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Marblegate and Investcorp form strategic partnership
Marblegate Asset Management (Marblegate), an alternative investment firm that invests in credit opportunities and special situations, has partnered with Investcorp’s Strategic Capital Group (ISCG). Terms of the transaction have not been disclosed.
The partnership with ISCG provides Marblegate with long-term capital to strengthen its investment platform and continue to enhance its capabilities in middle market debt. Furthermore, Investcorp’s deep private markets expertise and global investor network, combined with Marblegate’s unique restructuring knowledge and reputation for operational excellence, provide for an optimal partnership.
“We are delighted to bring on a highly complementary minority partner with the skills and experience of a global leader like Investcorp,” says Andrew Milgram, Managing Partner and Chief Investment Officer of Marblegate.
Under the terms of the agreement, ISCG will be a passive, non-voting partner to Marblegate. There will be no changes to Marblegate’s team, strategy, execution of its investment processes nor day-to-day operations in connection with the partnership.
“We believe that Marblegate is highly differentiated from its peers in the middle market credit space with its focus on bringing innovative solutions to event-driven and distressed opportunities,” says Anthony Maniscalco, Managing Partner and Head of ISCG. “We look forward to supporting the team as Marblegate further distinguishes itself in the market.”
Marblegate intends to utilise the transaction proceeds to increase its capital commitments toward its investments and continue to enhance its special situations platform, where it has generated attractive historical performance and sees compelling go-forward opportunities.
“This additional long-term capital will help position Marblegate for continued success across our credit platform,” adds Paul Arrouet, Managing Partner at Marblegate.
Launched in 2019, Investcorp’s Strategic Capital Group seeks to be a long-term strategic partner to mid-sized alternative asset managers, with a primary focus on GPs it believes to be well-established, with successful track records and that are poised for growth. This partnership represents ISCG’s fourth transaction since the strategy’s launch.
Seward & Kissel LLP represented Marblegate Asset Management in connection with this transaction
Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & TransactionsNew IonQ/FCAT paper shows how quantum machine learning algorithms have exponential advantage over classical counterparts in financial analysis
New paper describes how quantum machine learning algorithms have IonQ, a specialist in quantum computing, has released a new paper in collaboration with Fidelity Center for Applied Technology (FCAT) demonstrating how its quantum computers can outperform classical computers to generate high-quality data for use in testing financial models.
Financial institutions commonly use models for asset allocation, electronic trading, and pricing, and require testing data to validate the accuracy of these models. The new technique, demonstrated by FCAT on IonQ’s latest quantum computers, has the potential to be the first class of quantum machine learning models to be deployed for broad commercial use.
Today, many financial institutions generate data with classical machine learning to test their financial models. These classical approaches are often limited because real-world dependencies between variables--for example, in a portfolio of stocks--are too complex for them to model. IonQ and FCAT demonstrated that data generated with quantum machine learning algorithms is more representative of these real-world dependencies and is therefore better at accounting for edge cases like black swan events.
The technique invented by IonQ and FCAT leverages copulas, a method often used in statistical models to describe relationships between large numbers of variables. For instance, large financial institutions use copulas to understand relationships between stock prices (if the price of X is within a particular range, then the price of Y tends to go up). By using quantum computers to implement copulas, IonQ and FCAT demonstrated the ability to construct complex models beyond the capability of classical computers.
“This research, performed on IonQ hardware, shows quite clearly that leveraging quantum computing can lead to superior financial modelling results. The application of quantum machine learning to other industries, ranging from climate science to geopolitics, means that a quantum-shaped future is just around the corner,” says Peter Chapman, CEO and President of IonQ. “Fidelity has long been a leader in understanding how new technologies will shape markets and industries, and we’re excited to work with them in this space.”
The copula method underlying FCAT and IonQ’s work can be applied to any industry dealing with complex systems that involve several correlated variables. In the near future, quantum machine learning may be applied to climate research, medical imaging, or recommendation systems. In finance, the first quantum machine learning methods using copulas are likely to be applied to risk management and portfolio optimisation.
“At FCAT, we track new and emerging technologies and trends to help Fidelity meet the changing needs of our customers and associates,” says Adam Schouela, Head of Emerging Technology, Fidelity Center for Applied Technology. “Classical computing enabled breakthroughs in the financial services space, and we expect quantum computing’s impact to be no less significant. We’re thrilled that our latest research with IonQ can help demonstrate quantum’s potential in this space.”
The news continues a year of considerable momentum for IonQ. Its trapped-ion quantum computers were recently added to Google Cloud Marketplace, making IonQ the only supplier whose quantum computers are available via all of the major cloud providers. In addition, IonQ’s co-founders joined the White House’s National Quantum Initiative Advisory Committee to accelerate the development of the national strategic technological imperative.
Like this article? Sign up to our free newsletter Author Profile Related Topics Surveys & research White papers Technology & software solutionsBloomberg launches new fixed income pre-trade TCA model
Bloomberg has launched a new pre-trade transaction cost analysis (TCA) model that enables market participants to assess trade cost, daily executable volume, and probability of execution.
The new model provides pre-trade analysis for investment grade and high yield corporate and sovereign bonds across the globe and offers a liquidity tree across various order sizes. In addition to assessing trade costs, clients can analyse daily executable volume and probability of execution to better inform their trading and portfolio construction decisions. Clients can also run scenario analysis by customising their views on the bond spread and rating, which results in different cost, probability, and volume in potential trading outcomes.
The model has been calibrated based on five years of historical trade information, proprietary to Bloomberg taking a variety of factors into account. These include: side and size of the order, the real-time Composite Bloomberg Bond Trader (CBBT) bid-ask spread, the amount outstanding, the rating and currency of the bond, and an additional overlay with the bond’s age, term, and time to maturity.
PGGM, a Bloomberg Transaction Cost Analysis (BTCA) solution customer, partnered with Bloomberg’s trading quant research team to beta test Bloomberg’s new pre-trade TCA function.
“Reliable pre-trade data for fixed-income is scarce, which makes price discovery and proving best execution a challenge,” says Jan-Theo Varkevisser, Global Head of Fixed Income Trading, PGGM. “The product provides us with trusted pre-trade price discovery and an automatic connection to post-trade analysis that ensures a valuable feedback loop for our traders to inform their trading decisions.”
This new model is integrated with BTCA, Bloomberg’s multi-asset transaction cost analysis tool, significantly enhancing the solution to deliver pre- and post-trade intelligence. BTCA is integrated into the core Bloomberg offering to harness the company’s breadth of market data, analytical tools, and trading workflows. Featuring exception-based workflow and customisable reporting, BTCA delivers information users need on demand, along with wide-ranging insight into trading-cost impact and decision support for comprehensive transaction surveillance.
“While trade cost models have become the norm in equities, developing a native model in fixed income markets is an exciting step forward to providing bond traders and portfolio managers with greater pre-trade intelligence,” says Ravi Sawhney, Global Head of Trade Automation & Analytics, Bloomberg. “The inclusion of pre-trade cost and probability estimates as part of the BTCA offering promotes market transparency and helps bond traders to make decisions that comply with their firms’ best execution requirements. We look forward to being able to offer this and more pre-trade analytics into our suite of electronic trading products in the future.”
Bloomberg subscribers can access more information via TCA on the Bloomberg Terminal.
big xyt hires new head of business development for Continental Europe
big xyt, an independent provider of smart data and analytics solutions to the global trading and investment community, has appointed Gilles Meyruey as Head of Business Development (Continental Europe).
Meyruey’s 35-year career in Europe covers senior positions in equities, derivatives, and bonds trading, execution services management and client management for leading firms including Société Générale Corporate and Investment Banking (SGCIB), Dexia Securities France, Exane and Deutsche Bank.
Meyruey says: “I’m excited to join the talented and highly skilled team at big xyt. I have been watching their success in Europe over the past few years with great interest and have been impressed as their security analytics and execution analytics solutions have evolved and been adopted by global firms including leading exchanges, Tier 1 banks and buy-side clients. I’m looking forward to further driving expansion in Continental Europe and introducing our unique solutions to firms in the region.”
Robin Mess, CEO and Co-founder of big xyt, says: “I’m pleased to welcome Gilles to our global leadership team, which covers EMEA, the Americas and Asia Pacific. The combination of Gilles’ experience with big xyt’s expanding portfolio of analytics solutions will be of tremendous value to the financial services industry, and will enable us to accelerate our growth and to develop our global capabilities across asset classes in partnership with our clients.”
Navigating fragmented markets remains a challenge for participants needing easily digestible information on trading analysis. The big xyt data analytics platform responds to these market challenges, and provides clients access to independent, accurate and transparent results, transforming their trading performance and analysis, and reducing the complexity and costs of their technology and operational requirements.
BTIG appoints Managing Director and Director of Policy Research
BTIG has appointed Isaac Boltansky as a Managing Director and Director of Policy Research. In this newly created role within BTIG’s Research and Strategy division, Boltansky will analyse and forecast how potential policy shifts will impact investors, corporations and other market participants.
He will synergistically work alongside BTIG’s Chief Equity and Derivatives Strategist Julian Emanuel adding to the firm’s macro strategy product and other resources published for clients. Boltansky immediately enhances the firm’s offering and differentiates it by providing comprehensive policy research and analysis. As BTIG continues to grow and invest in new talent, he represents the most recent addition to a research team designed to support the goals of both corporate and institutional investor clients. Notably, the firm has expanded its research division by more than 35 per cent over the last year, emphasising BTIG’s commitment to strengthening its capabilities.
“We look forward to incorporating Isaac’s perspective into the resources the firm provides for clients,” says Scott Kovalik, Co-Founder and Chief Executive Officer of BTIG. “His work will create a framework for clients to better understand how policymakers may impact the overall market and individual sectors. Isaac has great experience and insights. He will help our clients navigate near-term policy changes and offer them a closer look at longer-term structural shifts driven by legislation and regulation.”
Prior to BTIG, Boltansky was the Director of Policy Research at Compass Point Research and Trading, where he spent ten years coordinating the firm’s policy analysis and focused on mortgage finance, consumer lending, digital assets, cannabis and tax policy. Previously, he was a Research Analyst on the Troubled Asset Relief Program (TARP) Congressional Oversight Panel. Earlier in his career, Boltansky was a Research Analyst at EJF Capital.
At BTIG, he will report directly into Ryan Serwin, CFA, the firm’s Director of Research. “Isaac’s vision and experience guiding investors through the complexities of governmental policies will enhance the existing coverage of our established team of research analysts and strategists,” says Serwin. “We look forward to his analysis and commentary as he identifies the implications of key legislation today and into the future.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsMan GPM appoints MD in Sales Division
Karim Ghachem has been appointed as a Managing Director in the Sales division dedicated to Man GPM.
In this newly created role, Ghachem will be responsible for leading the firm’s private sales effort across single-family rentals, residential credit and specialty finance. He will be in charge of educating investors, developing partnerships and customised solutions with clients and expanding the Man GPM platform to a broader range of investors.
Prior to joining Man Group, Ghachem was a Managing Director of Business Development at Pretium Partners, driving marketing and sales efforts across real estate, residential credit, and corporate and structured credit. He has also held business development roles at Southpaw Asset Management, Three G Group Limited and State Street Corporation.
Ghachem's appointment follows the hires of Anthony Cazazian, Head of US Residential Real Estate, and Eric Atlas, Head of US Residential Debt, in late 2019.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsCambrian Asset Management launches systematic bitcoin and ether trusts
Cambrian Asset Management (Cambrian ), a quantitative investment firm specialising in digital assets, has launched the Cambrian Bitcoin Systematic Trust and the Cambrian Ethereum Systematic Trust (the Trusts).
The Trusts are the first of their kind and designed for institutional and accredited individual investors with existing or seeking exposure to bitcoin or ether. The Trusts feature an actively managed systematic strategy that looks to manage downside risks and maintain substantial upside potential while seeking to defer taxable events for their investors.
The Trusts will leverage the same systems employed by Cambrian with respect to its other strategies, which trade over 50 digital assets. Cambrian's systems are informed by over 100 billion historical market data points going back to 2014 and utilise proprietary execution algorithms that update in milliseconds to manage risk 24/7/365. Over the past nearly three years, these strategies have generated compound returns that are higher than a digital asset passive index, while suppressing downside volatility by greater than 70 per cent.
Qualified accredited investors can subscribe directly to the Trusts, which require an initial minimum investment of USD50,000 in cash or in-kind, at www.cambrianasset.com. Cambrian expects to file an application with OTC Markets for approval for public trading of shares of the Trusts approximately 12 months after the date of the first subscription.
"We are excited to offer a new way of investing in digital assets through the launch of these new Trusts," says Martin Green, Co-CIO and CEO of Cambrian. "Investors have asked us many times if they can use our systems to actively manage their bitcoin or Ethereum exposure to protect against the material drawdowns that are endemic to digital assets markets. These Trusts seek to do just that and provide the same benefits to investors seeking to gain their first exposure to bitcoin and Ethereum."
"Demand for digital assets only continues to increase, especially among sophisticated institutional investors and family offices, who, because of the volatility of digital assets, are increasingly looking for a strong track record of active management," says Tony Fenner-Leitao, President of Cambrian. "We are proud to help investors tap into and benefit from the uncorrelated alpha that these assets can offer."
The Trusts will utilise JP Morgan Chase Bank, NA as an initial fund administrator for preparation of NAV on a monthly basis and the preparation of the Trusts' annual financial statements. Sudrania Fund Services Corporation will serve as an initial fund administrator for the Trust's investor subscription processes, shareholder statement preparation, and calculation of daily NAV. Ernst & Young will serve as the independent certified public accountants of the Trusts.
Anchorage Digital Bank National Association, Coinbase Custody Trust Company, Gemini Trust Company, LLC, and NYDIG Trust Company LLC will serve as initial custodians for the Trusts. Chapman and Cutler LLP is serving as legal counsel. Signature Bank will serve as the Trusts' bank.
Like this article? Sign up to our free newsletter Author Profile Related Topics Digital AssetsFulcrum Asset Management assembles strategic adviser panel
Fulcrum Asset Management has assembled a panel of strategic advisers as it experiences increasing demand for illiquid investments through its Alternative Solutions business.
The panel will offer an additional layer of analysis and consultation regarding longer-term investments, enhancing Fulcrum’s existing capability in the area.
The three inaugural panel appointees are property expert Julian Stocks, a partner at Knight Frank, alternatives expert Nathan Peters and credit expert Ed Britton.
Head of Fulcrum Alternative Solutions, Matt Roberts believes that it is beneficial to seek independent expert opinions given the long-term idiosyncratic nature of these investments.
“We are excited by the growing demand for bespoke illiquid arrangements from investors, and while we have our own deep expertise in this area, a wide range of expert opinion can only enhance the decision-making process, particularly given the long-term nature of the investments.”
Julian Stocks has 30 years’ property experience in the UK and Europe, and along with his team at Knight Frank runs a series of high-profile active property portfolios and large single assets, with approximately GBP3 billion under management.
Ed Britton was a director, specialising in credit research at Willis Towers Watson, where he had served for more than 12 years before retiring in 2018. Prior to this he had been a fund manager at both Baring Asset Management and Newton Investment Management.
Nathan Peters is a freelance adviser specialising in the alternative investment industry. As a former portfolio manager with Fulcrum, Nathan knows the firm, and the industry extremely well. In particular, he will bring expanded coverage of the Australian marketplace.
The new panel is in keeping with Fulcrum’s thoughtful and research-oriented culture.
Roberts says: “Additional, independent advice supplied by these industry leaders will help us to maximise the chances of achieving our clients’ objectives in this interesting opportunity set.”
Fulcrum has a team of over 70 people including economists, asset class specialists and research analysts.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsHanover Investors appoints first Chief Business Officer
Hanover Investors has appointed Jeremy Westhead as its first Chief Business Officer.
The specialist investor, that operates in under-analysed and illiquid markets, continues to bolster its senior team as it eyes further growth.
Westhead is an experienced finance and operations director. He was previously Group Chief Financial Officer of We Are Nova, a technology focused venture builder. He was also Finance Director of Horizon Capital, a technology and business services focused private equity investor, working with them for more than a decade.
Matthew Peacock, Founder and Chairman of Hanover Investors, says: “As the firm continues to grow and develop, it is crucial for us to enhance our platform. We are delighted that Jeremy has decided to join us to help execute our strategy.”
The firm is currently investing via the Hanover Catalyst Fund, which is focused on high-conviction and heavily-researched investments in small cap securities in the UK and Nordic markets and the Hanover Active Equity Fund (HAEF) II which deploys proprietary, data-led research to identify complex stakeholder situations and under-researched businesses with excellent value potential for a control investor. Three months’ ago, luxury international motor yacht builder Fairline Yachts joined the portfolio after it was acquired for an undisclosed sum via HAEF II.
Jeremy Westhead, Chief Business Officer of Hanover Investors, says: “The firm’s laser focus on finding, creating and delivering value is really impressive, as is the world class talent at all levels in the company. I am very much looking forward to working with the Hanover Investors team both in London and Malta.”
Westhead is the latest senior strategic appointment to bolster the business for further growth. In the last six months the firm has hired Jason Carley and John Woodard, both as Senior Partners, and Serena Menaguale as Director of Fundraising.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsHedge fund assets soar to record volumes as yield-hungry investors swell industry coffers
Global hedge fund industry assets are surging to record levels.
New data published by BarclayHedge shows total industry assets have now mushroomed to USD4.4 trillion, with hedge funds raking in USD18.3 billion of new inflows from allocators during July, as managers scored a USD7.3 billion trading profit for the month.
Hedge funds have now recorded a fifth consecutive month of positive investor flows, after allocators poured in USD16.6 billion in June, USD36 billion in May, USD23.3 billion in April and USD19.1 billion in March, according to the Barclay Fund Flow Indicator.
In the 12-month period to the end of July, hedge funds attracted USD156.6 billion in inflows. A USD407.4 billion trading profit over the period brought total industry assets to USD4.4 trillion as July ended, up on USD4.32 trillion at the end of June, and outweighing the USD3.26 trillion recorded in July 2020.
With equities and bonds showing greater correlation in recent months, yield-hungry allocators are understood to be turning to hedge funds and other alternative investments to help boost portfolio returns amid the shifting economic backdrop.
Ben Crawford, head of research at BarclayHedge, said investors have been in a “risk-on” mode for most of the last 12 months, and July’s metrics again underlined that prevailing sentiment.
“There was no shortage of promising auguries in July,” Crawford said. “Strong economic signals from the US, China and Europe, surging equity markets, increasing business activity and plummeting jobless figures all contributed to investors’ enthusiasm for hedge fund opportunities.”
Sector-specific hedge funds – such as those strategies trading healthcare and technology – attracted the most investor interest, drawing in USD4.7 billion, or 1.4 per cent, of assets in July.
Balanced (stocks and bonds) funds added USD3.3 billion of new capital, or 0.5 per cent of assets, in July, with fixed income strategies bringing in USD2.4 billion of allocator money and multi-strategy managers drawing USD2.3 billion.
On the flipside, investor yanked some USD1 billion out of equity long-bias funds, and withdrew USD581.1 million from equity market neutral strategies and USD246 million from event driven managers.
At the same time, managed futures, CTAs and trend-following strategies rebounded back into positive inflow territory in July, with investors pouring in USD920.9 million to the sector.
Systematic CTAs attracted the lion’s share, BarclayHedge said, pulling in USD748.1 million, as multi-advisor futures funds gained USD166.9 million of new money. Discretionary CTAs took in USD87.6 million, and hybrid CTAs saw USD85.2 million.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Impact Investing Investments Results & performance Investing in Hedge FundsSS&C GlobeOp Forward Redemption Indicator at 2.45 per cent for September
The SS&C GlobeOp Forward Redemption Indicator for September 2021 measured 2.45 per cent, up from 2.24 per cent in August.
"SS&C GlobeOp's Forward Redemption Indicator for September 2021 was a very favorable 2.45 per cent, reflecting lower redemption notices compared to the 3.43 per cent reported a year ago," says Bill Stone, Chairman and Chief Executive Officer, SS&C Technologies. "This improvement marked the fifteenth consecutive month of year-over-year reduction in monthly redemption notices.
"Moreover, the 2.45 per cent level of redemptions is the lowest reading for any month of September since the inception of the Forward Redemption Indicator in 2008."
Like this article? Sign up to our free newsletter Author Profile Related Topics Surveys & researchQuant Insight expands with USD10m in funding
Quant Insight (Qi), a new quantitative financial market analytics and trading insights provider, has announced a major scale up after four years of research and development and over USD10 million in funding from three investment rounds.
The company, which has offices in London, New York and Limassol, has clients with total Assets Under Management (AUM) of over USD2.5 trillion incorporating Qi’s analytics in their investment process. It is led by experienced macro hedge fund portfolio managers and leading academics in machine learning and signal extraction from Cambridge, Harvard and Princeton, in addition to best-in-class data engineers.
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.
Quant insight was co-founded by experienced macro investor and portfolio manager, Mahmood Noorani, who has previously worked at Morgan Stanley, UBS, BlueCrest Capital, Citi Capital Advisors Global Macro Fund, and Credit Suisse. Other key partners in the business include Professor Michael Hobson, Professor of Astrophysics at the University of Cambridge, who authored the Qi White Paper on methodology, which emphatically validated the Qi algorithm, and Professor Ryan Prescott-Adams, an academic leader on Machine Learning and former lecturer at Harvard, who sits on Qi’s Academic Advisory board.
Qi’s investors also include Alan Howard and JP Stein, with additional investors including financial market professionals, the ex-CEO of a major European investment bank, and the Chairman of a top three US investment bank.
Currently, with the rise of the retail trader, Quant Insight is developing an API, which allows them to partner with online brokers and messaging platforms, granting retail investors access to some of the cutting-edge analytical tools and trading signals that are being used by institutional investors.
Mahmood Noorani, Co-Founder and CEO for Quant Insight, says: “For too long the investment world has relied on a mixture of subjective research, educated guesses and an abundance of data that has made accurate decision-making impossible.
“To tackle this endemic problem, we have combined advanced mathematics, data science, machine-learning, and decades of financial expertise to create a fully-automated financial market brain, RETINA, that scans markets globally, intraday, ingesting millions of data points daily on high frequency macro information, to identify high probability opportunities and deliver signals in real time.
“It’s not a coincidence that the world’s best known hedge funds and asset managers use Qi. Our growing client base of institutional investors has been universally positive, and we have a number of exciting partnerships, product updates and major announcements to unveil over the coming months, particularly as we tackle the retail investment market with increasing efficiency.”
New Director appointed at Oxford-Man Institute
Professor Álvaro Cartea has been appointed as the new Director of the Oxford-Man Institute of Quantitative Finance (OMI), an academic research institute at the University of Oxford that specialises in machine learning and data analytics within quantitative finance.
Professor Cartea brings significant expertise in algorithmic trading, mathematical finance, financial economics, asset pricing and energy markets to the leadership role. The Oxford-Man Institute is in its 15th year of continuous operation at an exciting time within quantitative finance for advances in machine learning, vast data availability and high-performance computing.
Álvaro is currently Professor of Mathematical Finance in the Mathematical Institute, University of Oxford, and a member of the Mathematical and Computational Finance Group. He is founding member and Deputy Chairman of the Commodities & Energy Markets Association (CEMA). Before coming to Oxford, Álvaro was Reader in Mathematical Finance at University College London. He was also previously JP Morgan Lecturer in Financial Mathematics, Exeter College, University of Oxford. Álvaro obtained his doctorate from the University of Oxford in 2003.
Additionally, Álvaro is the Editor-in Chief of the Applied Mathematical Finance Journal and a member of the Editorial Boards of the Market Microstructure and Liquidity Journal, the Journal of Commodity Markets and the Journal of Energy Markets.
Álvaro succeeds Professor Stephen Roberts FREng as OMI Director, who leaves the role after five years of successful leadership. Having pioneered the OMI’s transition into machine learning and data analytics research in quantitative finance, Professor Roberts joins an exclusive set of former OMI Directors who have made significant contributions in the fields of quantitative finance, machine learning and statistical modelling. Former OMI Directors include Neil Shephard, now the Frank B Baird Jr, Professor of Science at Harvard University, and Terry Lyons, Wallis Professor of Mathematics at the University of Oxford and Fellow of the Alan Turing Institute, the UK’s national institute for data science and artificial intelligence.
The University of Oxford and Man Group have worked in collaboration since 2007 when Man Group provided cornerstone funding for the OMI and simultaneously opened its co-located commercial research laboratory. Together, the OMI and Man Group’s lab have provided new educational and commercial employment opportunities for quantitative finance researchers, developing and implementing cutting-edge advances in machine learning within systematic investment management.
Professor Álvaro Cartea, Director of the Oxford-Man Institute, says: “This is a unique opportunity to be part of a world-class research institute. I look forward to working alongside leading academics, young researchers and industry participants to address fundamental problems in quantitative finance with a strong focus on data-driven models.”
Luke Ellis, CEO of Man Group, says: “We are delighted that Professor Álvaro Cartea will be leading the Oxford-Man Institute as Director, and look forward to his deep expertise in quantitative finance and algorithmic trading both strengthening the OMI’s academic research and opening new pathways for collaboration with Man Group. Our unique collaboration with the University of Oxford has enabled the firm to implement real-world applications of cutting-edge quantitative finance research, most recently in machine learning and data analytics, thereby ensuring we remain at the forefront of systematic investing and delivering value for our clients.”
Professor Sam Howison, Head of Mathematics, Physics and Life Sciences Division, University of Oxford, adds: “I am delighted that Álvaro is taking on the leadership of the OMI at such an exciting time. The OMI's interdisciplinary focus on quantitative finance, and its highly valued partnership with Man Group, are distinctive on the world stage but very much in keeping with Oxford's holistic view of science as it tackles the challenges of the 21st century. I wish Álvaro and OMI every success over the coming years.”
Northern Trust takes equity stake in Essentia Analytics
Northern Trust is to take an equity stake in Essentia Analytics, a provider of behavioural analytics and consulting services.
The addition of Essentia behavioural analytics solutions is an extension of Northern Trust Whole Office, a strategy that facilitates client access to new technologies, services and solutions across the investment lifecycle.
“We continue to pursue a strategy that combines Northern Trust’s global architecture with innovative partners like Essentia to help clients maximise the value of their data and optimsze investment performance,” says Pete Cherecwich, President of Corporate & Institutional Services at Northern Trust. “Essentia’s next generation data analytics technology allows institutional investors – both asset managers and asset allocators – to embed data-driven feedback into their investment process. Through our Whole Office partnerships, Northern Trust clients across the globe can access advanced technology, skills and services designed to help them make repeatable and measurable decisions in the quest to deliver alpha.”
Essentia Analytics combines data analytics, client-driven “nudges” and specialist behavioural coaching to provide a powerful feedback loop for active investment decisions. It helps investment teams understand where and why they succeed and where their blind spots are -- and delivers the framework to enable a cycle of continuous improvement.
Working with foundational investment portfolio data from Northern Trust filtered through Essentia’s proprietary process, investors can gain insight into their more skilled and less successful investment patterns, at both the firm and individual level, in order to optimise decision making.
“As asset managers and allocators seek to maximise alpha, it is crucial that they are able to identify behavioural biases and decision-making deficiencies and adjust their approach accordingly,” says Clare Flynn Levy, Founder and CEO of Essentia Analytics. “We look forward to the opportunity to work with Northern Trust to bring enhanced productivity and investment performance to the front office of clients across the globe.”
Strategic consulting firm Acclinate LLC introduced Northern Trust and Essentia.
Founder of USD90m cryptocurrency hedge fund sentenced to more than seven years in prison
He Qin, founder of the Virgil Sigma Fund LP (Virgil Sigma) and the VQR Multistrategy Fund LP (VQR), a pair of cryptocurrency hedge funds in New York, which claimed to have over USD100 million dollars in investments, has been sentenced to 90 months in prison.
On 4 February, 2021, Qin pleaded guilty to one count of securities fraud before US District Judge Valerie E. Caproni, who imposed the sentence.
US Attorney Audrey Strauss says: “According to Stefan He Qin, founder of Virgil Sigma and VQR, a pair of cryptocurrency hedge funds in New York, Virgil had a stated market strategy of ‘market neutral,’ safe investments. Qin’s investors soon discovered that his strategies weren’t much more than a disguised means for him to embezzle and make unauthorised investments with client funds.
"When faced with redemption requests he couldn’t fulfil, Qin doubled down on his scheme by attempting to plunder funds from VQR to satisfy his victim investors’ demands. Qin’s brazen and wide-ranging scheme left his beleaguered investors in the lurch for over USD54 million, and he has now been handed the appropriately lengthy sentence of over seven years in federal prison.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Legal & Regulation North America'Rising star of hedge funds' launches Quadratic Deflation ETF
Asset management firm Quadratic Capital Management has launch the Quadratic Deflation ETF (NYSE Arca: BNDD).
Managed by Nancy Davis, Quadratic Capital Management’s Founder and Chief Investment Officer who has been dubbed a rising star of hedge funds', BNDD seeks to profit from a variety of challenging environments including lower growth, deflation, lower or negative long-term interest rates, and/or a reduction in the spread between shorter and longer-term interest rates by investing in US Treasuries and options.
In the US, government debt levels have soared recently amid multiple rounds of fiscal stimulus in response to the Covid-19 pandemic. Other recent trends include an ageing population, advancements in technology, tax increases and increasing productivity.
“Some investors have expressed concerns that the US will experience an environment similar to Japan given the debt increase and labor market. Quadratic Capital aims to help these investors achieve their goals using our expertise in the interest rate and options markets,” says Davis. “It’s prudent for investors to have tools available to them so that they are prepared for a wide range of economic outcomes and environments.”
The BNDD portfolio is mainly comprised of long-dated US Treasury bonds, which are enhanced by a portfolio of options. Bonds tend to perform well during times of deflation, due to low interest rates. When interest rates fall, bond prices typically rise. The options portion of the portfolio is expected to increase in value with the compression of the spread between shorter and longer-term interest rates.
The options within the BNDD portfolio are traded on the over-the-counter (OTC) interest rate markets, which are typically not available to most investors. Quadratic Capital Management is on the forefront in the effort to provide access to this market for all investors.
BNDD may help investors during times when other parts of their investment portfolios struggle.
Like this article? Sign up to our free newsletter Author Profile Related Topics Funds ETFs Launches & FundraisingHedge fund Brevan Howard and quant trader DRW invest in Edge Focus
Edge Focus, a technology company that applies machine learning and artificial intelligence to analyse credit, has entered into a strategic partnership with prominent hedge fund Brevan Howard and global quantitative trading firm DRW.
“I cannot think of two better complementary partners to enable us to accomplish our ambitious goals while using our technology to lower the cost of capital for millions of borrowers,” says Elliott Lorenz, co-founder and CEO of Edge Focus.
“We are delighted to partner with Edge Focus, whom we view as an exciting and innovative manager in the field of consumer credit,” says Aron Landy, CEO of Brevan Howard.
“At DRW, we have witnessed first-hand the power of sophisticated technology to disrupt the status quo and drive rapid innovation,” says Adam Garner, DRW Partner. “Edge Focus has a compelling vision for using cutting-edge machine learning techniques to radically change the consumer lending landscape.”
This partnership will allow Edge Focus to further develop their technology, expand their team, and grow their footprint within different fintech asset classes including real estate, autos, and point of sale.
“We are very impressed with the team's differentiated tech-enabled approach and are delighted to partner with Edge Focus to expand credit to mainstream US consumers,” says Renaud Laplanche, CEO of Upgrade.
Edge Focus is reshaping fintech lending by disintermediating traditional lending market structure. Their proprietary technology allows them to source from a variety of channels and work with lending partners to underwrite credit and forecast defaults with a high degree of accuracy. This allows Edge Focus to curate investment portfolios for institutional clients to match their risk return objectives while having the meaningful impact of lowering the cost of capital for borrowers and providing access to those who have been traditionally overlooked.
The company’s pricing technology is designed to assess any individual’s credit risk exclusive of race, gender or other personal identifiable information. As a minority owned and operated firm, consideration for environmental, social and governance (ESG) impact is at the heart of the company’s business practices.
Edge Focus is also launching two new institutional investment strategies as part of the deal, which will allow them to strengthen and form new partnerships with fintech platforms and loan originators.
Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & Transactions Investments Technology & software solutionsTop Aussie hedge fund manager banned for market manipulation
The Australian Securities and Investments Commission (ASIC) has banned Dylan Christopher Rands, of Sydney, NSW, from providing financial services for five years after finding he engaged in market manipulation.
Rands was a former dealer and portfolio manager at AUD2 billion hedge fund group Regal Funds Management Pty Ltd (Regal). As part of his portfolio-manager role, Rands managed trading in Clearview Wealth Limited shares, which were held in several Regal funds.
ASIC found Rands engaged in manipulative trading in relation to Clearview Wealth shares and breached the Corporations Act when, between December 2018 and June 2019, he entered into 112 uncommercial transactions which created, or were likely to create, an artificial price for the shares of Clearview Wealth.
On 27 March 2018 and 31 May 2019, ASIC says Rands also created a false or misleading appearance of active trading in Clearview Wealth.
His pattern of trading involved purchasing Clearview Wealth shares which had the effect of increasing or restoring the Clearview Wealth share price shortly following a price fall. Such trading displayed an absence of commerciality, in circumstances where Mr Rands’ objective was to exit the Clearview Wealth position he managed at Regal, which he ultimately sold in June 2019.
Rands has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC’s decision.
Like this article? Sign up to our free newsletter Author Profile Related Topics Legal & RegulationSouth Street Securities adds MD to Equity Finance Team
South Street Securities LLC (SSS) has appointed Andrew Leone as Managing Director in its Equity Finance Team.
"We are in our next phase of growing our Equity and technology offering and I see Andrew's experience and knowledge as the perfect fit for our team and expanding our client base," says Anthony (Tony) Venditti, Managing Director of South Street Securities. "I am thrilled that Andrew has the lead role in Equity Finance at our firm. We wish him the best of luck!"
Leone joined South Street Securities LLC in September 2021 as Managing Director of Equity Finance. He is imperative in cultivating the Equity Finance and Delta 1 trading business.
Prior to joining SSS, Leone spent six years with Nomura Securities from 1998-2004. In 2004, he joined Satellite Asset Management, a multi-strategy Hedge Fund as Head of Securities Lending and Equity Derivatives. In 2010, Leone joined MUFG where he successfully built out the securities lending and equity derivatives platform. Over his 23 year tenor, he was responsible for building and managing multiple securities financing businesses and teams.
Leone attended Villanova University. He is also FINRA Series 7, 24, 55 and 63 registered.
"I am excited to join South Street Securities because we are expanding into other specialty businesses with a team of experts who have a vision to drive the firm into the forefront of the financial community," says Andrew Leone, Managing Director, South Street Securities LLC. "It is a breath of fresh air being part of a high energy team that not only has the mindset to grow into traditional securities businesses, but also has their own technology platform that could help quickly reach our goals."
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsMan GLG unveils new global sustainability-focused long/short hedge fund
Man GLG, the discretionary investing unit of London-listed global alternative investment giant Man Group, has launched a new sustainability-focused long/short equity hedge fund which will trade across regions and sectors with a positive ESG bias.
The Man GLG RI Global Sustainable Growth Alternative UCITS strategy – which is classified as an Article 8 product under the EU’s Sustainable Finance Disclosures Regulation (SFDR) – is targeting absolute returns. It takes a positive ESG bias in global markets, combining a high-conviction long portfolio of 25-45 stocks with a short book designed to hedge market and factor risk. The short portfolio also aims to boost the alpha generation of the long positions.
“In a changing world, we believe the strongest companies will prioritise sustainability, and that customers, talent and shareholders will gravitate to sustainable businesses,” said lead portfolio manager Rory Powe, who currently manages over USD3 billion in European equities, and co-manages Man GLG’s existing global, long-only RI Global Sustainable Growth fund with co-portfolio manager Virginia Nordback.
Powe will run the strategy alongside co-PMs Nordback and Ikitsa Anastasov, and a team of four analysts. The group will tap into Man Group’s broader ESG expertise, taking positions in firms that prioritise sustainability and have a positive impact according to the UN’s Sustainable Development Goals.
“This fund will seek to invest in the best of these companies, wherever they are in the world, leveraging Man Group’s broader ESG expertise, and combined with a short portfolio designed to underpin the fund’s ambition to generate returns in all market conditions,” Powe added.
The long portfolio is split between core positions – long-term investments in the world’s strongest companies with leading ESG companies – and second tier stocks.
The core names will represent 60-100 per cent of the long portfolio and is made up of those companies that meet all five of the team’s investment criteria: formidable competitive leadership and purpose led culture; resilient and growing revenues; robust profitability; attractive cash flow characteristics; and full reporting on greenhouse gas emissions.
The second tier – comprising up to 40 per cent of the long portfolio – includes firms that are on track to improve their sustainability credentials and meet the criteria within five years.
Meanwhile, the short book aims to curb factor risk and reduce drawdown risk, targeting bottom-up single stock shorts, while leaving the idiosyncratic and ESG bias of the long portfolio unhedged.
Established in 1995, later becoming part of Man Group in 2010, Man GLG today manages USD32 billion in assets across various long/short and long-only strategies.
Man Group – a global alpha-focused investment group which runs a broad range of discretionary and quantitative strategies in traditional and alternative sectors, and often seen as a bellwether for the UK hedge fund industry – has more than USD135 billion in assets under management.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics ESG & Responsible Investing Investments Long-short investing UK