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Digital asset hedge fund ARK36 appoints COO
Digital asset hedge fund ARK36 has adjusted its management structure with the appointment of Anto Paroian as Chief Operating Officer (COO).
Paroian will supervise all of the fund’s operations and activities, effectively taking the helm along with ARK36 co-founder Mikkel Mørch and Executive Director Loukas Lagoudis.
ARK36’s other co-founder Ulrik Lykke will now be focusing on exploring how the company's offerings can be expanded to other facets of the digital asset space.
The new COO will introduce core elements from a more traditional financial background to the digital asset space which are instrumental in ARK36’s vision of bringing the best of these two worlds together. Anto Paroian has more than a decade’s worth of experience in establishing and managing data analytics teams in the hedge fund and alternative asset industry. His impressive track record includes cooperations with prominent institutions such as Goldman Sachs, Blackrock, Vanguard, Brevan Howard, and JP Morgan. Additionally, Anto is an exceptional communicator and an expert on non-verbal communication, a subject he has taught as an independent lecturer for two years.
Lykke says: “The addition of Anto Paroian as part of the team has allowed me to free up substantial time to focus more on expanding the offerings of the company while knowing ongoing operations will be in good hands.”
Paroian says: “I’m excited to be joining the incredibly capable team at ARK36 and bring my managerial skills to use in a company that works at the forefront of what is happening in the financial sphere.”
Macrobond appoints North America Business Development Director
Macrobond Financial, a provider of economic and financial data and analytics, has appointed Larry Neiman as Director of Business Development, effective 1 November.
Neiman, who will be based in New York, will be responsible for growing Macrobond’s business in the US and managing strategic customer relationships in the region.
Neiman joins Macrobond after 21 years at Haver Analytics, a provider of financial and economic data and analytic tools, where he most recently served as regional account manager based in New York. He holds an MBA in Economics and Finance from New York University’s Stern School of Business and a BS in Economics & Political Science from James Madison University in Virginia, US.
Neiman says: “I am thrilled to be joining Macrobond at such an exciting time for the business, where I have the opportunity to play a part in its continued expansion across geographies and teams. I was attracted to working with Macrobond because it is not just committed to supplying the most comprehensive macroeconomic data sets, but is also committed to solving many workflow problems that the industry is well aware of, such as collaboration solutions that financial firms and their dispersed teams increasingly demand. I was also impressed by their future road map which includes forward thinking analytics that the industry is crying out for.”
Howard Rees, Chief Commercial Officer at Macrobond, adds: “We have seen very strong growth recently with well over 100 new clients in the last 12 months opting to use the Macrobond solution. Larry’s hire is part of our strategy to invest in our presence in the US and capitalise on the growing demand from firms in the region. Larry brings with him invaluable relevant experience and we are confident that our US clients will benefit from his expertise and insights.”
Macrobond is the world’s most comprehensive source of economic intelligence for more than 4,000 finance professionals globally. Its flexible SaaS platform provides instant access to macroeconomic, aggregate financial and sector time-series data from more than 2,000 global sources, along with integrated analytics that enable users to quickly analyse, visualise and share the data - helping them gain strategic insights and collaborate better across their businesses.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsMulti-strategy hedge fund Brummer navigates equities and energy upheaval
Swedish asset manager Brummer & Partners’ flagship multi-strategy hedge fund vehicle edged into positive territory in September, as stock market highs earlier in the month rapidly reversed amid renewed volatility, and commodity prices surged higher.
The Brummer Multi-Strategy (BMS) vehicle – which comprises nine hedge fund strategies spanning equity, macro, trend-following and more - saw its SEK-denominated share class rise 0.5 per cent last month, and 0.4 per cent in its USD class. However, on a year-to-date basis the fund is still down 0.4 per cent following losses earlier in the year.
Meanwhile, the BMS 2xL twice-levered version was up 0.8 per cent (SEK) and 0.9 per cent (USD) in September, but remains in the red to the tune of 1.6 per cent since the start of 2021.
As oil, electricity and gas prices soared, systematic trend-following strategy Florin Court was the best performer, generating an 8.1 per cent monthly return from correct calls in energy, commodities and fixed income markets. The advance brings Florin Court’s year-to-date gain to more than 23 per cent.
Meanwhile, Lynx, another managed futures quant fund, rose 1.1 per cent, helped by commodities and FX positions, with the fund now up 1.4 per cent YTD.
Amid supply chain disruptions and rising consumer price inflation, the strong equity market gains earlier in the month – which saw the S&P500 and Nasdaq reach all-time highs – receded, with the indices ending September down 4.7 per cent and 5.3 per cent respectively.
Against that backdrop, long/short equity manager Manticore navigated the month’s volatility well, Brummer said, adding 1.2 per cent thanks to successful bets across its long and short book. Manticore is now up 1.7 per cent over the nine-month period in 2021.
On the downside, tech-focused long/short equity hedge fund Black-and-White slipped 1.8 per cent last month thanks to losses in longs and shorts, and has fallen a hefty 18.7 per cent so far this year. Meanwhile, Kersley – a newly-added financials-focused long/short equity name to the BMS vehicle – rose 0.3 per cent last month.
Elsewhere, macro strategy Arete tumbled 1.8 per cent as a result of losses in equity markets, but it remains up 6.8 per cent in 2021. Quantitative equity manager AlphaCrest posted alpha losses, with the fund down 2.1 per cent for the month, but up 2.1 per cent YTD.
Fixed income relative value strategy Frost dipped 0.9 per cent, but stays in the black year-to-date by some 0.3 per cent, while Lynx Constellation, a machine-learning hedge fund strategy, fell 7.4 per cent and has now lost more than 16 per cent year-to-date, according to a Brummer update this week.
BMS is set to redeem its entire investment in Black-and-White after Seth Wunder announced he is stepping down as CIO of the technology-focused manager. Following the closure of Black-and-White – which has generated a return of 42 per cent since its start in 2016 – BMS has added two sector specialist long/short equity funds, Kersley and Pantechnicon.
The shuffle comes as the long-running Stockholm-based multi-strategy pioneer’s flagship recently unveiled a new leadership.
Deputy managing director and partner Markus Wiklund is named as managing director, and Kerim Celebi, currently head of research, becomes a portfolio manager for BMS, together with founder Patrik Brummer, with the addition of a new risk manager Andreas Ekenbäck. Portfolio manager Mikael Spångberg is leaving the firm.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Results & performance FundsState Street’s Collateral+ business now operational with Acadia
State Street Corporation's Collateral+ business is now operational with Acadia’s Initial Margin Exposure Manager (IMEM) and Margin Manager (MM) service.
This integration provides automated dispute management for initial margin agreements and electronic margin call messaging across multiple products.
By leveraging IMEM & MM, State Street’s Collateral+ business will now enable clients to more efficiently comply with Unclear Margin Rule (UMR) regulations, via proven industry-leading solutions. By integrating Acadia’s services onto the Collateral+ platform, State Street’s clients will avoid and resolve disputes for SIMM/Grid calculations, and increase their operational efficiency by providing standard calculation, reconciliation and straight-through margin processes. This latest operational development furthers the firm’s fully integrated, yet modular, approach to UMR compliance which is a key benefit in State Street’s Collateral+ platform.
“We are pleased to announce this latest milestone for the firm’s Collateral+ business. With the pending final phases of the Uncleared Margin rules (UMR) for over-the counter (OTC) derivatives, an increasing number of our clients are looking to replace manual processes with new tools that focus on workflow automation,” says Staffan Ahlner, Global Head of Collateral+ for State Street. “By maximizing low touch operational processes and speedy resolution of disputes, we continue to focus on ‘enabling the trade’ for current and future clients.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Trading & Execution Technology & software solutionsCboe appoints Senior Vice President, Global Sales and Index Licensing
Cboe Global Markets, a provider of global market infrastructure and tradable products, has expanded its Data and Access Solutions leadership team to successfully position the business for further global growth.
Bo Chung, a long-time veteran of the financial services industry, has joined the company as Senior Vice President, Global Sales and Index Licensing. In this role, Chung will be responsible for overseeing the strategic growth and adoption of Cboe’s holistic Data and Access Solutions offering.
Catherine Clay, Executive Vice President, Global Head of Data and Access Solutions, says: “For many years I have admired Bo’s impressive track record of success and industry leadership and I’m thrilled to have him join the team. Cboe’s expansive Data and Access Solutions offering is an integral part of the company’s global vision and we could not be more excited to have Bo help us execute on this strategy to bring Cboe’s suite of data analytics, indices, market intelligence and execution services to new markets and users.”
Chung has led a distinguished 30-year career in the financial services industry, holding several senior leadership roles and managing teams across continents. Prior to joining Cboe, Chung served as an independent strategic advisor to select start-ups in the early and growth stages. Previously, he was Managing Director, Global Head of Sales and Relationship Management at S&P Dow Jones Indices (S&P DJI), where he worked for more than two decades. In this role, he led a team of 50 global sales and relationship managers and was responsible for business expansion, revenue growth and strategic partnership development. Prior to that role, Chung was Managing Director, Business Development, Sales and Marketing, and focused on identifying opportunities to increase S&P DJI’s brand recognition and index adoption among asset managers and investment banks.
Additionally, Michael Hollingsworth was promoted to Vice President, Global Head of Risk and Market Analytics, and Geralyn Endo was promoted to Vice President, Global Data and Access Solutions Client Engagement. Previously, Hollingsworth was Senior Director, Financial Risk Analytics, leveraging his extensive trading and analysis experience to help lead Cboe’s financial risk analytics business. Endo was previously Head of Client Engagement, Data and Access Solutions at Cboe.
Clay adds: “Mike has been an asset to our team since joining Cboe as part of the Hanweck acquisition in early 2020. His in-depth knowledge of Cboe’s data and analytics services and vision for the future of our products is unmatched. Likewise, Geralyn has been an integral member of the Data and Access Solutions team for two years, helping grow the business substantially throughout her time at Cboe. Her passion for making trading solutions accessible to all market participants drives our entire team to continuously reach new heights. I am confident that Mike and Geralyn will help accelerate our global growth as we build one of the world’s largest global derivatives and securities trading networks.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsSentieo doubles staff in London to support growth
Sentieo, a financial research platform provider, has expanded its presence in the European market and doubled its team in the United Kingdom.
The growth is driven by increasing demand for the company’s AI-driven financial research platform and represents a firm commitment to more than 50 active customers in the region, including Schroders, Kames, SW Mitchell, Cape Capital, Amiral Gestion and Ownership Capital. The London-based team has been bolstered by the addition of a Director of UX Design, a Director of Product, and three sales and client success executives, with the expectation to double the sales team again over the next 12 months.
The London expansion follows Sentieo’s Series B funding round in May 2021, which was led by Ten Coves Capital with participation from existing investors Centana Growth Partners and Studio Management. The capital supports the company’s mission to invest in the people and the technologies that are helping global customers transform the way they conduct financial and corporate research.
“We are excited to expand our business and grow our team in Europe, to meet increasing demand for our solutions in the region,” says David Lichtblau, CEO of Sentieo. “Providing an innovative cloud-based platform that can modernise the research workflow and drive analyst collaboration for more powerful investment analysis has catapulted our momentum around the globe. As the industry evolves, our team will continue to lead our clients through their digital transformation process and help deliver the competitive insights they need to succeed.”
Following record revenues in 2020, demand for Sentieo’s AI-driven platform continued throughout the pandemic as investment firms sought cloud-based solutions that could enable their teams to work remotely and collaborate seamlessly. Featuring innovative AI search and sentiment analysis, market and alternative data, modelling and analytics – all supported by an integrated research management system – Sentieo is empowering customers around the world to reinvent how the investment research process is done.
With Sentieo, research analysts no longer need to rely on disparate tools and legacy applications like terminals, emails, and Excel documents to conduct financial research. By providing a centralised hub for analysts to do their work – in or out of the office – investment firms can modernise their research workflows, share ideas, and strengthen the investment analysis process to achieve Alpha for their clients.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsItiviti successfully integrates NYFIX Matching post-trade solution with Broadridge Investment Management Solutions
Itiviti, a Broadridge Financial Solutions company, has integrated its NYFIX Matching solution with the portfolio, order, and investment management system from Broadridge.
“The post-trade space has historically been defined by manual processes, but given shrinking technology budgets, many firms have been unable to address these challenges,” says Ray Tierney, President of Itiviti, a Broadridge business. “Now, less than six months after being acquired by Broadridge, Itiviti can deliver our automated NYFIX Matching solution for trade allocation, confirmation and affirmation to a far greater number of clients, helping them save money and expedite trade matching. This integration is a testament to the full power of Broadridge’s capabilities, which can scale to support clients now and into the future.”
The new solution will empower Broadridge’s client base with direct access to NYFIX Matching’s automated trade allocation, confirmation and affirmation capabilities. Clients will gain the ability to consolidate matching of multiple asset classes on a single platform and match trade details at a granular level, delivering efficiency and cost benefits. NYFIX Matching’s FIX-based affirmation occurs in near real time, seamlessly catching errors, minimising costly trade breaks, and supporting accelerated settlement cycles. As with most Itiviti products, this solution is multi-asset, global and fully hosted and offers a modern user interface. This is the first of many product integrations between Itiviti and Broadridge and serves as a compelling example of the strong synergies between the two.
Like this article? Sign up to our free newsletter Author Profile Related Topics Trading & ExecutionEEX registers first trades in new long-term Power Futures
The European Energy Exchange (EEX) has registered its first trades in the new long-term Power Futures contracts.
On 5 October 2021, EEX registered a 10 MW transaction in EEX Spanish Power Futures for the delivery in the calendar year 2028 (which corresponds to a volume of 87,840 MWh) as well as for the delivery in 2029 (which corresponds to a volume of 87,600 MWh) with Audax Renovables SA being active as one of the counterparties trading via Renta 4 Banco SA.
Steffen Köhler, Chief Operating Officer of EEX, says: “We decided to offer our customers the opportunity to trade Power Futures in Germany, Spain and Italy up to 10 years, as subsidy schemes continue to be phased out across Europe. We noticed strong interest and a demand to find a trustful and secure market based solution. I am thrilled to see these first trades which prove that our contracts are meeting the market’s expectations for long-term hedging.”
By extending the power futures product suite from six to 10 years in Germany, Italy and Spain, EEX is facilitating long-term PPA hedging on the exchange. This enhancement enables customers to hedge their price exposure up to 10 years in advance with the standardised and financially settled power futures at EEX. At the same time, customer are able to hedge their future price risk and mitigate their counterparty risk through secured clearing, so that all positions will be fulfilled.
Like this article? Sign up to our free newsletter Author Profile Related Topics Trading & ExecutionBritish hedge funds show ‘patriotic bias’ towards UK stocks, study finds
A ‘patriotic bias’ towards London-listed stocks has increased among UK hedge funds during the Covid-19 pandemic, and is stifling managers’ efforts to diversify portfolios, according to a new industry survey.
Institutional prime broker IG Prime surveyed 250 hedge fund portfolio managers and hedge fund traders, exploring what influences their diversification strategies, the internal and external factors shaping investment decisions, and what they consider when trading internationally.
A remarkable 96 per cent of hedge fund respondents believe UK stocks to be more successful compared to other markets – despite US equities outflanking those in the UK during the course of the Covid-19 pandemic.
This indicates a ‘patriotic bias’ which is influencing portfolio asset allocation decisions at UK hedge funds, IG Prime said.
“Our survey data shows that hedge funds have been focused on the markets they know best and are most comfortable trading in,” said Chris Beauchamp, chief market analyst at IG Group.
“Although markets like the US have significantly outpaced the UK, ‘safe’ investments that managers feel more confident will produce a return are likely to be prioritised over ‘riskier’ investments – despite the potential for enhanced profits.”
The report probed the internal and external factors weighing on hedge funds’ investment decisions and portfolio-building process.
Despite their general faith in UK equities, more than half – 57 per cent – of those quizzed said ‘pressure from management’ was a factor to diversify outside of UK assets, while an equal number cited a desire to ‘benefit from other strong performing markets’.
Of the two, 59 per cent of portfolio managers said that management pressure was the reason for diversification, and 53 per cent said it was to ‘benefit from other strong performing markets’. Hedge fund traders, on the other hand, appear more focused on performance – with 52 per cent citing management pressure compared with 65 per cent naming strong performing markets exposure. They also prioritised balancing risk (64 per cent) and minimising volatility (65 per cent).
The report said: “Despite the overall confidence in UK stocks, the reported pressure to diversify may come as a result of general economic uncertainty brought on by the pandemic and geopolitical influences such as the US elections and Brexit, which could be among some of the factors that have helped the US economy outpace the UK’s.”
Elsewhere, some 46 per cent of survey participants said they still felt cautious about trading in international markets due to lack of experience, while another 46 per cent of all respondents also said they were concerned about the impact of political volatility on markets. Another 45 per cent named different trading legislation as a barrier to trading stocks in markets outside their main domicile.
Pre-pandemic, some 59 per cent of UK hedge funds said that they had dedicated between 76–100 per cent of their portfolio to UK investments. That number has since grown to 63 per cent. At the same time, there has also been marginal shift towards European stocks since the pandemic began, IG Prime noted, with the number of hedge funds investing 26-50 per cent of their portfolio to European stocks rising from 6 per cent pre-pandemic to 8 per cent.
“Although home bias was a significant factor in hedge funds’ portfolios before the pandemic, patriotic investing has since increased as investors have directed more of their funds to UK stocks,” the survey observed.
“Meanwhile, the slight increase in European investments may be the result of local political uncertainty brought on by Brexit, which may have led to some investors seeking to profit off European companies that stand to benefit from the shakeup in EU trade. However, it’s worth noting that the increase in European investments is minimal and may not be indicative of a wider trend.”
Beauchamp said: “It’s no surprise that hedge funds would look to mitigate as much risk as possible during a time of crisis, and if lack of knowledge and experience of a certain market is to be deemed a risk then it would appear that this mitigation is a driver of continued ‘patriotic investing’ during the pandemic.”
The study follows recent research published jointly by the Alternative Investment Management Association, Simmons & Simmons and Seward & Kissel which showed a marked increase in UK hedge funds’ confidence in their business prospects over the coming year, outpacing sentiment among US, EMEA and Asia Pacific-based managers.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Coronavirus Funds Distribution Investments UK Markets Investing in Hedge FundsEEX Group reports Power volume of 772 TWh in September 2021
EEX Group’s Global Power volume amounted to 772 TWh (+45 per cent y-o-y). Volumes increased after many traders returned from an extended summer break to observe increasing levels of volatility on the world markets.
European Power Derivatives exceeded the mark of 500 TWh which is the highest monthly volume in this year and an y-o-y increase of +44 per cent.
New monthly records in German (+57 per cent), Nordic (+104 per cent) and Greek Power Futures (+ 1,388 per cent) also resulting from daily records.
Greek Power Futures recorded 7 TWh traded this year which more than double the 2020 volume, while power options volume more than quadrupled.
US Power Derivatives meanwhile, increased by 63 per cent to 206 TWh while Japanese Power Futures reached 395 GWh (+834 per cent) in September.
European Natural Gas Spot markets increased by 37 per cent to 148 TWh.
Volumes were up across almost all hubs, with German GASPOOL and NCG reporting increases by 53 per cent and 47 per cent respectively, CEGH + 37 per cent and TTF +38 per cent
Gas Derivatives in Europe almost doubled to 104 TWh.
TTF Futures +94 per cent, PEG Futures more than doubled
Strong performance of Czech gas hub on both Spot (+345 per cent) and Derivatives (+1,545 per cent).
US environmental markets posted a new monthly volume record in September with 35,438 lots traded, up 244 per cent compared to the same period last year end exceeding the prior monthly record set last month (August 2021: 31,703 lots).
Freight markets were up 23 per cent to 79,173 lots driven by Freight Futures which rose by +48 per cent.
Agricultural derivatives contracts rose by 38 per cent driven by volume increases in both segments, Processing Potatoes (+54 per cent) and Dairy (+39 per cent).
In the dairy segment EEX Butter Futures increased by 25 per cent while Skimmed Milk Powder Futures rose by 24 per cent.
Like this article? Sign up to our free newsletter Author Profile Related Topics MarketsUnited Fintech appoints Senior Sales Exec from JP Morgan
Jeremey Gzaiel has joined United Fintech’s London-based team as Senior Sales Executive, with a remit to grow the firm’s client base in French speaking territories.
Gzaiel brings a wealth of institutional sales experience to United Fintech, which helps banks, hedge funds and asset managers to accelerate their transition to a digital world through access to fintechs specialising in capital markets. He joins from JP Morgan, where he specialised in Emerging Markets Sales, helping institutional clients with solutions in credit, FX and equity derivatives. Prior to that, he worked at Commerzbank in Cross Asset Solutions Sales.
As a native French speaker, Jeremy’s initial sales focus at United Fintech will be on building a French speaking client-base including insurance companies, pension funds, hedge funds and asset managers. Jeremy Gzaiel joins a global team at United Fintech which consists of over 70 employees across five offices: London, Copenhagen, Berlin, Romania and the US.
Tom Robinson, Partner and Head of Sales, United Fintech, says: “Jeremy is another great hire for United Fintech as we continue to assemble a world-class sales team. His experience, relevant skills and multi-lingual capabilities will be a real asset to the organisation and we are delighted to welcome Jeremy to our EMEA Sales Team.”
Jeremy Gzaiel, Senior Sales Executive, United Fintech, adds: “This is a fantastic career opportunity for me and I am very excited to be joining the United Fintech team, leveraging my knowledge and contacts to help United Fintech grow. From personal experience, I know this is ideal timing to be focusing on accelerating the digitalisation of banks and hedge funds. United Fintech’s vision is extremely powerful, providing financial institutions with access to a one-stop-shop of fintechs specialising in capital markets.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsLibreMax Capital raises USD225m for Structured Opportunities Fund
LibreMax Capital (LibreMax), an asset management firm specialising in structured products and corporate credit, has successfully closed its fifth drawdown vehicle, LibreMax Structured Opportunities Partners I, with total capital commitments of approximately USD225 million.
The Structured Opportunities Fund will target investments that have unconventional asset pools or are created in less liquid forms. The Fund will focus primarily on private asset-backed securities across the consumer, residential and commercial credit sectors.
Greg Lippmann, Chief Investment Officer of LibreMax, says: “In today’s environment, we believe private lending affords an attractive opportunity to generate uncorrelated returns. Leveraging our market relationships, asset expertise and proprietary technological infrastructure, LibreMax is uniquely positioned to provide bespoke capital solutions to help companies fund future growth or meet liquidity needs in a post-Covid world. The Structured Opportunities Fund complements and extends our growing franchise of credit products, and we are grateful for the support of our limited partners.”
Since 2012, LibreMax has managed four drawdown vehicles totalling over USD1.4 billion in committed capital as part of its diversified platform of alternative and long-only strategies. LibreMax also offers collateralised loan obligation management through its Trimaran Advisors, LLC subsidiary.
Like this article? Sign up to our free newsletter Author Profile Related Topics Funds Launches & FundraisingEEX launches sell-off in German national emissions trading scheme
The European Energy Exchange AG (EEX) has successfully launched the sell-off of national emission certificates (nEHS certificates, identified on EEX by the abbreviation nEZ) in the German national emissions trading scheme (nEHS).
At the start of the sell-off, 500,012 nEHS certificates were sold via EEX to a total of 4 participants at the fixed price of EUR25 Euros. Significantly more users from different participants have logged in during the first sell-off to test the new platform. Due to the settlement modalities for the so-called DCP nEHS customers, the sell-off volume and the number of DCP customers will be published one week later. Thus, the final sales and participant figures for a sell-off date are finally determined after one week in each case and are communicated on the EEX website. EEX publishes further details on its website under this link.
Peter Reitz, Chief Executive Officer of EEX, comments: "The German national emissions trading scheme is a major instrument to achieve the national climate targets in addition to the already established European emissions trading scheme (EU ETS), since the German heat and transport sectors will be included in CO2 pricing for the first time. We are proud of the successful start of the sell-off and very pleased to be able to contribute to the national climate protection goals."
All CO2-causing fuels, in particular petrol, diesel, heating oil, LPG, natural gas and, from 2023, coal, will be included in the German national emissions trading scheme. Those companies that bring the fuels into circulation, for example natural gas suppliers or companies in the mineral oil industry, are obliged to purchase national emission certificates.
The nEHS certificates can be purchased directly via EEX or indirectly via an intermediary. The list of the current 25 intermediaries on EEX’s website contains detailed information on their services within the national emissions trading scheme.
The sell-off of national emission certificates for 2021 will be offered twice a week between October and December 2021, on Tuesdays and Thursdays, in the period from 9:30 to 15:30 CET. A further 18 sell-off dates are scheduled between now and the end of the year. 7 December 2021 is expected to be the last sell-off date of the year.
Until 2025, a fixed-price phase is envisaged under the scheme, in which an unlimited quantity of national emission certificates will be issued at a fixed, annually increasing price. From 2026 onwards, the sell-off shall be transferred to an auction procedure. EEX publishes detailed information on the national emissions trading scheme on its website.
Further information on sell-offs under the German national emissions trading scheme is published on the DEHSt website.
Like this article? Sign up to our free newsletter Author Profile Related Topics Trading & ExecutionBrevan Howard takes minority stake in structured credit manager 1543 Capital
Brevan Howard, the high-profile global macro hedge fund firm co-founded by Alan Howard, has taken a minority stake in 1543 Capital, an alternative credit and structured finance-focused investment manager, as part of a new strategic partnership.
The partnership will see Brevan Howard take a board seat in the credit manager, which has around USD450 million in assets. The hedge fund giant will also acquire capacity rights to invest in future funds managed by 1543, whose focus spans asset-based investing, commercial real estate debt and equity, consumer and student loans, and trade finance.
Alan Howard meanwhile has made a personal investment in 1543 Capital Fund I, the firm’s private equity-style fund vehicle which aims to generate risk-adjusted returns from market opportunities across investment cycles.
1543 Capital LP – which originally launched its drawdown private credit-oriented fund in August 2019 with USD75 million, now with USD125m of capital commitments – already advises Brevan Howard on USD200 million of structured finance assets, up from USD100 million at inception.
The firm focuses on structured credit, corporate loans and private credit opportunities over multiple market cycles, with target returns of between 10-15 per cent annually. Specific trading themes include rising credit demand and credit needs among private debt and real estate borrowers, a slew of new asset classes arising from venture capital-backed specialty finance firms, and the funding gap arising from regulatory changes which have curbed certain traditional bank lending avenues.
Prior to launching 1543 Capital in 2019, Andrew Ulmer, the firm’s founder and CIO, had been a credit-focused portfolio manager at Brevan Howard before launching DW Partners, a spin-out of Brevan’s credit unit, in 2009.
Along with Ulmer, 1543’s team comprises portfolio manager Geoff Williams, a former executive managing director at Goldman Sachs who co-ran its CMBS, CDO and commercial real estate loan trading business; portfolio manager Brian Zola, former co-head of structured finance and partner at DW Partners, and Richard Gannalo, CFO and former US CFO & COO at Cross Ocean Partners.
Brevan Howard CEO Aron Landy said 1543 Capital’s team has long-standing links to Brevan Howard and a “track record of success”.
“Partnering with them is a testament to our belief in their quality and skill as well as the firm’s potential, and we look forward to developing the relationship further in the years to come,” Landy said.
Andrew Ulmer, founder and CIO of 1543 Capital, said: “Brevan Howard is a firm with an exceptional pedigree, built over many to years and is rightly considered one of the pre-eminent asset managers in the world. This partnership will be a catalyst to the development of 1543 in the years ahead.”
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Deals & TransactionsPutting an end to manual processes
Despite the push to increase automation across the financial services industry in recent years, manual processes continue to create operational risk and maintain unacceptable high costs, an issue which was brought to the fore once again by the recent pandemic.
This report, produced in conjunction with AutoRek, investigates the resistance to change in the hedge fund industry so far, the drivers to automation, and the benefits to be gained across the industry by moving away from manual processing.
Pico launches ultra-low latency venue connectivity across key global venues
Pico, a provider of mission critical technology, data and analytic services for the financial markets community, has introduced ultra-low latency venue connectivity.
Pico’s ultra-low latency solution supports clients with latency-sensitive trading strategies requiring highly accurate views of the market and faster execution times. Utilising high-performance Layer 1 switching technology, Pico can now achieve one-way market data latency of 5-87ns and round-trip latency of 140ns for order entry (an 80 per cent reduction from standard Layer 3 access).
This new Layer 1 offering is supported by Pico’s global engineering expertise and instrumented with its best-in-class Corvil Analytics, assuring operational performance, transparency, and visibility. Corvil’s real-time analytics continuously monitors Layer 1 switch transit latency, with immediate alerts generated if nanosecond thresholds are violated, providing maximum operational transparency for latency-sensitive trading.
End-of-day reports on details including message rates, microbursts, and gap detection give clients important service assurance visibility.
Layer 1 connectivity is available across venues in North America, Europe and Asia-Pacific (APAC), with Pico’s global service delivery team providing the required support for this turnkey solution to ensure rapid time to market.
“Layer 1 access is an important component for many trading strategies and Pico’s advances in optimizing exchange connectivity latency set a new benchmark which gives clients the ability to gain a significant competitive edge,” says Roland Hamann, Chief Technology Officer & Head of APAC at Pico.
“Pico is committed to delivering a differentiated client experience and we continue to invest in our next generation network to remain ahead in performance, security, scalability and transparency. This launch further strengthens our comprehensive range of network products that meet the full spectrum of electronic trading requirements.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Trading & ExecutionHow “explosive” energy prices are fuelling a quant hedge fund surge
The “explosive” upward price movements in energy markets are helping power performance among machine-based hedge funds this year, as CTAs and trend-following strategies successfully lock onto strong price signals.
The rally in energy prices have proven one of this year’s most reliable and enduring trends, according to David Gorton, founder and chief investment officer, DG Partners.
Gorton noted that the energy “complex” of oil and gas has rapidly closed the gap on other commodity sectors this year – having earlier lagged them in 2020 - as economic reopening and increasing social mobility has bolstered demand. At the same time, supply-side factors have also come to a head as the green energy transition has struggled to fill the gap left by sustained underinvestment in more traditional fossil fuels, Gorton told Hedgeweek.
The price of Brent crude oil rose above USD81 on Monday - its highest level in two years - with the West Texas Intermediate benchmark hitting USD77, while natural gas futures reached USD5.9, a seven-and-a-half year high.
Trend-following hedge funds – as measured by Société Générale’s SG Trend Index, which tracks the daily net returns of a pool of 10 of the biggest trend-following managers – have scored a 10.2 per cent gain year-to-date on the back of the upward moves. The main SG CTA Index – a broader industry benchmark offering a daily performance snapshot of 20 of the largest CTAs – is up more than 7 per cent in 2021.
“Whilst energy markets have suffered several notable corrections this year, prices have consequently quickly recovered to new highs. As such, our models have been persistently long throughout the year,” Gorton said.
Gorton’s strategy comprises several models with differing characteristics which aim to take advantage of different market regimes, coupled with a series of risk modulators that dynamically allocate risk across sectors, which have persistently added exposure to the sector this year.
As a result, DG Partners’ models – which have been persistently long the commodity throughout 2021 – were also well-positioned to capture September’s energy price spike.
“The price action in natural gas has perhaps been the most explosive,” Gorton observed. “When markets become more volatile, and the price action less stable, the position-sizing algorithms endogenous to our models are designed to automatically reduce positions accordingly. In the case of natural gas, the rally reached such extreme proportions recently that our models began exiting their long exposure, quite aggressively in some cases.
“Nevertheless, with the longer-term trend still in-tact, we retain a core net long exposure heading into Q4. This perhaps illustrates the benefits of running several models with differing characteristics and reaction speeds.”
Meanwhile, Nicolas Gaussel, founding partner and CEO of Paris-based Metori Capital Management, said natural gas has been the best performing position in his strategy, both over the past month and year-to-date. Gaussel said recent energy upward moves had a positive impact on the fund, with the model considering the natural gas bet to be “the best risk adjusted/expected returns call” in the portfolio.
“The model is quite stable and remains long but not overexposed on energies, considering the high correlation across energy trends,” he said of Metori’s current positioning. “Since the end of July, our positioning has remained quite stable. The model has inner moderation principles which prevent it from over exposing to a trend and, hence, to a reversal.”
Jonathan Singh, discretionary manager at Fulcrum Asset Management in London, said further price moves can be expected up ahead, noting there is still “room for change” on both the supply and demand side.
“OPEC+ remain disciplined but may become less so as inventory continues to draw - we are now back to pre-pandemic levels for the first time - and if price levels remain high,” Singh told Hedgeweek.
“On the demand side, of course Covid mutations are a risk, but the recent rise in natural gas prices has brought into play questions around oil substitution for electricity generation this winter. Implied 1 million volatility in Brent is now back down to pre-pandemic levels, however, suggesting the market doesn’t see large volatility on the immediate horizon.”
He said CTAs’ positioning in crude is at post-pandemic highs, given the strong medium-term signal and low realised volatility. “Currently, with our momentum signal being at its maximum level since Q1, stronger upwards momentum in price will not in itself increase positioning. Instead, realised volatility will be the driver,” he said of the prospect of renewed volatility.
Pointing to the reactive nature of CTAs, Singh believes an increase in realised volatility will likely see long positions reduced, even if the momentum signal remains at the maximum level.
“But given signals in highly correlated markets are the pointing the same way, a broader energy sector significant price decline is a risk to current positioning.”
Looking ahead, Gorton said the interlinkages across commodity markets and the “often intense” energy required for their production may risk a further upward spiral across the broader commodity asset class.
Noting the impact of high energy prices in the UK on fertilizer production – and the attendant consequences for agriculture commodities and food supply – he said: “With governments unlikely to allow rising food prices to compromise their popularity with the electorate, in our view, and fiscal laxity having become more prevalent in the post-pandemic era, there is a risk that state intervention or subsidy prevents the necessary demand destruction to see prices normalise in the near term.”
He added: “As such, with supply bottlenecks likely to persist for some time, there may be further upside for commodity prices in the near-term, particularly as the post Delta-variant recovery continues and global economies run above potential.”
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Oil Coronavirus Energy Funds Investments Investing in Hedge FundsAxeTrading integrates ICE’s pricing and analytics solutions for Quoting and Execution Management System
AxeTrading, a fixed income trading software company, has demonstrated the integration of ICE’s pricing, analytics and market data into the AxeTrader Quoting and Execution Management System (QEMS).
Users of the AxeTrader QEMS will be able to access ICE’s pricing and analytics tools, including end-of-day evaluated pricing, continuous fixed income evaluated pricing, best execution services and ICE Liquidity Indicators™.
As the electronification of fixed income markets continues to accelerate, traders and other investment professionals are demanding solutions that help them make more informed and efficient decisions. The AxeTrader QEMS provides dealer-grade pricing through a user configurable quoting engine, manages RFQs, executes orders and helps achieve best execution across multiple execution platforms and trading venues. The addition of ICE’s pricing and analytics tools deepens the resources available to AxeTrading customers.
ICE’s high-quality pricing and analytics data offers an expansive set of tools that can be used throughout the investment process and help to support customers in their assessment of regulatory compliance requirements. ICE calculates and publishes independent evaluations for 2.8 million fixed income securities and provides continuous evaluated pricing throughout the trading day through its Continuous Evaluated Pricing service. ICE Liquidity Indicators can help in quantifying security and portfolio liquidity across fixed income and equity asset classes, while ICE’s Best Execution Service can help customers manage and measure bond trade execution quality and support them with their assessment of regulatory compliance. ICE’s fixed income and data offering is part of Intercontinental Exchange (NYSE: ICE), a leading global provider of data, technology, and market infrastructure.
Stephen Baker, Global Head of Sales of Fixed Income and Data Services at ICE, says: “Our pricing, analytics and market data supports mission-critical trading processes throughout the lifecycle of an investment and helps users make more informed decisions. AxeTrader’s flexible and innovative trading solutions continue to provide users with an optimised and intuitive workflow that allows them to take advantage of high-quality data, trade more efficiently, and help to meet various regulatory compliance requirements.”
Ralf Henke, CEO and Co-Founder of AxeTrading, says: “Working with ICE we will be able to expand our clients’ access to truly market leading trading workflows and analytics. AxeTrading is part of a new generation of technology providers whose ethos and business is built around openness, flexibility, and interoperability. Traders benefit from their choice of connectivity to the broadest ecosystem of best-in-class pricing and analytics data, taking them beyond the legacy technology providers with their limited ‘walled gardens’.”
“Data-driven, automated trading strategies are clearly demonstrated to improve trading efficiency and accuracy. In fixed income trading this is further strengthened by a buy-side firm’s ability to act as both price-maker and price-taker as the situation demands. Having quality, timely data embedded in the workflow is key to being able to do so,” says Mark Watters, CCO and Co-Founder of AxeTrading.
TNS offers trading firms seamless relocation to Bergamo IT3
Transaction Network Services (TNS) is expanding its Managed Hosting solution to enable firms wanting to co-locate and directly access the Euronext exchange matching engine to seamlessly move trading operations from Basildon to Bergamo.
Euronext is planning to migrate its primary datacentre and related colocation services to the Aruba Global Datacentre IT3 in Bergamo, Italy in Q2, 2022, with TNS securing infrastructure capacity in the new site. As with TNS’ other global colocation sites, TNS will leverage its Layer 1 switching solution to deliver ultra-low latency mutualised market access while also deploying the lowest latency network connectivity to bring Bergamo onto its global network.
“Relocating from Basildon to Bergamo with TNS will allow traders to focus on their core business, safe in the knowledge that they can experience uninterrupted, seamless trading from day one of the switch over,” says Jeff Mezger, TNS’ Vice President of Product Management. “We will provide a full suite of low latency services, including order routing, market data access, and the procuring, installing and management of trading infrastructure.
“Accessing IT3 through TNS is cost effective for traders, as it avoids having to research, acquire and maintain their own exchange connections, datacentre space and equipment,” adds Mezger. “We can deliver a lower total cost of ownership, with clients benefitting from TNS’ cost efficiencies, rack-optimised cabling and design. We offer differentiated services to help all traders effortlessly make the move, from small firms requiring a partial rack, to international banks requiring multiple contiguous cabinets.”
TNS’ Managed Hosting solution utilises the company’s ultra-low latency Layer 1 technology inside the datacentre. This enables firms to access execution speeds that are 10 times faster than traditional layer 3 architectures. TNS Layer 1 was the first of its kind and remains the most advanced solution in the market, eradicating the need for multiple switches by using a simple, single hop architecture to deliver connectivity in as little as 5 to 85 nanoseconds.
The TNS infrastructure brings together over 2,800 financial community endpoints to address the needs of financial market participants worldwide. TNS offers a range of connectivity, colocation, cloud, market data and VPN solutions within its Infrastructure as a Service (laaS) portfolio.
Traders using the company’s Managed Hosting solution benefit from TNS’ global point-of-presence footprint and extensive existing on-net connections, which includes uninterrupted access to more than 60 exchanges with local, physical support around the globe. Additionally, real-time monitoring is provided by TNS’ Network Operation Centres in the UK, US and Australia.
BTIG Fixed Income Credit adds to emerging markets team
BTIG has expanded its Fixed Income Credit division with several senior hires who specialise in emerging market debt sales and trading.
Blake Considine and Josh Markfield have joined BTIG as Managing Directors, while Tyler Danielsen joins the firm as a Director.
They each will be tasked with helping to enhance the team’s global reach, industry relationships and client resources across developed and emerging markets worldwide. In their new roles at the firm, they will report directly to Darren Haines and Michael Carley, Sr, Co-Heads of BTIG Fixed Income Credit.
“Our institutional and corporate client base worldwide is increasingly focused on expanding beyond the developed markets,” says Anton LeRoy, President of BTIG. “Pushing into emerging markets is another important development in our global credit platform and we are pleased to have Blake, Tyler and Josh join us as part of that effort.”
At BTIG, Considine will hold a sales trading role, focused on Asia-Pacific. He has nearly 15 years of industry experience. Prior to BTIG, he was a Managing Director at Seaport Global Securities. Previously, Considine was a Director within Structured Credit at Deutsche Bank and a Vice President within Institutional Flow and Structured Credit Sales at BNP Paribas.
Danielsen will also focus on sales trading within Asia-Pacific at BTIG. He held several emerging market sales and trading roles prior to joining BTIG. Danielsen was a Director within Credit Sales and Trading at Seaport Global Securities, where he spent nearly five years. Earlier in his career, he held similar roles at Tullett Prebon and Creditex Group – Intercontinental Exchange.
Markfield has 25 years of emerging market trading experience at both buy and sell-side firms. As a BTIG Fixed Income Credit Trader, he will focus on the Latin American market. Prior to BTIG, he was a Managing Director within Fixed Income Credit at Maxim Group and Seaport Global Securities. Previously, Markfield was a Managing Director and Co-Head of Emerging Markets at Cantor Fitzgerald. Earlier in his career, he was a Credit Trader at SAC Capital and a Director within Credit Trading at Calyon. Markfield also held trading roles at Gramercy Advisors and Oppenheimer.
“With their emerging market experience, we believe that Blake, Tyler and Josh will be immensely valuable to our clients,” says Haines. “Their knowledge, responsiveness and ability to produce meaningful market intelligence will help industry participants better evaluate their trading decisions and execute effectively.”
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