a variety of proximity hosting services to meet mushrooming institutional demand. The exchange has collaborated with Market Synergy, a bespoke network solution provider, to offer institutional standard cryptocurrency connectivity, including co-location services.
“We continue to provide Bitfinex with institutional calibre digital asset connectivity,” says James Banister, CEO at Market Synergy. “Bitfinex is a recognised market leader and this significant investment in infrastructure reinforces their commitment to the institutional market. They are ideally placed to maintain their market leading position as institutional demand continues to gather momentum.”
HFT firms are able to obtain secure connectivity via a FIX feed or ISP link to Bitfinex’s digital asset gateway. Bitfinex has about 100 HFT firms from conventional financial markets active on the platform, which began taking out co-location services in 2018 when Bitfinex moved its core infrastructure from a cloud provider to a dedicated datacenter.
Piper Sandler to acquire Cornerstone Macro
Piper Sandler Companies is to acquire Cornerstone Macro, an independent research firm that offers macro research and equity derivatives trading to institutional investors.
Upon closing, Cornerstone Macro will continue providing its research as Piper Sandler & Co’s macro research team.
Founded in 2013, Cornerstone Macro brings 50-plus professionals, including 21 research analysts, to Piper Sandler. Cornerstone Macro produces high quality, thought-leading macro, thematic and quantitative research on global economics, fiscal and tax policy, monetary policy and global asset allocation, portfolio strategy, energy and renewables, and technology. In addition, Cornerstone Macro’s options strategy team provides industry-leading derivative strategy and trading. Cornerstone Macro develops and connects macro insights from around the world, delivering a comprehensive overview of important global trends. The synergy between their teams allows them to generate unique global findings and ‘connect the dots’ for institutional investors to generate alpha. Cornerstone Macro serves clients across the globe with offices in New York and Washington, DC.
Since Cornerstone Macro’s founding eight years ago their research teams have consistently ranked in the top three annually in the Institutional Investor All-America Research Survey.
Co-founder Nancy Lazar, based in New York, NY, leads the economic research team and has been an Institutional Investor-ranked economist for the past two decades, ranking in the top two all the past eight years at Cornerstone Macro.
Co-founders Andy Laperriere, head of US policy research, and Roberto Perli, head of global policy research, both based in Washington, DC, ranked No1 in the Washington Research Team category for five out of six years while at Cornerstone Macro. Andy ranked No. 2 as an individual in the Washington Research category the past two years.
Michael Kantrowitz, head of the portfolio strategy team and based in New York, NY, ranked in the top three in 2020.
“Cornerstone Macro’s world-class research team with over 260 years of combined experience offers our clients market-leading macro insights and analysis of global trends,” says Deb Schoneman, president of Piper Sandler. “They also bring a deep expertise in equity derivatives strategy and trading that will further strengthen our product offerings.”
Nancy Lazar, co-founder and chief global economist of Cornerstone Macro, says: “The partnership with Piper Sandler will complement our existing business and provide our clients with an industry-leading trading desk and one of the largest and most experienced distribution teams on Wall Street.”
Piper Sandler has heavily invested in deep sector expertise across equity research and institutional sales and trading. The firm increased research headcount by 84 per cent over the last two years with the addition of Sandler O’Neill and Cornerstone Macro. The research team currently covers over 1,000 companies and ranks No1 in total names under coverage in the SMID cap category, making Cornerstone Macro an ideal complement to the single stock coverage platform.
“The acquisition of Cornerstone Macro is a significant step toward our goal of building a durable $200 million non-deal equities business with opportunity to grow over the long-term,” says Michael Cox, co-head of global equities at Piper Sandler.
“We are excited to welcome the macro sales specialists to our existing large and fully integrated specialty sales team. The combination represents a significant opportunity to offer clients of both firms a broader range of expertise and product capabilities,” adds Tom O’Kane, co-head of global equities at Piper Sandler.
The transaction is expected to close in the first quarter of 2022 and is subject to customary closing conditions.
Piper Sandler was advised by Faegre Drinker Biddle & Reath LLP. Katten Muchin Rosenman LLP and Berkshire Global Advisors served as advisors to Cornerstone Macro in connection with the transaction.
Like this article? Sign up to our free newsletter Author Profile Related Topics Services Research & AnalyticsOptions appoints former Fixnetix Executive as Chief Risk Officer
Options, the provider of managed trading infrastructure to the global Capital Markets, has appointed Marlena Efstratopoulou to Chief Risk Officer (CRO) and the Principal leading the firm’s “Security as a Service” business.
Efstratopoulou joined Options in April 2021 with nearly a decade of industry experience from DXC Technologies, HPE, and Fixnetix. As Chief Information Security Officer with Fixnetix she led them to SOC2 accreditation, alongside developing and coordinating the delivery of their Managed Security Services offering.
As CRO, Efstratopoulou has responsibility for Options' Security as a Service offering and will be at the forefront of Options' Managed Security solutions, providing industry-leading end-to-end security across all product lines. Efstratopoulou will provide clients with a tailored, bespoke solution to enhance their security profile through risk and compliance management to both Options' and industry-standard regulatory frameworks.
Danny Moore, Options President, and CEO says: "Marlena joined the team earlier this year with a depth of knowledge and expertise in cybersecurity which has already benefited the firm and our clients. We are excited for her to continue her work, alongside Options product and security teams, developing an over-arching solution to ensure clients receive a best-in-class security service."
Speaking on her promotion, Efstratopoulou adds: "I am delighted to take on this role within Options. The firm's exceptional commitment to client security is evident having worked with the security and product teams over the last few months. I have specialised in risk and compliance for the duration of my career, and I look forward to using this experience to benefit Options clients further."
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsOptiver launches Principal Strategic Investments
Optiver, a global market maker, has launched its corporate strategic investment initiative, Optiver Principal Strategic Investments (PSI).
For more than 35 years, Optiver has been committed to improving global financial markets at every stage, for all parties involved. Through Optiver PSI, the firm seeks to build upon this mission by partnering with entrepreneurs shaping the financial markets of the future.
Historically, Optiver has been focused on its core activity of making markets in listed derivatives and equities. Through pricing, execution and risk management, the firm’s 1300+ employees have remained steadfast in their shared commitment to improving the market. In recent years, the company has become increasingly outward looking throughout its global expansion. Optiver Principal Strategic Investments is therefore a natural evolution of the firm’s mission to shape financial markets of the future at increasing scale.
“More than ever before, Optiver is taking a proactive approach to seeing how partnering with external entrepreneurs and founders can further our overall mission to improve the markets,” says Jan Boomaars, Optiver Group CEO. “We are eager to discover and support the most innovative and impactful projects – not only in finance, but also in IT, blockchain and beyond. Our goal is to provide long-term guidance, mentorship and resources from true industry veterans.”
Citco works with AWS to complete USD1tn cloud migration in alternative investment sector
The Citco group of companies (Citco) has completed the migration of USD1 trillion worth of assets under administration (AUA) onto the newest version of Æxeo running on Amazon Web Services (AWS), in one of the largest accounting transitions in history, and the largest within the alternative investment sector.
Citco, the global asset servicer to the alternative investment industry, has moved all its clients using Æxeo – its straight-through, proprietary front-to-back office solution – from its physical data centers to AWS over the past 18 months.
The move means all of Citco’s hedge fund and hybrid clients now have a secure cloud service, which streamlines the administration of their portfolios. In total, Citco has migrated more than 550 clients to AWS, including 10,000 accounts and some 1.2 billion orders.
The move to AWS gives Citco the ability to move to agile development of Æxeo for clients and, as such, will allow clients on Æxeo to leverage a variety of critical capabilities and services within the cloudbased Æxeo ecosystem.
Albert Bauer, Managing Director Citco Fund Services (USA) Inc, says: “We are delighted to have collaborated with AWS to complete this latest milestone for Citco’s clients, providing them with an integrated cloud solution. The migration of such a vast number of clients is a large undertaking for any business, and our success is testament to the hard work and dedication of our team in completing what has been a historic accomplishment.”
“The investment management industry is turning to AWS, leveraging our global infrastructure and proven capabilities to drive efficiency across their business, and deliver fast, reliable, and innovative services to clients at scale,” says John Kain, Worldwide Business & Market Development for Banking and Capital Markets, Amazon Web Services Inc.
“We are thrilled to support The Citco group of companies to complete one of the largest asset management migrations to date, and we look forward to collaborating on the next phase in their journey.”
This latest technological development from Citco follows numerous advancements across the business. This includes the creation of Æxeo Treasury™, Citco’s software-as-a-service (SaaS) offering.
Æxeo Treasury is a born-in-the-cloud solution that gives alternative fund managers a state-of-the-art method of managing treasury functions through a SaaS tool running on AWS.
Æxeo, which launched in 2002, allows clients of Citco to use a single database for all activities, including order capture, position and P&L reporting, and accounting. In June alone, clients on Æxeo ran 430,000 Active P&L reports, while Æxeo Reporter™ was run 1.4 million times.
Bauer adds: “Technology is transforming the fund administration industry, and Citco will always strive to deliver the very best solutions for our clients as we look to support their businesses and ambitions.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & TransactionsVTB Group establishes climate finance and carbon trading business
VTB Group is launching a new business line that will focus on climate finance and carbon market operations both in Russia and internationally.
Vladimir Litvak, who has over 25 years’ of experience in green financing and carbon trading markets, will head up the newly formed division.
This business line will build on VTB Group’s ability to finance major projects and expertise in commodity markets with a focus on the following areas:
• Raising financing in Russian and international markets for Russian companies to execute ESG projects aimed at reducing emissions, providing greenhouse gas capture and storage, introducing low-carbon technologies, promoting climate change adaptation, as well as undertaking transactions in the carbon market
• Client operations in international carbon trading markets, emissions trading systems, including risk management
Providing a full range of financial products to reduce carbon footprint of exports and products made by Russian companies.
Vitaly Bouzoveria, Head of VTB Credit Department, says: "VTB Group has been proactive in developing our ESG financing offering, and the launch of a this new business line is another step towards expanding our presence in this important sector. We offer our clients a wide range of ESG financial instruments and services, and we are seeing growing demand from them. Carbon markets have already proven to be effective in reducing greenhouse gas emissions and channelling funding into the most efficient projects and technologies. The evolution of these markets will be a major factor in the low-carbon development of Russia, the implementation of the Paris Agreement and the achievement of the Sustainable Development Goals.
"We believe that it will be impossible to achieve decarbonisation of the economy and society without a significant increase in the turnover of the global carbon markets. VTB is actively developing products and infrastructure to launch operations in the carbon markets as soon as feasible."
Previously, VTB and the Moscow Exchange agreed to partner in the development of a carbon unit trading market by establishing the foundation for the regulatory framework and requirements for trading greenhouse gas emissions quotas, as well as green certificates aimed at the reduction of Russia’s carbon footprint.
Hedge funds count the cost of September slide
Hedge funds’ overall momentum in 2021 has been halted, with managers across a range of strategy classes left counting the cost of September’s bumpy equity and credit market reversal, new industry data published this week shows.
On average, hedge fund managers have made gains of more than 8 per cent since the start of this year – but last month’s market turbulence saw most strategy sub-sectors slide into the red, according to separate performance data released by eVestment and BarclayHedge.
Major equity and credit markets endured a “bumpy” September, said Peter Laurelli, eVestment’s global head of research, which took a toll on the broader hedge fund business.
“This is a dramatic change from August of this year, when more than 67 per cent of funds reported positive returns,” said Laurelli.
Commodities-focused hedge funds were big performance winners in September, up 1.59 per cent on average, according to eVestment metrics, with their year-to-date returns now standing almost 18 per cent.
On the flipside, event driven activist strategies suffered the biggest blow, sliding some 2.75 per cent for the month. However, this sub-sector remains up almost 20 per cent for the year, eVestment’s data shows.
Elsewhere, equity-focused hedge fund managers tumbled 1.35 per cent – with technology, financials and healthcare-focused long/short managers all down - though overall this group remain up for the year at around 10.45 per cent. In contrast, energy-focused equities hedge funds were up 1.85 per cent, and have now advanced 22.45 per cent year-to-date, eVestment said.
“The dispersion of returns in September was the largest since March of this year, which means there were still many funds within various segments and categories we track that performed well during the month,” Laurelli observed.
Meanwhile, BarclayHedge’s Barclay Hedge Fund Index – which measures the average returns of 1,863 hedge funds in total – remains up 8.74 per cent year-to-date, having retreated 1.22 per cent during the recent turbulence.
“September is historically a slippery period for equity markets, and this year contributed to its lore,” Ben Crawford, head of research at BarclayHedge said of the reversal, which saw 22 of the 30 hedge fund subsectors tracked in the Barclay Hedge Fund Indices slide into the red for the month.
Barclay’s Distressed Securities Index was up 1.91 per cent for the month, while its Emerging Markets Eastern Europe Index advanced 1.23 per cent. Other September gainers included the Emerging Markets Global Fixed Income Index, up 1.09 per cent, the Convertible Arbitrage Index, returning 0.87 per cent, and the Merger Arbitrage Index, gaining 0.35 per cent.
“The industry brought the ‘hedge’ of their namesake and outperformed the S&P 500 index, which posted its worst monthly loss since the start of the pandemic,” Crawford added, noting the S&P 500 Total Return Index’s 4.65 per cent loss in September.
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 FundsAIMA premieres a new alt investments TV programme in partnership with ITN Productions
The Alternative Investment Management Association (AIMA) and ITN Productions are collaborating to raise awareness of alternative investments and the latest sector innovations that are benefitting investors, markets, and supporting the global economic recovery.
In the face of unprecedented global disruption arising from the coronavirus pandemic, assets under management for the alternative investment industry continues to break new records with funds under management standing at US$15 trillion globally; approximately 15% of the world’s asset management industry.
Hedge funds are the face of alternative investments in public markets. The 12 months after the initial period of COVID-fuelled market disruption saw the industry report solid returns with leading hedge fund indices up over 32%. Strong performance has continued into this year with the industry up 13% as of the end of August . This performance has not gone unnoticed by investors who are reinforcing their interest in alternative investments, investing in both public and private markets as they seek diversification away from low-interest rate bonds and high-value equities.
Anchored by ITN productions, ‘Holding Strong – Alternative Investments in a Volatile Market’ shows how the alternatives investment industry is growing in influence, highlighting its increasing value to investors, markets and the global economy.
ITN presenter Belle Donati is joined by Jack Inglis CEO of AIMA, the global representative for the alternative investment industry, to discuss how the alternative investment industry benefits investors and supports the global economy, where he sees the industry heading as well as AIMA’s quest to educate the broader industry on the importance of alternative investments.
Produced in a news-style format featuring interviews with industry leaders, the programme offers a series of sponsored editorial profiles filmed on location with AIMA’s global members and partners, including some of the most prominent names across the alternatives investment sector.
One of the themes this programme explores is the rise of responsible investing, which is examined from several angles. Apex Group quantifies how the ESG market continues to mature and become more defined, while abrdn explains how it’s investing responsibly in real assets to deliver positive outcomes that benefit its clients, society and the wider world.
Taking a global viewpoint, Reed Smith examines how the pandemic has accelerated the global focus on sustainability, and Esmo Asset Management highlights the complexities of applying ESG in emerging markets where each country and region is uniquely vulnerable to E, S and G factors.
Complementing these discussions, haysmacintye addresses how the industry is fostering diversity and inclusion to attract the next generation of talent.
Elsewhere, Man Group CEO Luke Ellis talks about the group’s growth and resilience during what he described as a “challenging environment” in 2020. We find out where this resilience comes from and how it is manifesting across the industry.
In a similar vein, Citco offers an insight into the technologies that are driving the alternative investment industry forward, making it more transparent and accessible, while Securis Investment Partners details the latest innovations in the insurance-linked securities market in recent years.
Jack Inglis, CEO of AIMA, said: “The alternative investment industry has doubled in size over the past 10 years with most projections stating it will grow further in size and influence. The benefits of investing in alternatives are increasingly clear across the world, providing investors with much-needed diversity in their investment options, benefitting them and the global economy. We’re delighted to be able to work with ITN Productions to highlight the benefits of the alternative investment industry and showcase its crucial role in protecting savers and financing the economy.”
Tom Kehoe, global head of research and communications at AIMA, added: “It has been a real pleasure to work with ITN Productions on this programme. AIMA is the global representative of the alternatives investment industry, and I am very pleased that we have been a part of this co-production to share real-life examples as to how the industry continues to grow in influence making a positive impact at a local and global level. Many thanks to all the programme’s participants who shared their stories with us.”
Nina Harrison-Bell, head of ITN Productions Industry News, said: “We’re delighted to be producing a programme that raises awareness of alternative investments, de-mystifies the myth that alternative investments are exclusive to the mega-rich and recognises the sector’s role in aiding economic recovery.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Education & TrainingLivermore Investments Group anchors latest USD500m CLO by Ares Management
Livermore Investments Group, a leading Collateralised Loan Obligations (CLO) equity anchor investor in over USD13 billion of new issue CLO transactions, has anchored the majority equity stake in Ares 61 - Ares Managements’ latest USD500 million CLO which closed on 30 September 2021.
The transaction, arranged by Nomura Securities, priced with a competitive weighted average cost of debt of Libor + 1.61 per cent. The CLO has a five-year reinvestment period and will be managed by Ares Management, one of the largest and most experienced CLO managers, with over USD28 billion of CLO AUM. Livermore’s controlling equity also comes with the options to refinance the debt or reset the CLO to enhance value, as it has done across other CLO positions on several occasions this year.
This latest move from Livermore follows its recent co-investment in Blackstone’s USD650 million Peace Park CLO and signals the continuation of the management team’s accelerated transaction schedule and its active CLO deals pipeline.
Livermore Investments Group, which has anchored over 25 new issue CLOs over the last decade, is one of the leading CLO investors in the primary market, where it leverages its strong relationships, deep expertise and large size to negotiate non-mark-to-market longer maturity warehousing terms and deeply discounted equity prices.
Livermore’s management team is led by industry veterans Ron Baron and Gaurav Suri, under which Livermore Investments Group has achieved gross IRRs in excess of 20 per cent over the last ten years. The Group also recently reported an increase of over 18 per cent on the CLO-related portfolio in its first half 2021 results.
Gaurav Suri, investment manager at Livermore Investments Group, says: “CLOs are finally being recognised as a mainstream asset class following their resilient performance through several credit cycles, including the turbulent Global Financial Crisis and the ongoing Covid-19 pandemic. The projected low-default environment combined with investors’ strong desire for yield is an attractive backdrop for new-issue CLO equity. Its high cash-on-cash return profile shortens the investment duration and its long reinvestment period allows CLO managers to add value from bursts of volatility.”
INDOS Financial expands services with Specialised Depositary licence in Ireland
INDOS Financial (Ireland) Depositary Limited, a JTC Group company, has received regulatory approval from the Central Bank of Ireland to provide depositary services to private equity, real estate and other alternative investment funds under Regulation 22(3)(b) of Ireland’s AIFM Regulations.
The approval builds upon INDOS’ alternative investment fund depositary offering in the UK providing full depositary and depositary-lite services to 75 managers, 150 funds and USD38 billion of hedge, private equity, real estate and infrastructure funds.
Bill Prew, CEO of the INDOS Financial Group, says: “We are delighted to have obtained a specialised depositary licence in Ireland. We established operations in Co. Wexford, Ireland in 2014 and therefore, extending our services to act for Irish alternative investment funds was a natural next step.
“We are starting to see a number of managers establish private equity, real estate and other alternative asset funds in Ireland following the introduction of the Investment Limited Partnerships Act in 2020. We are excited to bring the INDOS depositary model, where we provide a depositary solution that adds value and enhances fund governance, to this growth area of the Irish funds market.”
The Irish office of Simmons & Simmons advised INDOS Financial on the licensing and approval process with the Central Bank of Ireland.
Like this article? Sign up to our free newsletter Author Profile Related Topics ServicesBlackstone appoints Senior Managing Director, Strategic Relationships
Blackstone has appointed Emily Yoder as Senior Managing Director, Strategic Relationship Management.
She will serve as a primary interface with Blackstone’s banking and other financial services partners. In this newly created role, Yoder will be responsible for delivering a firm-wide approach to relationship management.
Vik Sawhney, Chief Administrative Officer and Global Head of Institutional Client Solutions, says: “We’ve known Emily for many years, and I’m very excited to welcome her to the Blackstone team. Her skills will help us deepen our relationships with key financial partners as we continue to rapidly expand into new verticals.”
Yoder says: “I’ve grown to know Blackstone during my tenure in the financial services industry and am thrilled to be joining the firm during a time of rapid growth. I look forward to partnering with the leadership team to deepen our banking relationships and provide capital solutions as the business expands.”
Before joining Blackstone in 2021, Yoder worked at JPMorgan as a Managing Director in their Senior Relationship Management team, focusing on hedge funds and alternative asset managers. Yoder started her career in trading for JPMorgan, and was a founding member of the Emerging Markets Eurobond Trading team at JPMorgan in London. Yoder was the primary risk taker focusing on FX, Cross-Currency Swaps, and Local Market government bonds in CEEMEA & Latin America. Yoder graduated from Rice University in Houston, Texas with a BA in Mathematical Economic Analysis and Latin America Studies.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsHedge funds diversifying their strategies, but slower to adopt AI and ESG, says EisnerAmper survey
While long/short and global macro strategies continue to be hedge funds’ bread and butter, one-third of respondents to a new survey of 184 alternative investment professionals by advisory and accounting firm EisnerAmper expect LPs to increase investment allocation to event-driven in the next 12 months, followed by credit (25 per cent) and quant (17 per cent).
The high number of corporate actions throughout the year, including mergers and acquisitions, restructurings and the rise of the retail investor, could explain the increased interest in event-driven strategy. When asked to name the top challenge for their business, hedge fund executives noted escalating regulatory scrutiny and compliance obligations (30 per cent) followed by increases in capital gains tax rates (27 per cent).
EisnerAmper’s survey also found that hedge funds are slower to adopt artificial intelligence and machine learning to make investments or trades, with 85 per cent of respondents stating that their hedge fund does not utilise these tools. ESG implementation follows a similar trend. Just 17 per cent of executives noted that their company has an ESG portfolio, similar to the number of executives who said so in last year’s survey.
“There was a resurgence of investor interest in hedge funds this year propelled by global growth, fiscal stimulus and low interest rates,” says Cogan. “We’re continuing to see investors deploy more capital to the asset class to diversify their portfolios and generate returns.”
Foreside bolsters private fund practice for hedge funds, private equity firms and digital asset managers
Foreside Financial Group, LLC (Foreside), a provider of governance, risk management, and compliance (GRC) solutions and technology offerings to clients in the global asset and wealth management industry, has bolstered its private funds practice.
This includes an expansion of dedicated personnel, enhancements to its technology platform, as well as the launch of a sub-practice dedicated to fund managers with investment strategies focused on cryptocurrencies, digital assets, venture capital studio funds, health care royalties, syndicated venture, and other alternative, non-conventional assets.
Foreside is responding to the market’s rising demand for experienced consultants enabled by technology whose focus is on the increasingly striated alts market. Foreside’s dedicated private funds team is composed of former securities attorneys, regulators, CCOs, and more, bringing a wealth of knowledge and industry expertise to the practice.
“Private fund advisors, including hedge funds and alternative investment managers, face continued regulatory scrutiny related to compliance and risk management,” says Mark Alcaide, senior managing director at Foreside. “Firms rely on Foreside not only to meet current requirements, but also to anticipate emerging regulatory and marketplace developments. Foreside provides private fund advisors with compliance, operational support and strategic advice to thrive in today’s complex regulatory environment.”
US equity investor sentiment lifts from lows in October but caution persists amid concerns over policy and politics
US equity investors’ risk appetite has picked up in October from the one-year survey low seen in September, but remains subdued compared to earlier in the year as investors cite concerns over the political environment and perceive waning equity market support from monetary and fiscal policy.
The Risk Appetite Index from IHS Markit’s Markit’s Investment Manager Index™ (IMI™) monthly survey, which is based on data from around 100 institutional investors, has risen to +7 per cent in October from +1 per cent, but that compares with a peak of +54 per cent back in April to signal an ongoing cautious mood.
Some improvement in near-term returns is anticipated, however, boding well for the market heading into November. The survey’s Expected Returns Index had fallen to -12 per cent in September, presaging a period of US equity markets trending lower, but has now risen to +5 per cent, its highest since June and meaning more investors see returns rising in the next 30 days than anticipate a decline.
The improvement hints at investors taking advantage of lower prices, which is corroborated by signs of fewer concerns over valuations in the October survey. Despite easing, worries about valuations nevertheless remain the biggest perceived drag on the market in October, followed by the political environment, which has become more of a perceived detriment. Political concerns are linked to worries over the debt ceiling in the US, increased regulation and geopolitical uncertainty, notably in relation to China.
However, when comparing how the perceived drivers have changed over the past year, it is central bank policy that has seen the largest pull-back in sentiment, falling even further in October to hit a new survey low. Similarly, investor perceptions of how government fiscal policy can help drive the market have also fallen to a new survey low and – like monetary policy – is seen as providing only marginally positive support to US equities over the coming month.
Views on the extent to which the domestic and global macroeconomic environments will help drive market returns have likewise been pared back markedly compared to the strong contributions to returns seen earlier in the year.
Shareholder returns are meanwhile considered the strongest driver of the market over the coming 30 days for the second month running, followed by equity fundamentals.
The positive views on shareholder returns, which hit a survey high in October, have played a role in driving financial socks to the top of the sector preferences for the next 30 days, followed closely by energy names. The outlook for the latter has also been buoyed by recent surging spot prices for energy.
An easing of COVID-19 worries has, however, driven sentiment lower for healthcare and consumer staples.
The outlooks for industrials and consumer discretionary stocks have meanwhile fallen to the lowest yet recorded by the survey, in part reflecting ongoing concerns over supply chains and the macroeconomic outlook.
However, it was the tech sector which saw the biggest negative change in outlook in October compared to the prior survey, with sentiment down to the lowest since May.
This subdued level of risk appetite evident in October compared to earlier in the year corresponds with a marked pull-back in investors’ expectations of year-end equity market performance over the past six months. While the US is seen to be the best performing equity market in 2021, followed by Japan and the EU, sentiment towards all three has fallen compared to April. The UK market’s expected performance has meanwhile slipped behind the other developed markets, while investment managers have now taken a bearish view towards China and, to lesser extents, Latin America and the rest of Asia.
The pull-back in year-end expectations for equities and recent rise in commodity prices means commodities have now overtaken equities as the broad asset class that investment managers are most bullish about, while survey respondents continue to hold bearish views towards corporate credit and sovereign debt.
Comments
Commenting on the survey, Chris Williamson, Executive Director at IHS Markit and report author, says: “Investor sentiment has lifted from the low seen in September, which presaged a pull-back in the US equity markets, so this bodes well for the market as we head towards November. There an element of buying-the-dip, but clearly the mood is much more cautious than earlier in the year, with investors concerned about the Fed taper, the macro environment, supply chains and fiscal policy. Poloitical worries – both domestic and international – are also mounting, putting pressure on risk appetite.
“Year-end expectations have also been scaled back markedly compared to earlier in the year. Though the US remains the most favoured equity market, with China seeing especially bearish sentiment, it is commodities that are now seeing the most bullish outlook.”
Also commenting on how the survey results compare to trade settlement data, Kevin Roy, VP of IHS Markit’s Global Issuer Solutions, says: “Our analysis of over USD21 trillion in US equity trade settlement data continues to align with the results of the IMI monthly survey. As US equities closed September lower, we witnessed a shift in bias towards net buying during the final week, particularly among hedge funds. Notably, hedge funds were on the opposite side of the Financials trade from institutions, rotating capital into the sector while their institutional counterparts were selling. On the other hand, institutional investors were buyers of Energy while hedge funds reduced exposure.”
ProMEX selects Exberry as core matching engine for digital marketplace for physical commodities
Exberry, an exchange technology pioneer, is providing its “Marketplace as a Service” technology at the heart of ProMEX, the digital marketplace for physical commodities.
The new technology partnership will enable ProMEX to create new products and markets at speed, and securely offer trading in a wide variety of commodities in new ways.
ProMEX delivers an end to end digital experience in physical commodity trading. The platform provides direct, real-time trading without intermediaries or clearing houses and eliminates settlement risk for its users. This shortened settlement cycle also reduces counterparty risk. Exberry’s matching engine is central to this process.
The way most commodities are currently traded is rather traditional - a bilateral negotiations process which is opaque and inefficient. At the same time, many small and medium size commodity firms and investors are not familiar with risks associated with commodity futures markets. ProMEX brings simplicity and efficiency to trading such commodities, all from an intuitive mobile application.
ProMEX’s new marketplace is now live with its first commodity Moutai, the national wine of China. Users can buy, hold, sell, make or take delivery in Moutai, without having to organize logistics or set up a storage facility. Users can simply download the app from their preferred app store to join the platform. ProMEX will develop other physical commodities including “green” products to promote sustainability among the relevant industry users.
The flexible modular structure of Exberry enables clients to rollout marketplaces at speed and global operations to be run from a single location. Exberry’s easy to integrate “Marketplace-as-a-Service'' with its matching engine at the heart, allows ProMEX and their users to reap the full benefits of the exchange-grade trading solution, rolling out new services and markets at speed.
Mark Ho, Co-Founder & CEO of ProMEX, says: “Exberry has allowed us to go from idea to working platform in a matter of weeks. The marketplace as a service concept is so well executed that we had a conversation in the morning, and a developer was working on the system that afternoon.”
Commenting on the announcement, Magnus Almqvist, Head of Exchange Development, says: “Collaboration and innovation are fundamental to Exberry, and our native SaaS solution helps bring innovation to the market. We are very excited to work with a visionary firm like ProMEX to create a new peer-to-peer marketplace with enhanced price discovery solutions. As ProMEX continues to add new commodities for trading to the platform, Exberry can help them deliver new customer experiences and easily scale as they grow.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Commodities & Resources Trading & ExecutionMan Group’s funds under management reach new high in Q3
Man Group’s funds under management reached a new high of USD139.5 billion during the third quarter, fueled by positive inflows and strong investment performance, with its hedge fund and alternative strategies driving growth.
The London-based publicly-traded investment management giant – often considered a bellwether for the wider UK hedge fund industry – attracted net inflows of USD5.3 billion and positive investment returns of USD400 million, which outweighed negative FX and other impacts of USD1.5 billion stemming from a stronger US dollar particularly sterling and the euro.
Overall, Man added USD4.2 billion to its FUM in the three-month period to the end of September, bolstering the USD135.3 billion recorded the previous quarter.
In Man Group’s Q3 results statement on Wednesday, CEO Luke Ellis said: “We see positive momentum continuing into the fourth quarter, with a high level of client engagement on a number of larger institutional mandates across our systematic long-only and multi-manager strategies.”
The group’s alternative funds under management – which includes absolute return, total return and multi-manager solutions – grew to USD88.6 billion during the third quarter of 2021, up from USD84.2 billion at the end of Q2. This was fueled by USD5.1 billion of investor inflows coupled with USD500 million of performance gains, against negative FX and other movements of USD1.2 billion.
Meanwhile, Man’s long-only strategies shrank slightly in the three-month period, from USD51.1 billion to USD50.9 billion, as USD200 million of investor inflows were outweighed by investment losses of USD100 million, and USD300 million of negative FX and other movements.
Within Man’s alternatives range, its absolute return strategies – managed under the AHL and GLG brands – rose from USD38.3 billion at the end of Q2 to USD39.9 billion in Q3. Total return strategies – spanning alternative risk premia, private markets, CLOs and emerging market total return funds – increased from USD32.5 billion to USD34.6 billion over the same three-month period. Multi-manager solutions also grew, from USD13.4 billion at 30 June to USD14.1 billion as of 30 September.
Performance-wise, the GLG Alpha Selective Alternative strategy led the group’s hedge fund offerings, gaining 3.8 per cent. AHL Evolution rose 3.6 per cent, with the GLG European Long/Short Fund up 1.9 per cent and GLG Global Credit Multi-Strategy adding 1.2 per cent. On the downside, AHL Diversified lost 2.9 per cent, AHL Alpha fell 1.2 per cent, and AHL Dimension dipped 0.2 per cent.
Elsewhere, AHL TargetRisk added 3.7 per cent, Alternative Risk Premia grew 1.2 per cent, and the GLG Global Emerging Markets Debt Total Return was up 0.3 per cent. FRM Diversified II gained 2.8 per cent.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Funds Investments Investing in Hedge FundsAmbienta X adds two to team
Ambienta SGR, one of Europe's largest asset managers entirely focused on environmental sustainability, has added two new hires to its London-based Public Markets division, Ambienta X, which launched Alpha X the world's largest long/short equity fund focused solely on environmental themes, in May 2020.
Alpha X, which invests in sustainability champions and shorts franchises disrupted by sustainability trends, is about to launch several new strategies with the same thematic focus, building on the continuous expansion of the research and investment teams. The further strengthening of the London team, with the arrival of Sofia Savvantidou and Oliver Wegener, is the result of such forward-looking approach.
Prior to joining Ambienta, Savvantidou was Head of the Exane BNP Paribas Utilities & Renewables Equity Research Franchise. She led the team to five consecutive No1 rankings in the Extel and subsequent Extel Institutional Investor surveys. Previously she was head of utilities equity research at Citi where she worked for seven years. Savvantidou started her career in JPMorgan as equity research analyst for the utilities sector.
Wegener was the head trader at Sator Square Capital, where he worked alongside COO, Robert Moore. He has previously worked for nine years at Goldman Sachs, as head portfolio manager of option strategies in private wealth management for EMEA and Asia. Prior to that, he traded options for the award-winning hedge fund Trafalgar Asset Managers. Wegener began his career in risk analysis before moving into trading.
Nino Tronchetti Provera, Managing Partner and Founder of Ambienta, says: “Since its foundation in 2007, Ambienta has been continuing to grow and invest in its people. It is a matter of pride for us to witness first-hand how talents recognise and choose Ambienta as the place to be, while aiming to continue to attract and retain exceptional people. In my opinion, it is not only the authenticity of the sustainability focus and the excellent financial performance, but is closely linked to the culture and the ambition to contribute to the building of a global leader.”
Fabio Pecce, Co-Founder and Chief Investment Officer of Ambienta X, adds: “I am very excited to welcome Sofia and Oliver to the family. Their experiences, qualities and values will surely enrich the thriving working environment created by the whole team to date. It is a testament to our commitment to attracting top talents, great people with a sense of purpose and a real passion for constant improvement, paramount in pursuing the journey ahead.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsSatuit Technologies by Tier1 Financial Solutions partners with Versoft Consulting
Satuit Technologies by Tier1 Financial Solutions (Tier1), a global specialist in CRM, AML compliance and fraud prevention solutions, has partnered with Versoft Consulting to bring enhanced integration to the Satuit product suite and portfolio accounting solutions.
The partnership extends Satuit’s offerings to their asset management client base, aimed at increasing functionality and lowering costs by enabling integrated up-to-date client data.
Satuit is leveraging the integration capabilities of Versoft Consulting's VAAS CONNECT suite to allow a fluid conversation to occur between the Satuit product suite and a wide range of portfolio accounting systems. Satuit will host the data in its cloud application making it accessible to users on both desktop and mobile devices.
“As the financial industry becomes increasingly data-driven, it can be incredibly difficult and time consuming for relationship managers to sift through vast amounts of information to identify actionable insights,” says Matt Braman, Manager of Custom Solutions at Versoft Consulting. “Our partnership with Satuit aims to address these issues by delivering investor portfolio data directly into the CRM or Investor Portal, greatly improving workflow efficiency.”
Satuit has made several enhancements to its product suite to make it easier for users to uncover these insights including a new user interface with dashboard charts, administrator functions, and form rule management. Its API offering was also extended, allowing clients to easily capture critical updates and trigger downstream processes via their workflows. Subscribing to Versoft Consulting’s service suite, VAAS CONNECT, to enhance CRM and portfolio accounting integrations is just the latest move to improve client experience.
“Over the past couple of years, we have seen firms increasingly leverage CRM to not just organise client data and track opportunities, but also to manage investor data for insights,” says Manish Patel, Chief Operating Officer, CRM at Tier1. “By working with Versoft Consulting, we are able to deliver consolidated, insight-driven investor information in one solution that can be securely accessed anywhere.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & Transactions Technology & SoftwareComplysci adds two to Board of Directors
ComplySci, a provider of regulatory technology and compliance solutions for the financial services sector, has added two new members to its Board of Directors – David Eisner, a former senior US Treasury official, past ComplySci executive chairman, successful technology investor and executive, and Sari Granat, Executive Vice President, Chief Administrative Officer and General Counsel for IHS Markit, a publicly traded provider of market intelligence, analytics and technology.
Eisner and Granat bring added experience, expertise, and leadership to the board, which in August added Smarsh Chairman and Founder Stephen Marsh and FMG Suite Chief Marketing and Experience Officer Susan Theder following K1 Investment Management's USD120 million strategic investment in company.
Amy Kadomatsu, CEO of ComplySci, says: "As an organisation, we are truly gratified to welcome two more board members with the long-standing executive experience and intellectual gravitas of David Eisner and Sari Granat. Both seasoned leaders who have overseen the growth of nascent technology companies into highly valued, well respected technology giants, David and Sari are joining ComplySci at a pivotal moment in the company's history, when our automated employee compliance solutions have never been more necessary for private equity firms, hedge funds, broker dealers and other financial services institutions. Their guidance will be a crucial asset as we execute on our long-term growth and expansion roadmap."
Eisner served as executive chairman of the ComplySci board from 2016 to 2018, including a tenure as acting CEO in 2016. Earlier in his career, he served as Executive Vice President at the investment banking, asset management and investment management firm Jefferies & Co, followed by the founding of TheMarkets.com in 2000, which he led until its sale to The McGraw-Hill Companies in 2010. He has served as an investor, advisor and board member for various startups and growth companies. In his most recent role, Eisner served as Assistant Secretary for Management in the US Department of the Treasury from 2018 to 2021. He is a graduate of American University and the Boston University School of Law.
Eisner says: "It's a tremendous professional milestone to return to ComplySci, a company that I have seen grow from a fledgling startup to the thriving technology leader it is today. With the strategic support of K1, the guidance of the board and the sterling leadership of Amy Kadomatsu, the future is bright for ComplySci, and I am honoured to return for the next phase of its journey."
At IHS Markit, Granat manages over 800 global team members focused on legal, risk, compliance, information security and information technology functions. She joined Markit in 2012 and has built the firm's compliance and risk function while guiding the firm through multiple transactions, including its initial public offering in 2014, its merger with IHS in 2016, and its pending merger with S&P Global. Prior to IHS Markit, Granat served as Counsel, Intellectual Property and Data Privacy at Dow Jones & Co, followed by tenures at Kaplan Inc. as Associate General Counsel and Vice President, New Media and TheMarkets.com as Vice President, Legal Affairs and Business Development through its sale to S&P Capital IQ. She is a graduate of Yale University and the New York University School of Law.
Granat says: "Having watched ComplySci's growth from afar, I was impressed with the strides the company has made over the years in innovating the technologies that help financial services firms navigate an ever more complex regulatory environment. I look forward to collaborating with Amy Kadomatsu and her team as we chart ComplySci's growth trajectory for the future."
Novus launches Greater Good Award programme
Novus Partners, a portfolio intelligence company servicing both asset allocators and hedge fund managers, has launched the “Novus Greater Good Award” programme which is geared to foundations, endowments, pensions plans and sovereign wealth funds that can demonstrate a positive impact they are making on the world through their investments.
"We recognise that today, capital allocators are the actors who are directly investing in our collective future. By empowering a mission-driven investor via the ‘Novus Greater Good Award’ we hope to contribute in a small way to making that future just a little bit brighter," says Andrea Gentilini, Chief Executive Officer at Novus.
The award program aims to support institutions that invest to make the world a better place by magnifying those actions with the winning institution receiving one-year of complimentary access to the Novus Portfolio Intelligence platform to support their workflows.
The award package includes Novus’ full suite of data services (ingestion, harmonization, and enrichment) as well as its multi-asset class analytics toolset and reporting engine. Entries for the award are being capped at 100 submissions.
Applications must be submitted by November 12, and must demonstrate the positive impact applicants are making on the world and how they believe the Novus Portfolio Intelligence platform can amplify their impact. Current Novus users do not qualify to enter though they are encouraged to nominate their partners or peers.
“We've proven that better insight into one's data leads to better decisions and better outcomes. In our industry, better outcomes can include grant work, scientific research, humanitarian aid, art, a cleaner planet, and more secure pensions. This award seeks to magnify such outcomes,” adds Gentilini.
Like this article? Sign up to our free newsletter Author Profile Related Topics Impact Investing