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Preqin appoints new CEO
Preqin, a specialist in alternative assets data, tools, and insights, has appointed Christoph Knaack, currently the company's Chief Strategy & Product Officer, as CEO as of 1 January, 2022.
Knaack will focus on leading Preqin through its next growth phase, as the company moves toward serving its customers through the entire private market investment lifecycle — from fundraising and investor relations to deal origination, due diligence and portfolio monitoring.
From 2022, Preqin’s founder and current CEO, Mark O’Hare, will continue his active involvement as a member of Preqin’s Board of Directors, and as the company’s principal shareholder, supporting Preqin’s executive team with strategic guidance, as well as engaging with customers, partners and other stakeholders in the market.
Knaack joined Preqin in 2020. He has since served on Preqin’s Executive Committee where his in-depth understanding of the alternatives industry has proven invaluable in further advancing the company’s overall product and corporate strategy. Before he joined Preqin, Christoph was well-recognised in the investment world through his roles at hedge fund Davidson Kempner, private equity firm Kohlberg Kravis Roberts and in investment banking at Morgan Stanley.
Preqin currently supports more than 170,000 professionals by providing them with the most comprehensive alternative assets data and insights. The firm is currently going through a strong growth phase, with more than 1,000 staff across 14 offices globally. Under the leadership of Mark O’Hare, Preqin has become the global leader in alternative assets data, continuously focusing on innovation, technology and customer centricity.
In August 2021, Preqin took the next step in the company’s evolution with the acquisition of Colmore, a leading private markets technology, services and administration business. In October, Preqin launched major updates to its ESG Solutions, which provides private market participants with an indispensable 360-degree view of environmental, social, and governance (ESG) risk, impact and opportunity. Preqin has an ambitious product roadmap in place as the company continues to provide unmatched service and data-driven intelligence to its customers.
O’Hare says: “It is an exciting time for Preqin and the alternative assets industry in general, and as such it is a perfect time to transition to a dynamic new leader. Since he joined Preqin, Christoph has brought clarity and focus to our product and corporate strategy, with tremendous results. Thanks to his deep industry knowledge, customer focus and fresh perspective, Christoph is the right person to lead Preqin going forward — with the full support of the board, the executive committee and our amazing team across the globe.”
Knaack adds: “I am truly honoured to lead Preqin through its next phase of growth. Preqin is an incredible business and Mark’s vision in building it has truly changed the alternative assets industry. I want to thank Mark for his leadership over the years, for his personal mentorship and guidance, and for his and the board’s confidence in me. Private markets are evolving, and so is Preqin, and I am very excited about the opportunities ahead of us.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsApex supports Absolute Investment Advisers as Convertible Arbitrage Fund exceeds USD500m
Absolute Investment Advisers (Absolute), a long-term client of the Apex Group (Apex), has closed its acquisition of Mohican Financial Management (Mohican).
Absolute is the fund adviser to the Absolute Convertible Arbitrage Fund (ARBIX) while Mohican Financial has been the Fund’s subadviser. The strategic transaction brings the two firms together.
Apex has worked with Absolute to support fund launches and provide ongoing fund services since its foundation in 2004. Absolute provides access to non-traditional investment strategies in mutual fund structures and continues to prove the value offered to investors by the asset class. In this case, the Absolute Convertible Arbitrage Fund (ARBIX) was launched on 14 August, 2017 with USD25 million in legacy assets and a 15-year track record. Fund assets under management have since grown to over USD525 million. Earlier this year ARBIX was named Lipper’s 2021 Best Alternative Equity Market Neutral Fund ranked one of 19 as of 11 March, 2021 for the three-year period.
“Convertible arbitrage is increasingly attractive to investors since it can complement either the fixed income or alternatives sleeve of a diversified portfolio. It may provide investors an opportunity for a moderate return with relatively low volatility, which is increasingly difficult to find in the current low interest rate environment. Convertible Arbitrage is, in our opinion, one of few strategies today that may consistently offer the potential for alpha and the team from Mohican has the experience, knowledge, and track record to execute on the opportunities present in the convertibles market,” explains Brian Hlidek, Managing Principal Sales & Marketing at Absolute.
Chris Koons, Head of Mutual Fund Services at Apex Group, says: “We truly value the collaborative relationship we have built with Absolute over the last 15 years, and are delighted to see such impressive growth with their latest product. We enjoy working on innovative products and our expertise and customized approach is well suited to Absolute’s service needs, in the past, present and future.”
David Faherty, General Counsel and CCO at Absolute, adds: “We have had a great working relationship with the Apex team who have consistently provided us with high quality fund administration, accounting, transfer agency and compliance services. Apex advice and support have played a vital role in the growth and success of ARBIX.”
Trading Technologies to be acquired by 7RIDGE
Trading Technologies International, (TT), a global provider of high-performance professional trading software, infrastructure and data solutions, is to be acquired by 7RIDGE, a specialised growth equity firm invested in transformative technologies.
7RIDGE will fuel Trading Technologies’ organic growth and enable the firm to make targeted strategic acquisitions in the future. Cboe Global Markets, Inc (Cboe: CBOE) and Singapore Exchange (SGX), who are among the limited partners of the fund managed by 7RIDGE, have voiced their support of the transaction. Terms of the transaction, expected to close before year-end subject to regulatory approvals, have not been disclosed.
7RIDGE’s acquisition of Trading Technologies recognises the company’s 27-year leadership position in derivatives trading software, the value of its new state-of-the-art Software-as-a-Service (SaaS) platform, TT, and the talent of Trading Technologies’ global team, which spans 13 offices across four continents. Under this new ownership, Trading Technologies will remain independent and focused on delivering innovative, enterprise-wide solutions for institutional and professional trading.
Tim Geannopulos, Chairman of the Board and CEO of Trading Technologies, says: “We’ve been in search of the right strategic partner to help Trading Technologies achieve the tremendous potential of our pioneering new technology platform and accelerate the expansion of the business and product roadmap. Maintaining the firm’s independence will allow us to retain the incredible talent within our organisation and further strengthen our relationships as a valuable ally to our clients, our partners and the industry. We’re excited that 7RIDGE and its strategic limited partners including global exchanges Cboe and SGX believe in the future of our company and our vision of becoming the operating system of capital markets.”
Shortly after the acquisition closes, it is expected that Geannopulos will relinquish his current role while remaining actively engaged with the company. It is intended that Keith Todd will then be appointed CEO of TT to lead the company as it embarks on this next growth phase. Todd has over 20 years of industry leadership in financial markets technology with FFastFill, ION and currently KRM22.
Todd says: “Trading Technologies has built an exceptional global client base and great relationships with exchanges all over the world, as well as robust technology and a dedicated, experienced team. The firm has an aggressive roadmap for product and market expansion. I have long been a firm believer in the power of SaaS to deliver to clients better technology, greater cost savings and more efficient use of resources. I’m excited by this opportunity to lead TT into its next transformational phase with its outstanding new SaaS platform and the infusion of growth capital from 7RIDGE.”
Carsten Kengeter, Founder of 7RIDGE, says: “We thank TT’s shareholders for selecting us and look forward to accelerating the company’s dedicated contribution to its clients’ and users’ success. The firm has built the market-leading SaaS-based, modular, multi-tenant platform for professional derivatives trading that will bring new efficiencies and strength to the global financial system. Our own operating experience as well as that of our limited partners will strengthen TT’s position as the operating system of capital markets.”
TT was advised on the transaction by Broadhaven Capital Partners and Sullivan & Cromwell LLP.
Bitfinex launches multiple trading templates
Bitfinex, a digital token trading platform, has launched customisable trading templates, enabling each user to create their own unique trading experience.
Bitfinex customers can now tailor their trading portal according to their view on the market. Trading templates can be formulated to meet the specific requirements of a user, facilitating the execution of sophisticated trading strategies. Each user can choose between multiple widgets from a list of tools, including Trading Charts, Depth Charts and Bitfinex Pulse.
“We’re delighted to enable our growing user base to further tailor their trading experience according to their unique individual needs with these trading templates,” says Paolo Ardoino, CTO at Bitfinex. “As a platform to trade digital tokens, Bitfinex is in a class of its own and these new features bring to life the professional trading mindset.”
The exciting new feature allows users also to create multiple custom layouts, which can then be saved and used across various trading pairs, allowing access to faster analysis when trading.
Like this article? Sign up to our free newsletter Author Profile Related Topics Digital AssetsITERAM makes double hire in alternatives team
ITERAM Capital SA, an independent Swiss alternative asset manager, has made two appointments to its alternative team.
ITERAM provides investors access to differentiated alternative investments with the potential to generate stable and consistent uncorrelated returns.
Manuel Garzelli, ITERAM’s CEO, says: "Moïra and Marouane will further enhance our alternative investment expertise and will be invaluable contributors to ITERAM’s growth ambition as well as serving our clients with best-in-class alternative investment solutions."
Marouane Daho joined ITERAM Capital in August 2021 as investment and research analyst within the team that oversees investments across hedge funds, alternative UCITS and private markets. He is responsible for analysing, selecting and monitoring alternative fund managers and actively participating and contributing with investment ideas at the investment committee. Daho reports to portfolio managers, Manuel Garzelli and Marc Sbeghen. Daho started his career at Credit Agricole Corporate & Investment Bank before joining Lyxor Asset Management as a Hedge Fund analyst in 2015. Prior to joining the firm, Daho was working as a hedge funds and private equity investment analyst and was a member of the investment committee at Lera Capital in Geneva. Daho graduated from NEOMA Business School with a Master's in Management and is a CAIA charterholder.
Moïra d’Anterroches joined earlier this year, in March 2021, and is responsible for the operational due diligence on alternative investments covering hedge funds, venture capital, private debt and liquid alternatives. D’Anterroches brings a deep knowledge of financial markets and financial products with expertise in quantitative and qualitative market risk analysis. She started her career in 2003 as investment risk analyst for asset-backed securities, corporate debt and credit derivatives at Natixis Capital Markets and Lehman Brothers in New York before joining Nestlé Capital in Vevey as investment risk manager. Most recently, d’Anterroches was an investment analytics consultant at Groupe Heller. D’Anterroches graduated with a Master’s of Arts in Mathematics of Finance from Columbia University, a Master’s in Economics from University of Geneva and is a FRM charterholder.
ITERAM has assets under management of USD450 million split across liquid and illiquid alternative strategies. The company offers investors innovative and high-quality alternative investment solutions that encompasses the full alternative spectrum from financing and direct investments to multi-manager portfolios, across private markets and hedge funds.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsNew quant multi-manager AFBI secures strategic investment from New Holland Capital
AFBI, a new quantitative multi-manager platform led by former Tudor and Millennium portfolio manager Pierre-Yves Guillo, has secured an anchor investment from alternative investment seeder New Holland Capital.
Established in May this year, AFBI looks to generate uncorrelated returns across a diverse set of liquid quant strategies, using alternative data, proprietary portfolio construction and robust risk management techniques.
Specifically, the Florida-based firm’s strategies include long/short equity investing around digital customer traffic, systematic investments in Chinese commodities futures, real-time mining of alternative datasets in regional macro markets globally, and short-horizon low-latency FX trading.
“New Holland Capital provided us with a sizeable investment and a meaningful operating budget which allowed us to ramp up quickly with respect to technology, data and PMs,” Guillo said of the investment and strategic commitment, which sees the New York-based firm provide significant trading and working capital to AFBI.
Guillo added his firm – which started trading operations in September – will benefit from New Holland’s product structuring expertise and entrepreneurial guidance in the alternative investment industry.
“There is strong demand for high-capacity quantitative macro alpha, and we believe we are competitively placed to deliver it."
New Holland Capital looks to generate alpha across a diverse profile of managers, typically seeking out seeding and co-investment opportunities among smaller and earlier-stage managers, as well as catalyst-driven opportunities with more established firms.
Established in 2003, it was initially an exclusive, non-discretionary advisor to Dutch pensions for alternative investment allocations. In 2020, it expanded to a multi-client model and now manages more than USD20 billion in absolute return strategies for institutional clients.
“AFBI has a highly-skilled and experienced management team with an impressive track record of investing across different market cycles, which creates an attractive opportunity to provide our institutional clients with portfolio diversity and high-quality risk-adjusted alpha,” New Holland Capital CEO Scott Radke said of the partnership.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Deals & Transactions Acquisitions InvestmentsCTAs on track to finish October with a flourish
CTAs and trend-following hedge funds have strengthened their returns as October draws to a close, with recent gains pushing the sub-sector’s year-to-date returns further into double-digit territory.
With just two months left until the end of 2021, Société Générale’s main broad-based CTA Index – a key industry benchmark tracking the daily returns of a pool of 20 of the largest CTAs – is now up 10.56 per cent for the year, having gained 3.20 per cent since the start of this month.
Managed futures funds have continued to thrive on strong directional signals across commodities and currencies, with recent surges in oil and gas prices helping managers extend September’s 0.58 per cent rise. Earlier, the sub-strategy had endured what SocGen earlier described as a “challenging environment” during August, when CTAs slipped 0.29 per cent.
Trend-following hedge funds have fared even better in recent weeks. SocGen’s SG Trend Index – a daily return index measuring the performances 10 of the biggest trend-following managers – is up almost four per cent in October. That advance – almost double the 1.85 per cent return made in September – has pushed year-to-date returns for trend-followers up to some 14.8 per cent overall.
Meanwhile, short-term CTAs – which have struggled to notch up meaningful returns lately thanks to the recent global stock market reversal and renewed volatility stemming from inflationary pressures – are set to end this month on a surer footing.
The SG Short Term Traders Index, which ended September largely flat at 0.15 per cent as a result of uneven market momentum, has added 2 per cent so far this month. The benchmark, which provides a returns snapshot of CTAs and global macro managers with 10-day trading windows, is now up 2.35 per cent since the start of January.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Markets Results & performance Investing in Hedge FundsT Rowe Price to acquire alternative credit manager Oak Hill Advisors in USD4.2bn deal
T Rowe Price Group is to acquire alternative credit manager purchase Oak Hill Advisors and certain other entities that have common ownership for a purchase price of up to approximately USD4.2 billion.
USD3.3 billion is payable at closing, approximately 74 per cent in cash and 26 per cent in T Rowe Price common stock, and up to an additional USD900 million in cash upon the achievement of certain business milestones beginning in 2025.
The purchase price includes the retirement of OHA debt outstanding at closing. Excluding amortisation of intangibles and the expense impact of the earn-out, the transaction is expected to be accretive to T. Rowe Price diluted earnings per share by a low-to-mid single digit percentage in 2022.
OHA, a leading alternative credit manager, will become T Rowe Price’s private markets platform, accelerating T Rowe Price’s expansion into alternative investment markets and complementing T. Rowe Price’s existing global platform and ongoing strategic investments in its core investments and distribution capabilities. Alternative credit strategies continue to be in demand from institutional and retail investors across the globe seeking attractive yields and risk-adjusted returns.
With USD53 billion of capital under management as of 31 July, 2021, across its private, distressed, special situations, liquid, structured credit, and real asset strategies and more than 300 employees in its global offices, OHA has generated attractive risk-adjusted returns over its more than 30-year history. OHA’s performance, its global institutional client base, and the positive industry backdrop have positioned it to raise USD19.4 billion of capital since January 2020.
Bill Stromberg, chair of T. Rowe Price’s Board of Directors and chief executive officer, says: "While we are committed to our long-term strategy to grow our business organically, we have also taken a deliberate and thoughtful approach to considering adding new capabilities through acquisitions that advance our business strategy. OHA meets the high bar we have set for inorganic opportunities, and their proven private credit expertise will help us meet our clients’ demand for alternative credit.”
Rob Sharps, T Rowe Price president, head of Investments, and group chief investment officer, adds: “OHA and T Rowe Price share organisational cultures that focus on long-term investment excellence and delivering value for clients and that are grounded in collaboration, trust, and integrity. As we bring together complementary capabilities and distribution, we can capitalise on growth opportunities for new product development that add value for our clients and stockholders. We share a vision with OHA’s seasoned management team to build a broader business in private markets by combining their specialty in alternative credit with our global scale.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & Transactions Acquisitions Finance & InsuranceDimensional appoints Head of Responsible Investing
Dimensional Fund Advisors has appointed Jim Whittington as Head of Responsible Investment.
Joe Chi, who will retire at the end of the year. Additionally, the firm named Lacey Huebel as Head of Responsible Investment, North America. Both appointments are effective 1 November.
Whittington brings valuable experience to the role, having served as a Senior Portfolio Manager and Vice President in the firm’s London Office, in addition to his work as a member of Dimensional’s Investment Stewardship Committee. For years, he has been on the front lines of Dimensional’s Environmental, Social, and Governance (ESG) initiatives in Europe, the Middle East, and Africa, working with clients, managing portfolios, and representing the firm with industry organisations.
Like Whittington, Huebel brings a wealth of knowledge to her new role, having managed the firm’s social and sustainable fixed income portfolios since their inception. She frequently represents Dimensional on ESG matters both with clients and at conferences. In addition to her new role, Huebel will continue to serve as Portfolio Manager and Vice President.
“These appointments will further our decades-long commitment to sustainability,” says Gerard O’Reilly, Co-CEO and Chief Investment Officer of Dimensional Fund Advisors. “For nearly 20 years, we have managed robust commingled ESG investment solutions on behalf of clients. During that time, informed by the work of leading academics and climate scientists, we conducted extensive research into ESG considerations, developed a reliable approach to analysing and integrating ESG data, built innovative strategies that take environmental and social considerations into account, and designed a systematic approach that enables effective stewardship activities for portfolios that hold thousands of companies. More recently, Dimensional was among the first in its industry to have its worldwide operations certified Climate Neutral by leading climate solutions provider South Pole. We are confident that Jim and Lacey will build on the strong foundation Joe helped establish here.”
Prior to joining Dimensional, Whittington served in a series of leadership roles in London and Hong Kong with various financial firms. He received a BA with honours from the University of Oxford and an MBA from China Europe International Business School.
Huebel previously worked on Dimensional's Investment Analytics and Data team managing fixed income reporting. She has two master’s degrees—an MS from Kansas State University and an MA from the University of California, Santa Barbara. She earned her BS from Texas State University, San Marcos.
Like this article? Sign up to our free newsletter Author Profile Related Topics ESG & Responsible Investing Moves & AppointmentsVIA AM supports Katingan Mentaya carbon offset project via carbon neutral share class offering
VIA AM, a Paris-based asset manager specialised in systematic investment strategies, is supporting the Katingan Mentaya Project through the recently launched VIA Smart-Equity Europe Fund’s Carbon Neutral share classes.
The objective of these share classes is to compensate for greenhouse emissions associated with companies held in the portfolio, through carbon offsetting projects.
The Katingan Mentaya Project aims to protect and restore 157,875 hectares of peatland ecosystems on the island of Borneo in Indonesia, provide local communities with sustainable sources of income and ultimately fight against global climate change. This is the world’s largest emission reduction forest project of its kind, avoiding around eight million tons of carbon dioxide (CO2) being released in the atmosphere per year, equivalent to taking 2,000,000 cars off the road.
Peat swamp forests are incredibly carbon-rich and, by preventing the conversion of natural forests to plantations, the project avoids the emission of nearly half a billion tones of CO2 in the atmosphere. The area protected is also rich in biodiversity, home to more than 4,000 orangutans alongside twelve other endangered species.
Another key aspect of the project is financing sustainable development and agricultural projects in the 34 villages surrounding the project area, with hundreds of people receiving training as part of the project’s activities, as well as improved access to education.
VIA AM is committed to neutralising greenhouse emissions of its portfolio holdings and delivering related benefits against wider Environmental, Social and Governance (ESG) criteria, such as the funding of projects fighting against poverty or preserving biodiversity. The compensation effort is shared: the investor pays slightly increased management fees (+ 0.05 per cent), while VIA AM reduces its margin by an amount at least equivalent to this.
The Katingan Mentaya Project has been selected in partnership with Judo Cares, an independent specialist, advising VIA AM on choosing the best carbon offsetting programmes.
Laurent Pla, Co-Founder of VIA AM and Fund Manager, says: “While we remain focused on maximising long-term returns for our investors, we understand how active management can have a positive impact on combating climate change challenges. Together with our partners at Judo Cares, we have selected the Katingan Mentaya carbon offset project, not only for its effective carbon neutral approach, but also for its commitment towards preserving biodiversity and supporting local communities.”
William Blair Investment Management adds Absolute Return Currency Fund to SICAV range
William Blair Investment Management (WBIM) has launched an Absolute Return Currency SICAV strategy, which maintains long and short exposures across a broad universe of currencies with a view to profit from FX movements.
Employing an actively managed approach, the Absolute Return Currency Fund will include exposures to more than 30 currencies from developed and developing economies.
The portfolio will be managed by WBIM’s Dynamic Allocation Strategies (DAS) team, overseen by Brian Singer, CFA, Partner, Portfolio Manager and Head of the DAS team, and Thomas Clarke, Partner and Portfolio Manager.
The Fund aims to act as a diversifying complement to traditional and alternative portfolios, with a return profile expected to be uncorrelated to equity and bond markets over the longer-term. The team adopts a top-down fundamental investment approach, focusing on expected changes in exchange rates and an assessment of currency valuations, aiming to exploit value to price discrepancies while seeking an attractive return/risk profile.
The Absolute Return Currency SICAV is the thirteenth William Blair strategy to be launched for global investors and the second managed by the DAS team (Dynamic Diversified Allocation). As of 30 September 2021, the company manages USD4.28 billion of assets within its SICAV across Emerging Markets Growth, Emerging Markets Leaders, Emerging Markets Small Cap Growth, Emerging Markets Debt Hard Currency, Emerging Markets Debt Local Currency, Dynamic Diversified Allocation, China A-Shares Growth, Global Leaders Sustainability, Global Leaders, US Small-Mid Cap Growth, US Small-Mid Cap Core, and US All Cap Growth SICAV vehicles.
Brian Singer, CFA, Partner, Portfolio Manager, and Head of William Blair’s Dynamic Allocation Strategies (DAS) Team, says: “The Absolute Return Currency strategy seeks to provide investors with the potential to benefit from positive returns over a market cycle that are expected to be uncorrelated to equities and bonds, complementing traditional portfolio allocations through an absolute return approach. We believe active currency capabilities can improve portfolio efficiency through return enhancement and risk mitigation.”
Thomas Clarke, Partner & Portfolio Manager, Dynamic Allocation Strategies (DAS) Team, adds: “The Absolute Return Currency strategy builds on our team’s multi-decade approach to active currency management. While it has been our experience that our currency management has delivered consistent performance in a variety of environments over that time, we believe the current environment of low yields and many equity segments appearing fully valued make a diversified approach like the one embodied within Absolute Return Currency especially attractive.”
Horizon appoints Senior Business Development Manager for EMEA region
Horizon Software (Horizon), a SaaS provider of electronic trading solutions and algorithmic technology, has appointed Stéphane Sebah as Senior Business Development Manager, as part of its growing EMEA sales team.
Sebah brings with him over eighteen years of solid experience in the financial sector and will be tasked with addressing the markets’ challenges efficiently by accelerating the business growth of Horizon software in the region.
Horizon has witnessed a rapid growth in the EMEA region, which is an important development goal for Horizon moving forward. Having previously worked as a sales broker in the European indices for 10 years at various financial institutions, including Square Global Markets and GFI Securities Limited, Stephane’s experience will enable him to bolster the EMEA sales team and provide insightful management as the business continues to grow. With a firm reputation, alongside a growing global client list, Horizon is striving to offer the best service and improve its business strategies.
Sebah says: “I am extremely pleased to be joining Horizon’s team. Horizon’s reputation in providing world class trading solutions reflects the dedication of the staff in offering the best service and support to the clients. Now that Horizon is witnessing an increasing demand for agency trading, I am proud to be part of this journey and I look forward to the challenges and responsibilities that my new position offers”.
Guillaume Poitevin, Global Head of Sales and Marketing at Horizon Software, adds: “We are delighted to welcome Stéphane into our team. This appointment has a significant importance to Horizon, and it brings us one step closer to our goal of building a strong and dedicated sales team with a clear focus on developing our business strategies in EMEA. This is particularly significant now, as we expand towards agency trading. Stephane’s background in brokerage will add a great value to our team and customers.”
SBAI publishes toolkit for implementation of ESG in different alternative asset classes
The SBAI, a global alliance of alternative investment managers and allocators and custodian of the Alternative Investments Standards, has released the next instalment of its work on Responsible Investment.
A toolkit for asset managers and allocators on the practical implementation of responsible investment in different alternative investment strategies and asset classes. Four strategy specific publications can be found in their Responsible Investment Toolbox.
Much of the guidance provided for implementation of responsible investment is geared towards long only equity portfolios. Whilst there are some elements that are transferable to other alternative asset classes, there are many additional considerations dependent on factors such as asset class, instrument, portfolio concentration, and average holding periods. The toolkit explores these issues along with data considerations in equity long/short, credit, macro, and systematic strategies.
Bradley Belt, Vice Chairman of Orchard Global Asset Management, says: “The SBAI’s work on Responsible Investment is a valuable contribution to the ongoing discussions on integration of ESG risk factors into investment decision-making. In highlighting the need for different approaches, it makes an important distinction between rigorous investment processes which account for any financially material risks, including ESG risks, and pursuing investment strategies with dedicated ESG objectives. This latest SBAI guidance enhances asset manager and allocator understanding of the ESG issues that are relevant to both the strategy and the asset classes traded.”
SBAI’s Responsible Investment work aims to help educate managers and institutional investors around the nuances of ESG and Responsible Investment both when integrating financially material ESG risk into investment and risk management processes, and when running dedicated products with specific ESG objectives.
Maria Long, Research and Content Director of the SBAI, says: “Our mission is to solve for better and improve industry outcomes. Our Working Group discussions have highlighted the importance of allocators and asset managers being able to have conversations that take into account the nuances of different alternative investment strategies. Through collaboration with our community of asset managers and allocators, this toolkit provides guidance on implementing robust and thoughtful frameworks and provides key topics for discussions between asset managers and investors to ensure any ESG objectives are aligned.”
Like this article? Sign up to our free newsletter Author Profile Related Topics ESG & Responsible InvestingAlign's Vinod Paul accepted into Forbes Technology Council
Vinod Paul, Chief Operating Officer at Align, the global provider of technology infrastructure solutions, has been accepted into Forbes Technology Council, an invitation-only community for world-class CIOs, CTOs and technology executives.
Paul was vetted and selected by a review committee based on the depth and diversity of his experience. Criteria for acceptance include a track record of successfully impacting business growth metrics, as well as personal and professional achievements and honours.
“We are honored to welcome Vinod into the community,” says Scott Gerber, founder of Forbes Councils, the collective that includes Forbes Technology Council. “Our mission with Forbes Councils is to bring together proven leaders from every industry, creating a curated, social capital-driven network that helps every member grow professionally and make an even greater impact on the business world.”
As an accepted member of the Council, Paul has access to a variety of exclusive opportunities designed to help him reach peak professional influence. He will connect and collaborate with other respected local leaders in a private forum. Paul will also be invited to work with a professional editorial team to share his expert insights in original business articles on Forbes.com, and to contribute to published Q&A panels alongside other experts.
“It is a tremendous opportunity to join the esteemed technology leaders in the Forbes Technology Council,” Paul comments. “Align’s approach to Managed Services has kept us at the forefront of technology providers in the alternative investment market. The Forbes platform will continue to allow us to address all of the technological, cybersecurity, governance and compliance needs across the financial services and alternative investment management industry and beyond.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsCrestbridge appoints Chief People Officer
Crestbridge has appointed Mike Edward as Chief People Officer.
In his role, Edward will be responsible for the implementation of strategic and practical plans to support Crestbridge’s international growth objectives in order to meet evolving compliance, regulatory and legislative obligations across each of Crestbridge’s eight jurisdictions.
With a career in human resources spanning more than two decades, Edward has particular expertise in devising strategies and techniques to support change and culture management and he originally joined Crestbridge on a consultancy basis, with a remit to manage a series of major HR projects. Prior to joining Crestbridge Mike worked in a number of high-profile banking and financial institutions including six years at a major European-headquartered bank, based in both London and New York, and twelve years at a leading asset management firm in Jersey.
Edward takes over the role from Fiona St Clair-Bolam, who is retiring after a career spanning almost 30 years in human resources. Since joining Crestbridge eight years ago, Fiona has been instrumental in creating and building a people-focussed culture to support the strategy and growth of the business, which now has a headcount of more than 475 people spread over eight locations across the globe. She leaves Crestbridge at the end of the year.
Crestbridge CEO Dean Hodcroft, says: “At Crestbridge our people are the heart of our business and a vital element in achieving our strategic growth ambitions. I’m delighted with Mike’s appointment to the role, where his significant industry experience will be invaluable in leading our HR strategy and helping us drive our evolving Crestbridge vision, building upon the people-focussed culture that Fiona has expertly embedded over the years. Fiona has been a key member of the senior leadership team and has been pivotal in our success to this point and I’d like to thank her for her invaluable contribution, input and counsel.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsValue-focused US long/short manager Invenomic launches UCITS strategy
Boston-headquartered Invenomic Capital Management has launched a new UCITS version of its US-focused long/short equities strategy.
The Invenomic US Equity Long/Short UCITS Fund rolled out last month on fund structuring and governance service provider Waystone’s MontLake UCITS Platform ICAV.
The strategy launched with USD35 million in assets, with a steady pipeline ramping up to USD100 million.
The strategy, which replicates Invenomic’s existing offshore fund, invests in a diverse range of market caps in US equities, trading long and short with a fundamental approach to stock-picking and a strong value bias, using quantitative analysis.
Established in 2015 by Ali Motamed, Invenomic’s investment approach is built around trading “fundamentally sound” companies, disciplined short selling, and diversification, described by the firm as an “essential risk management tool.”
The strategy, which aims to outperform US stock markets over a market cycle with less volatility and drawdown, has generated gains of more than 17 per cent since inception, outperforming its S&P 1500 Index benchmark.
“We have been running our strategy with daily liquidity in the US for over four years now and feel that a UCITS fund available to non-US investors is a crucial next step in the development of our business,” Invenomic founder, managing partner and portfolio manager Motamed said of the European launch.
Before founding Invenomic, Motamed was co-portfolio manager of the Boston Partners Long/Short Equity Fund.
Kenneth Sim, global head of distribution at Waystone, said: “Following a decade of clear outperformance of growth over value, we have seen a clear shift in demand from investors looking for value-tilted strategies that can generate absolute returns through alpha.”
Sim added: “In response to this, the Waystone Investment Solutions team has sourced and partnered with Invenomic Capital Management LP to bring its strong track record and expertise to the European UCITS market, which has come at a time where such value-related strategies are starting to experience their long overdue tailwinds.”
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Long-short investing North America Markets Investing in Hedge FundsHedge funds split over ESG ahead of COP26 climate summit
As the 2021 UN Climate Change Conference (COP26) begins in Glasgow this weekend, hedge fund managers remain evenly split over the incorporation of ESG (environmental, social and governance) factors and sustainability metrics into their investment processes, according to a new poll.
Just over half – 53 per cent – of fund managers surveyed by Hedge Fund Research said they incorporate ESG factors or risks into their investment process – a total of 687 managers – while 47 per cent, or 609 fund managers, said they did not.
Over the course of 2020 and 2021, HFR quizzed hedge fund managers in their database on the incorporation of ESG into their investment processes.
Ahead of the COP26 summit in Scotland – which is seen as a pivotal moment in the fight against climate change – HFR’s survey found that three-quarters of funds engage with their portfolio companies on ESG issues, while 25 per cent did not.
Meanwhile, 77 per cent of funds interview said they consider climate change in their investment processes, while 23 per cent did not.
As impact investing and sustainability themes have come into sharp focus over the past decade, ESG investment factors have gained greater prominence within the global asset management industry, with allocators placing ever-greater scrutiny on how their portfolios and investments meet the climate challenge.
A wide-ranging study by Deutsche Bank last year found that ESG factors now shape the allocation decisions of roughly two-thirds of hedge fund investors.
A number of high-profile hedge fund firms – including Sir Chris Hohn’s TCI Fund, Caxton Associates, and Man Group – have emerged as vocal ESG advocates. Earlier this summer, US activist hedge fund Engine No. 1 secured three members on the board of ExxonMobil as part of its push for clean energy reforms at the US oil giant.
However, in a separate survey carried out earlier this month by EisnerAmper, just 17 per cent of hedge fund executives said their firm had an ESG portfolio. They pointed to a lack of standardised reporting and datasets (48 per cent), sourcing quality investment opportunities (20 per cent), and dispelling the notion of poor returns (17 per cent) as the biggest barriers to integrating ESG into their funds.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics ESG & Responsible Investing Impact Investing Research & Analytics Investing in Hedge FundsPico launches new flagship Corvil Analytics solution
Pico, a provider of technology, data and analytic services for the financial markets community, has enhanced its Corvil Analytics offering for electronic financial markets with the launch of a new flagship appliance, the Corvil 10000.
In today’s competitive, complex and evolving trading environment, Pico believes that maintaining performant trading infrastructure and robust monitoring systems for network transparency and data insights is paramount. The exponential increase in trading and data volumes, particularly since the onset of the Covid-19 pandemic, has accelerated this need for higher capacity infrastructure with up to four times faster initial uptake for 100Gbps deployments when compared to the previous transition to 40Gbps infrastructure. A new generation of high-performance analytics and data capture is required as the uptake of 100Gbps ethernet increases.
The Corvil 10000 establishes a new high bar for sustained throughput, with Corvil’s real-time accuracy and granularity hallmarks, to support the ever-increasing trading and data volumes in financial markets.
Highlights include:
• Sustained 100Gbps capture of packets for a forensic record of all network activity with real-time indexing to enable search, filter and export of the packets of interest, on a single 2U unit
• Accurate record including native hardware timestamping and support for third party timestamping by the leading packet brokers, also sustained at 100Gbps
• Network Analytics for 100 per cent of packets and flows – this includes TCP analytics for all flows with no topping and gap detection for more than 400 feeds
• Publishing of all flow analytics in real-time into third party data repositories (e.g. ElasticSearch) with support for up to 8 million active flows
• Multiple storage configurations ranging from 92TB – 660TB are available offering capacity and price flexibility
Corvil Analytics is used by the world’s largest banks, exchanges, electronic market makers, quantitative hedge funds, data service providers and brokers and has a twenty plus year legacy in extracting and correlating technology and transaction performance intelligence from dynamic network environments. The Corvil 10000 continues this legacy delivering the ability to capture data at high speeds and high volumes while providing analytics and visibility to support the continuity of trading technology performance, execution and trading performance as well as quick and accurate responses to regulatory inquiries.
“The Corvil 10000 appliance marks a significant evolution that equips clients with the analytics throughput to take on current and future traffic rates. In context, this unit can capture the entire US equities market, and US futures market, including OPRA A and B feeds for gap detection on one single appliance,” says Roland Hamann, Chief Technology Officer & Head of APAC at Pico. “The 10000 is the fastest selling Corvil product we have ever launched, reflecting the need for insight-powered performance as 100Gbps network adoption continues at a rapid pace.”
Quant Insight raises USD10m investment for European expansion
British macro analytics firm Quant Insight (Qi), the new quantitative financial market analytics and trading insights provider, has made a major expansion across Europe and the Middle Eastern (ME) territories, opening a new headquarters based in Limassol, Cyprus, in the Cedars Oasis Tower.
This news follows Qi’s recent scale up announcement, which has officially commenced after four years of research development and USD10 million in funding. The company also has offices in London, New York, Boston and Singapore and has clients with total Assets Under Management of over USD2.5 trillion.
Cyprus is a major global hub for Forex and Online brokerage companies, and well-positioned as a business gateway to access Asia, Europe, the Middle East and Africa. This will allow Qi to get closer and offer better services to their partners, customers and prospects across these regions.
Qi have also chosen Cyprus to launch its new retail product: iQ, which will bring cutting edge analytics and trading insights to individual retail investors worldwide. iQ is designed to help retail investors make well informed investment and trading decisions, where such insights were typically reserved for institutional investors – this offering will be made available later this year.
The new branch will be headed by Qi Partner, Zahi Younan, the CEO of Quant Insight Europe. Younan has over two decades of experience in Investment Advisory and Portfolio Management in multinational banks and family offices in UK and the Middle East. He holds an MBA and is a CAIA and CFA charterholder.
Quant Insight’s AI-based financial market brain (RETINA) scans millions of data points daily to provide a succinct overview on how macro forces are impacting all asset classes, from FX, indices and single stocks, to commodities, bond futures and cryptocurrency. RETINA reduces millions of data points into two to five essential daily insights and is already being used by some of the world’s best known investment banks, hedge funds and asset managers, including Alan Howard of Brevan Howard.
Zahi Younan CFA, CAIA, the CEO for Quant Insight Europe, says: “Cyprus was an obvious choice when it came to selecting the best placed base to lead our expansion into new markets and territories, as it is not only an ideal location to access markets in the adjacent continents, but it is also an emerging hub for traders, online brokers and retail investors in its own right.
“This expansion marks the first major step in the new growth and development stage of Quant Insight, and will shortly be followed by the launch of our cutting edge retail offering.”
Mahmood Noorani, CEO of Quant Insight, adds: “Zahi, both as a partner in Quant Insight and as CEO of Qi Europe, is a key addition to our team, and I am confident he will make major contributions to Quant Insight with his capability and experience.”
Liquidity solutions for FX funds
PARTNER FEATURE
FX trading is often seen as the poor cousin of equities when it comes to establishing and retaining a relationship with prime brokers (PBs); yet FX traders need access to services and liquidity just the same. One way for funds to access these requirements is the prime of prime model.
A challenging market
In the past 12-18 months, the FX market has been a challenging space, seeming to experience a split between larger existing players and new market entrants.
Sam Bratchie, Managing Director and Founder of fund administrator Ifina, comments: “From a start-up perspective, there has been a massive increase in enquiries, especially from traders who are looking to get into an institutional environment and can’t do it. Market volatility and getting no interest on your money in the bank means that people are looking for alternatives and this is encouraging new entrants to the hedge funds arena.”
Money managers and proprietary trading firms are also realising that they need more of a regulatory framework in order to carry out their trading activities, secure and raise capital investment and in turn grow revenues.
In the last few years with heightened global regulation from ESMA, CYSEC, FCA, ASIC etc., the retail FX brokerage segment has somewhat contracted and consolidated, leading a number of traders and firms turning to the hedge fund space as they look for more consistent, performance-based revenue streams. Additionally, proprietary, or buyside trading has increased due to the ease of access to API connectivity and algorithmic trading in recent years.
In contrast to Bratchie’s experience with start-ups, however, Philippe Bonnefoy, Founder of quant macro specialist, Eleuthera capital AG, has seen a marked drop in FX profitability. “This has been the most barren period in years,” he states. “Unless you are doing super-exotic stuff, volatility and intraday price dispersion has been killed by quantitative easing (QE).”
However, Bonnefoy does note that as QE ends the FX markets may be entering the most fruitful period of the cycle – if firms are already placed to take advantage of it. “It takes years for funds to get a track record, so they could miss a fabulous three years of trading,” he says.
Size and scale
This track record and the frequently associated size of the firm seems to be at issue in funds’ relationships with prime brokers too. Many prime brokers have not had an easy time over the last few years, with a notable downsizing taking place, which has impacted on their risk appetite and their costs.
One of the reasons for this is a shift in the regulatory environment. Adrian Marcu, Head of Investment Solutions at the multi-family office Belvoir Capital AG, comments: “There are regulatory requirements per liquidity provider and prime broker to do their reporting and checks per client, which has elevated the threshold of business that you have to provide per name. This raises the costs of the sell-side and the buy-side.”
Indeed, as prime brokerage becomes more capital intensive, the market is becoming increasingly segmented, creating a split between big, profitable clients and FX flow traders who are not providing the banks with enough income.
Jonathan Brewer, Commercial Director at ISAM Capital Markets, comments: “FX prime brokerage is a pretty low-yield business for banks. It is becoming more capital intensive so they need much more revenue from each client.”
He adds: “Barriers to entry to tier 1 PBs are significantly higher in terms of capital on account and fees to pay. Even after the initial threshold, there are significant amounts for funds to pay every year.”
And this is not the only risk when appointing a tier 1 PB: as Bratchie points out, prime brokers are liable to drop clients who do not provide sufficient income in what Brewer also terms “a regular cull”.
A new model
One option for smaller funds or new entrants to the market is the prime of prime model. Some such firms seek to offer a true prime broker service while others, such as IS Prime, offer clients access to credit, greater leverage, more understanding of flows, and the ability to curate liquidity appropriate to the trading style of each individual client.
Bratchie comments: “Clients starting with USD3, 5, or even 10 million are always going to struggle when PBs want guaranteed commission. Even if they start well and values then drop, they will still be turned off by a tier 1 PB. But prime of primes can offer them an institutional account and the ability to protect their alpha as flows are anonymised.
“Cost is paramount, too, as annual operational cost impacts severely on their NAV while their performance is audited. Start-ups don’t want a minimum monthly fee,” he adds.
Small firms also run into the issue of spreads: if they don’t have sufficient scale of flow, they can’t interest enough liquidity providers to compete for their flows to such an extent that they will receive good spreads.
“Clients can license a prime of prime’s spreads, buying power with the street, and scale of good quality flows,” Brewer says.
Funds also need to ensure they can cover the operational aspects of trading. Bonnefoy comments: “If you have an active market backdrop, that’s great, but if the market goes quiet you have to craft your own liquidity, and that sounds good until you have to manage it yourself which takes a lot of time and resource. There are a lot of mechanics behind the scenes and that’s where prime of primes come in.”
There can be a further issue for even larger or more established funds to contend with if choosing a tier 1 PB: that of internal structure and politics. “If you are trading multi-asset funds, it can feel like you are doing a ton of business with a firm, but FX is the little brother of equities and internal politics and P&L often don’t travel across departments,” Bonnefoy says.
“If you have 60 per cent of the equities book and 10 per cent of FX, you won’t get a really good deal on FX,” Bratchie adds.
The view of the allocators
One of the caveats to choosing a prime of prime rather than a Tier 1 PB might be the requirements of your allocators. End investors have traditionally liked the association with tier 1 banks, so how do they feel about this approach?
According to Brewer, it depends on the investors. “If you have certain names on the paperwork going out to investors, that will be the rubber-stamp you need in some cases. But those sorts of investors won’t invest anyway unless a fund has a critical mass of USD200-300 million.”
It may also be the case that funds are using a prime of prime for FX but a tier one PB for equities, which could allay those investors to whom a big name matters. However, Bratchie adds: “The investor base for small entrants isn’t looking for a KPMG or a Goldman Sachs. They want to know that the fund, the managers, the brokers are all regulated. They also need handholding. They don’t know the funds arena and they just want to get on with trading,” he concludes.
Long-term relationship
For some clients, however, a big name really does matter and, once they reach critical mass, they may wish to transfer business from a prime of prime to a tier 1 PB. But many funds either choose to stay with their prime of prime or to continue to maintain a liquidity relationship.
Bonnefoy says: “Price movement creates opportunity, and if not much is happening, it might require a shift of how people are pricing you. It helps if someone more liquid than you is aggregating the flow of many clients and doing it full-time – another utility that comes into play. That’s where the added value of an intermediary comes in.”
“There is the added benefit of the anonymity of using a prime of prime, especially when markets or thinner or you are trading something you don’t usually trade,” Mancu adds.
The next step
As the markets continue to move on from the uncertainties of Covid, Bratchie predicts that the slew of new entrants will continue, particularly in FX and crypto, with new funds and start-ups acquiring funding from family and friends. Prime of primes will therefore also be looking to move, or move further, into these spaces.
The issue of technology may also be a mover. “Prime brokers take a long time to get things going, so tech can be a costly problem,” says Mancu.
Bonnefoy agrees: “To the uninitiated technology stability appears completely unimportant, that is until it doesn’t work. You take it for granted until you can’t get into or out of a trade.”
With so many drivers for change and new market entrants looking for services they can no longer get from prime brokers, it looks like the prime of prime model is here to stay, in FX and beyond.
Replay the Hedgeweek webinar – FX Funds: Is the traditional prime broker model of accessing liquidity still relevant and what are the alternatives? – produced in conjunction with IS Prime.
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