Hedgeweek Interviews
New white paper outlines best practices in private credit responsible investment strategies
Benefit Street Partners (BSP), a credit-focused alternative asset management firm and a wholly owned subsidiary of Franklin Resources, and Malk Partners (Malk), an adviser to private markets on ESG and impact investing, have published a co-authored white paper detailing environmental, social, and corporate governance (ESG) integration and considerations in the private credit investment process.
The white paper, “ESG Integration in Private Credit,” provides a practitioner’s guide to imbuing ESG into a manager’s initial underwriting diligence and demonstrating why applying an ESG approach alongside other operational, legal, and commercial diligence may lead to better risk-adjusted investments. The paper includes supporting case studies and outlines ESG criteria for companies to consider.
BSP’s Managing Director, Allison Davi, says: “Private credit managers have faced challenges integrating ESG considerations into the investment process in a meaningful way given the limited ESG data available, as well as not having the same influence or access to information as controlling equity owners. We believe that the best way to integrate ESG into our investment process is by partnering with an independent ESG specialist who can diligence opportunities alongside our investment team and present findings without bias. Utilising this additional information, we can work to develop better ESG data which will drive constructive dialogue and better investment decisions.”
“It’s a really exciting time to be working at the intersection of Private Credit and ESG,” says Chase Jordan, Vice President at Malk. “I think ESG is a management system revolution. It has evolved from being a fringe set of considerations to the mainstream way of mitigating operational risk and capturing additional value. The old paradigm of ‘ESG is just an equity owner’s concern’ has successfully been challenged. Creditors are stepping up alongside PE sponsors and management teams to advance these best practices. Malk thoroughly reviews risk factors and conducts asset-level analyses to give credit managers a more comprehensive view into a company’s risk profile, which then results in a more confident investment.”
BSP partners with Malk in order to establish consistent and rigorous underwriting practices, enhance existing monitoring efforts, and position its commitment to ESG integration as a competitive advantage. Some of the topics examined in the white paper are:
• Why management of ESG risks from an asset-level evaluation is often preferable to an industry-level analysis;
• How company-specific analysis with ESG criteria gives credit managers an expanded perspective on investment risk;
• A view on the future state of ESG in private credit, and the challenges the industry faces.
Like this article? Sign up to our free newsletter Author Profile fiona.mcnally Employee title Reporter Linkedin Related Topics ESG & Responsible Investing Surveys & research White papersHow EJF Capital is positioning for inflation as central bank moves recalibrate market dynamic
EJF Capital, which invests long-only and long/short in both equities and credit across the financial services spectrum, believes it is well-placed to navigate the evolving investment landscape, as inflation looms large over markets and the European Central Bank begins winding down its emergency bond-buying pandemic support programme.
Peter Stage (pictured), EJF Capital’s co-senior managing director in Europe, said inflation continues to be a “topic du jour” across markets, with much of the investment landscape for the remainder of 2021 set to be dominated by central bank policy decisions.
But he added that the USD9.5 billion financials-focused alternative asset manager – which invests in both credit and equities across a broad spectrum of financial services spanning banks, insurance and specialty finance firms – can capitalise on the shifting market dynamic.
“As a portfolio manager, what we are trying to grapple with is how we position ourselves to seize opportunities and mitigate any risks we see down the line,” Stage told Hedgeweek.
“The policy overlay is going to be very important. When will they start to taper? How aggressively? There’s still a debate around when the US might move. So the question over whether inflation will be transitory or permanent and the implication for rates will continue to be a live debate, and people will position either for or against.”
Earlier this month, the ECB announced it will start reducing its emergency bond purchases from the fourth quarter onwards, signalling the start of a winding down of its EUR1.85 trillion (USD2.18 trillion) Pandemic Emergency Purchase Programme (PEPP) scheduled to run until March next year.
The move to unwind the stimulus – which has bolstered the bloc’s economy over the course of the Covid-19 pandemic – comes as inflation rises and markets continue to rebound.
“I think they’ve done the right thing,” says Stage, who is responsible for identifying and managing investment opportunities across European fixed income, equity and private markets at EJF with a focus on banking and specialty finance.
“I think they should taper the pandemic response element, because they need to signal that we are through the worst of the pandemic.
“Broadly, we clearly see far less inflationary impulse in Europe than we do in the US or the UK. So, I would not be surprised to see some form of replacement, called something else, when the PEPP actually rolls off, because the big question over inflation right now is whether it’s transitory or persistent – and that’s a very difficult question to answer and the ECB clearly thinks we need to generate more inflationary impulse in Europe.
“However, it doesn’t take much of a change in perception for rate markets to move dramatically. At such low levels, even a modest change is a large percentage change, so we are very conscious of that.”
In Europe, the London-based manager has a particular focus on unique, smaller, less well-known issuers where the firm looks to generate high-yields in assets which can make mark-to-market gains.
“We have a nuanced approach to credit investing in the financials space. That gives us a lower correlation to the market in general, which is part of what we’re seeking,” he added.
While credit assets may be expected to be impacted more by higher inflation than equities owing to their fixed coupon, Stage believes the higher returns offered by EJF provide a greater buffer against mark-to-market moves and any inflation risk if it materialises.
“Our assets are returning higher so on a relative basis we think they are better protected. That doesn’t mean we are complacent, but we believe they are better protected than many generic credit assets,” he added.
“The market is still very open, despite the fact there may be some inflationary discussion, and it’s very much a sellers’ market for large benchmark issuers. For our bonds, which are more off-the-run, smaller, more nuanced and more niche, the relative value that they display is even more attractive and gives them more defensibility and upside.”
Expanding on this point, Stage said: “Our approach is to forge links with small banks, insurance companies and specialty finance players and create assets that otherwise might not ordinarily exist, but which makes sense for them – whether it’s achieving their regulatory requirements, or help them achieve good funding, which means they're not forced to raise equity.
“This gives us a good returning asset that has the chance to reprice through time as the catalyst plays out.”
This, he observed, offers lower correlations to broader market assets because the returns do not simply hinge on beta. “Rather, it’s dependent on whether you’ve created an asset with catalysts that can be realised.”
In equities, meanwhile, Stage said a degree of inflation is a “positive”, but stressed the ECB’s decision will likely stave off a rise in the near-term, adding that the firm’s positioning in equities is informed more by idiosyncratic catalysts at individual companies.
“Inflation should lead to higher rates, and higher rates are generally good for banks, insurance companies and also specialty finance in many instances,” he said.
“However, we’re not relying on that in Europe – because that will need time to come through, and the ECB is really signalling ‘lower for longer’. Instead, when we buy bank equities in Europe we’re looking for catalysts other than rates.”
These include capital return, in the form of dividend payouts and buy-backs, he added.
“If you look at our portfolio, and what we’re doing, it does display an element of lower correlation to the broader market, and that is definitely attractive to allocators,” he explains.
New DiligenceVault white paper explores 'How RFPs and DDQs Get Done'
DiligenceVault, a digital diligence platform that delivers data collection and information exchange solutions for asset owners, allocators and fund managers, has released its latest white paper entitled "2021 Manager Survey: How RFPs and DDQs Get Done."
The paper presents the results of its recent survey of over 170 private equity, hedge and long-only managers fund managers exploring how marketing, investor relations and compliance professionals are optimising their staffing, processes and technologies to meet the due diligence needs of the allocator community.
The primary areas of focus for the survey are centred around Investor Requests and Team Sizes, Consultant vs Third-Party Database Engagement, Industry Standard and Custom Questionnaires and dedicated RFP/DDQ Technology. Points of interest from the survey include:
• On average, 32 per cent of allocators will accept a pre-filled, industry standard DDQ
• Nearly 60 per cent of allocators send a custom DDQ to managers for them to fill out
• 12 per cent of managers with AUM between USD1 billion to USD10 billion receive between 100-500 RFPs/DDQs requests a year. That number jumps significantly, though, to 40 per cent for managers in the USD10 billion to USD50 billion AUM range.
• 40 per cent of managers with AUM between USD10 billion-USD50 billion use a dedicated RFP/DDQ technology to respond to investor requests. 64 per cent of managers with AUM between USD50 billion-USD100 billion and 71 per cent with AUM over USD100 billion do the same.
Monel Amin, Founder and CEO of DiligenceVault, says: "As both allocators and fund managers continue to look for efficiencies across their organisations, the manager research and due diligence process is also benefiting from advancements in technology. With the increasing deluge of information requests from the investor community, fund managers have begun to recognise that better tools are needed to optimise their communication with investors to win new business. DiligenceVault has developed an industry-leading set of solutions for fund managers to help them better organise their content, track information requests, collaborate across the organisation, and respond to investors quicker and easier."
Like this article? Sign up to our free newsletter Author Profile Related Topics Surveys & research White papersPGIM appoints new CEO of QMA
PGIM has appointed Linda Gibson as CEO of its USD119 billion quantitative equity and multi-asset solutions specialist, QMA.
Gibson has been with QMA since July 2019 as chief business officer and will step into the CEO role on 15 October.
“Linda brings nearly thirty years of global leadership experience across multiple business functions and a strong understanding of the asset management industry,” says PGIM CEO David Hunt. “This is an exciting time for the firm.”
“I’m honoured to be leading this firm into the next phase of its development,” Gibson says. “Over the last few years, we have built on our quant heritage to provide increasingly diversified and customised solutions to address the evolving needs of our clients. I am firmly focused on building on that progress.”
Gibson joined QMA in mid-2019 having previously served in a variety of executive leadership positions at BrightSphere Investment Group, a publicly traded asset manager with more than USD225 billion of client assets at the time of her departure.
Hunt added that QMA’s current CEO, Andrew Dyson, was stepping down for personal reasons unrelated to the business and both had earmarked Gibson for the role over the past year.
The CEO change comes as QMA announced it is rebranding to PGIM Quantitative Solutions and its launch of a dedicated Defined Contribution unit, PGIM DC Solutions.
Gibson said the firm’s rebrand will be effective on 28 September and the name was chosen to reflect the close ties with parent PGIM, one of the world’s largest asset managers, as well as its expanding capabilities and customised solutions in recent years. QMA Wadhwani will now be called PGIM Wadhwani, and its investment team will continue to work independently within the PGIM Quantitative Solutions business.
“Since her arrival, Linda and I have worked closely to position the firm for the future, as marked by QMA’s rebranding and the smooth succession of the firm’s leadership,” says Dyson. “She has been a tremendous partner in building QMA’s capabilities and is the ideal candidate to lead PGIM Quantitative Solutions into the future.”
The evolution of PGIM Quantitative Solutions continues with the launch of its DC Solutions unit, a cross-PGIM initiative, which will focus on innovative retirement solutions founded on market-leading research and built on the USD214 billion of assets already managed by PGIM on behalf of DC clients across multiple asset classes and vehicles.
“The market is increasingly demanding a comprehensive approach to retirement income, which requires a range of new thinking and solutions, deployed in a flexible way,” Gibson says. “We have created PGIM DC Solutions to spearhead that effort and target market leadership in this new arena.”
The firm recently hired leading retirement expert David Blanchett as head of retirement research for defined contribution solutions. Blanchett was formerly head of retirement research at Morningstar Investment Management. Dyson will stay on as special adviser and acting head of PGIM DC Solutions until the end of March 2022.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsCausality Link launches third generation of AI-driven financial research platform
Causality Link, an advanced, AI-driven financial information technology provider, has launched the third generation of its platform. The technology now includes automated hourly alert queries, the Key Performance Indicator (KPI) Navigator Tool, an expanded scope of system detection and more.
The Causality Link platform is an AI-powered system that collects millions of documents globally, in real-time, to identify explicit cause-and-effect statements relating indicators and events, aggregating the knowledge of thousands of authors into a single deductive system. Having processed and analysed more than 100 million texts in 27 languages spanning the past seven years of market activity, the platform provides a global look at the forces acting on the financial markets.
With the new features, the platform now enables precise alerts on specific news derived from its analysis of over 8,000 newspaper sources and government publications. These automated alert queries produce hourly notifications on new content relevant to any KPI of a company, industry, country or portfolio. The queries leverage both the causal graph and signal extracted from texts to define the scope of the analysis and issue precise alerts for each KPI driver. Accessed through the platform’s Data-as-a-Service (DaaS) API, users can also input Bayesian Network (BN) queries to generate BNs around specific KPIs, providing a maximum coherence aggregated thesis. These BNs are used to generate trading signals or compare the thesis extracted from the news to a locally developed one.
The KPI Navigator Tool leverages big data analytics queries to identify causal drivers and associated trends over multiple years of content. Users can select among any combination of thousands of indicators, geographies and industries indexed by the system and view aggregated statistics that cite the drivers, frequency and detailed quotes where authors explain causal connections.
The platform’s core natural language processing (NLP) has been extended to better understand events and causal links between events. The new architecture is now updated every two weeks with new concepts detected with its proprietary topic trending software, enabling a continuous semi-automatic adjustment of the ability to understand and analyse discussions about emerging concepts, such as ESG and cryptocurrency. Among other enhancements, the platform now recognises discussions about exchange rates covering over 70 currencies.
“We are extremely proud of the advancements our team has made in expanding the breadth and depth of concepts the platform can recognise. Our improved tooling not only increases automation for our technology moving forward, but also presents an opportunity for industry-wide progress,” adds Eric Jensen, CTO and co-founder of Causality Link. “Our work with international partners has resulted in a greater focus on global regions and stock exchanges. As a result, both indexes have more than doubled since the last major release, allowing us to track discussions referencing over 180 operating exchanges worldwide.”
Additional new features include:
Expanded ontology – In addition to increasing the platform’s ontology and supporting continuous updating, the firm has introduced the ability to dynamically add new types of descriptors on top of the existing ones: location, industry, company and product. This increases the flexibility and descriptive power of the data model. Users can now drill deeper into descriptors. For example, it is now possible to isolate the type of energy that powers a car or the gender of government program recipients.
Updated SaaS application – The Software-as-a-Service (SaaS) application that gives users access to real-time analysis of its licensed content has been updated to incorporate the breadth and depth of new NLP precision, continuing to ensure that access to underlying content is intuitively available and can sort and filter through even tens of thousands of articles with ease.
“Causality Link offers a unique new way to analyse worldwide news including ESG news. I am convinced that the understanding of “why” will become essential for all future decisions in that important space,” says Matthieu Keip, Innovation Lead, Amundi Technologies.
Over 300 female managers picked for 100 Women in Finance’s flagship cap intro event
100 Women in Finance, the 20,000-member global industry association for hedge fund, alternatives and investment management professionals which aims to empower women within the global finance industry, has picked more than 300 female fund managers to participate in this year’s Global FundWomen Week, its annual flagship capital introduction event taking place from 20-24 September.
Launched in 2014, Global FundWomen Week – which takes place virtually for the second year, hosted on capital introduction technology platform iConnections – provides an opportunity for leading female fund managers to schedule one-on-one capital introduction meetings with institutional allocators.
More than 300 institutional allocators have already registered for this year’s event, which will offer a full week of expert panel discussions, fireside chats open to all conference participants, and interactive chat features to discuss industry issues. The registered funds include strong representation from across EMEA, North America and APAC regions.
“The Global FundWomen Week is a chance to elevate women and promote gender and ethnic diversity within the alternative investment community,” said Amanda Pullinger, CEO, 100WF.
“After the success of our 2020 event, we are excited to continue connecting managers and allocators and encourage allocators to register to meet these talented portfolio managers.”
The event aims to strengthen the representation and visibility of female fund managers by fostering connections with institutional investors to encourage capital allocations with female fund managers. It forms part of 100WF’s Vision 30/40 initiative, which aims to see women performing 30 percent of investment team and finance industry executive roles globally by 2040.
Last year’s event connected around 350 of the world’s top allocators with nearly 200 female fund managers. A survey of participants that attended last year’s conference revealed that connections made at the conference led to 22 per cent of managers entering into due diligence discussions and 10 per cent of managers receiving allocations only 6 months after the event.
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Events Professional bodiesAltana’s distressed opportunities hedge fund sizes up equity and credit trades in “forgotten” oil services
Altana Wealth, the credit, currency and special situations-focused hedge fund led by former Trafalgar Asset Managers co-founder Lee Robinson, is circling the restructuring and consolidation opportunities arising from the rebound in demand for oil and gas post-Covid.
The firm’s Altana Distressed Opportunities Fund, which seeks out investment ideas in neglected corners of capital markets, is zeroing in on the offshore oil and gas services sector.
Steffen Dietel and George Yacoub Nadda, co-portfolio managers of the strategy, said this week that the post-pandemic industry reboot will serve up opportunities “rarely seen” in their investment careers.
The fund aims to capitalise on themes emerging within what Altana calls an “over-levered but operationally essential” sector, which over the past decade has seen a debt-financed building boom give way to sharp decline, an “unprecedented” drop in capex following the 2014 oil price collapse, and subsequent “timid” recovery.
Dietel pointed to a “super boom-and-bust cycle” within the sector, which faces the added complexity of a global pandemic and energy transition. Specifically, Covid-19, ESG trends, and energy transition has seen many investors abandon the sector. This, Altana said, has turned offshore oil and gas services into a “forgotten” industry which offers “massive upside” in both equity and distressed credit.
Underpinning this thesis is an anticipated rebound in oil demand to pre-Covid levels set against a significant shortfall in oil supply.
“We think a ramp-up in capital investment is necessary to deal with this situation – that is a key tenet of our strategy going forward,” Dietel added.
The fund invests in the equity and debt of those companies best positioned to survive in this new environment. The strategy’s equities focus targets those companies that have “massively de-levered” balance sheets which can weather the downturn and drive consolidation in the sector. The credit element meanwhile zeroes in on attractive restructuring opportunities and special situations.
Among the strategy’s key bets are as a first lien bondholder in Jacktel – owner of Haven, a single jack-up accommodation rig in the North Sea – where the bond is currently trading in the high-teens, as well as in drilling company Valaris, a restructuring play, and Tidewater, the largest listed offshore vessel name, a key industry consolidator and the fund’s biggest overall position.
The strategy is targeting returns of around 3x over the next two-to-three years. So far, the fund has generated gains of more than 50 per cent year-to-date.
Established in 2010 by hedge fund veteran Lee Robinson – who earlier co-founded event driven hedge fund Trafalgar Asset Managers and helped build Tudor Investment Corp’s risk arbitrage business – London and Monaco-headquartered Altana today manages a range of niche alpha strategies spanning credit, event driven, systematic and cryptocurrencies, with around USD700 million 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 InvestmentsApex Group partners with VCP Advisors to create Apex VCP
Apex Group Ltd has entered into a joint venture with VCP Advisors, a provider of financial, advisory and capital raising services for corporate and fund manager clients.
VCP Advisors works with companies as well as closed-ended and open-ended funds across the private equity, private credit, venture capital, infrastructure, real estate and hedge fund asset classes, to provide advisory, capital raising and restructuring services to the institutional and family office investor community.
As part of this strategic partnership, VCP Advisors will re-brand as Apex VCP, enabling clients to benefit from VCP’s impressive track record in alternative asset management advisory, in addition to delivering access to the wider Apex Group’s single-source solution; across depositary, custody, digital banking, ManCo, fund administration, middle office, corporate services, a digital marketing platform and an ESG Ratings and Advisory solution.
The joint venture further supports the Group’s expansion strategy for global fund marketing and distribution services. This announcement follows the recent launch of CSSF-regulated FundRock Distribution SA, to provide fund distribution solutions to non-EU asset managers, and the acquisitions of ARM Swiss Representatives SA, a leading provider of Swiss Representation and Distribution services to foreign fund managers, and Senasen Group, a digital marketing platform provider designed to connect LPs and GPs and support the capital raising process.
Peter Hughes, CEO and Founder of Apex Group, says: “We are pleased to be partnering with VCP to bolster our service capabilities in the Placement Agent space. The team has an impressive understanding of their clients’ investment strategies and portfolios, and by joining forces with our Group, collectively we are strategically placed to offer these managers the services they require, delivered globally by as single provider.”
Henry Talbot-Ponsonby, CEO and Co-Founder of VCP Advisors, adds: “We are excited by the partnership with Apex Group and the ability to leverage their global reach, broad, high-quality service offering and institutional client base to provide our clients with access to compelling opportunities in the alternative investment sector and help them to achieve their strategic and financial objectives.”
JTC acquires Segue Partners
JTC, a global professional services business, has acquired Segue Partners (Segue), a fund services provider head-quartered in St Louis, Missouri, USA.
The initial consideration will be settled in cash and JTC equity. A further consideration is available on the achievement of performance targets in 2022 and 2023.
Michelle Murray, Managing Director and Founder of Segue Partners, created the business in 2010 and has led its successful growth since. Murray is a highly respected financial services professional and entrepreneur with over 28 years’ experience in venture capital and public accounting industries.
Segue differentiates its offering based on quality of service and combines an intimate understanding of institutional limited partners with a ‘white glove’ investor relations service. The business provides a range of sophisticated fund solutions to meet the needs of private equity, venture capital, debt funds and family offices. Segue also delivers accounting services specifically designed to meet the needs of entrepreneurs, portfolio companies and start-ups.
Murray will continue to lead the business, becoming a member of JTC’s Institutional Client Services (ICS) US regional management board. All 12 other Segue employees will also join JTC, becoming part of the Group’s Institutional Client Services (ICS) Division. The transaction is not subject to any regulatory approvals and completes with immediate effect.
Segue will enhance JTC’s fund services presence in the US, providing an additional scalable platform that is well positioned for growth and complements the Group’s existing US footprint, including its focus on world-class technology. Concurrently, JTC’s more than 30 years of experience in serving listed funds and international clients in a global market that is increasingly complex and highly regulated will confer huge benefits to Segue’s existing and future clients.
Segue’s Midwest location facilitates expansion throughout North America and the company has strong and long-lasting relationships with a diverse range of clients across 10 US States and Canada. The acquisition brings with it a depth of asset class expertise, particularly within the venture capital space.
The US is an important growth market for fund services, including alternative asset classes such as private equity, venture capital, real estate, debt and hedge. The prevalence of outsourcing for fund services is lower than levels seen in Europe, offering further opportunities for strong growth and Segue, with its established reputation for client service excellence, is well positioned to capture new business with the backing of JTC’s global scale and platform.
In the financial year ending 31 December 2020, Segue delivered revenue of USD1.5 million a 17 per cent increase from the previous year and underlying EBITDA in excess of 20 per cent. The business has continued to grow strongly and there are opportunities for further growth in revenues and margins as a result of leveraging JTC’s scale, both in the US and internationally.
Nigel Le Quesne, CEO of JTC, says: “We are very pleased to announce the acquisition of Segue, which is a high quality addition to our strategically important and fast-growing US business. Michelle and her team have built a reputation for delivering first-class service and strong growth year on year and we look forward to supporting and accelerating that as they become part of the Group. The cultural alignment with JTC is superb and we offer a warm welcome to Michelle, her team and all Segue’s clients and partners.”
Michelle Murray, CPA, Founder and Managing Director of Segue Partners, says: “I founded Segue with the strong belief that there was a better way to meet the needs of clients based on delivering the perfect blend of experience, service quality and a results-orientated culture. As we seek to expand our business materially and capture opportunities that exists in the US market and beyond, JTC is the perfect partner to help us achieve our goals. Like Segue, JTC has the highest of standards and constantly strives to exceed client expectations. We are excited to become part of a dynamic Group, with such a deep-rooted culture and track record of success.”
Like this article? Sign up to our free newsletter Related Topics Deals & Transactions Acquisitions Finance & InsuranceCanoe Intelligence appoints Blackstone veteran as new CTO
Canoe Intelligence (Canoe), a financial technology company focused on data management processes for alternative investors, wealth managers, asset servicers, and capital allocators, has appointed Vishal Saxena as its new Chief Technology Officer.
Saxena brings over 20 years of academic and industry experience within financial services to his new role. He will leverage his experience in team building, process optimisation, software development, project management and alternative and private investments domain knowledge to support Canoe’s growing client base and strengthen the company’s product and technology strategy.
Prior to joining Canoe, Saxena was a Managing Director in the Blackstone Technology and Innovations group. During his tenure at Blackstone, Vishal oversaw application development for several business systems and enterprise platforms, including the integration of fund accounting systems with Canoe’s automated technology, and supported various corporate functions. Recognising the efficiencies gained from Canoe at Blackstone, Vishal was motivated to join Canoe as an executive team member to aid in driving Canoe’s growth and industry adoption.
Prior to joining Blackstone, Vishal led various software development teams at Capital IQ, a division of Standard & Poor’s, where he was most recently Director of Data Technology. Before Capital IQ, he held various software development roles at Morgan Stanley, Citigroup and Sapient.
“We are thrilled to officially welcome Vishal to the Canoe team,” says Jason Eiswerth, Chief Executive Officer at Canoe Intelligence. “For almost a year, we’ve collaborated with Vishal while implementing Canoe technology at Blackstone and have been impressed with his ability. Vishal has a highly unique track record of scaling teams and advancing technology solutions within fast-paced environments. I have no doubt that he will help propel Canoe to the next phase of growth as we continue to expand our global client base and help firms automate their alternative investment processes.”
“I’m excited to join the Canoe team and look forward to contributing to the company’s success from both a technology and strategy perspective,” says Saxena. “Canoe is truly modernising the alternative investment space by simplifying data extraction, standardising data ingestion and automating manual business processes and reporting. I’m eager to get started.”
Vishal received a BTech. in Civil Engineering from Indian Institute of Technology, Delhi. He also received a Master of Engineering degree from Massachusetts Institute of Technology, Cambridge, and a Master of Science degree in Engineering from Georgia Institute of Technology, Atlanta. Vishal recently joined the board of Reach the World, a non-profit organisation making the benefits of world travel accessible to classrooms.
MFA launches Partnership Program with regional US alternative investment groups
The Managed Funds Association (MFA), an organisation representing the global alternative investment industry, has launched a partnership programme to support regional and state association growth and further strengthen the voice of the alternative investment industry.
The MFA Partnership Program aims to enhance the collective power of regional and state networks from coast to coast by increasing collaboration, promoting information sharing, building key allocator relationships, and creating a more efficient and effective network to support, educate, and connect in markets across the US.
“MFA is committed to delivering value across the alternative investment industry and we’re continuing to do so by unlocking the collective capacity of our partner organisations,” says MFA President and CEO Bryan Corbett. “The launch of the MFA Partnership Program serves as a critical capstone moment for MFA and our regional partners as we work together to carry forward the important work of creating value for our member firms and the investors they serve—including pensions, foundations, and endowments.”
MFA Partnership Program members receive access to global regulatory and policy briefings; networking opportunities with industry leaders and peers; support for regional and state marketing, events, and strategic planning; a seat on the MFA Partnership Advisory Council to foster collaboration; and access to other select MFA member resources. Additionally, member firms of regional and state association groups receive access to an expanded community network, enhanced educational resources and event programming, as well as the ability to join combined advocacy efforts at the state and federal level.
“We want to support the continued success of our partners by enhancing the ability of regional and state alternative investment industry trade associations to contribute to the best practices in the operational, policy, and regulatory space,” says MFA Chief Commercial Officer Brooke Harlow.
In conjunction with the announcement of the program, MFA also announced today the hiring of Sarah Riley, Head of Association Partnerships, to oversee the MFA Partnership Program. Riley joins MFA after serving as the President and Chief Executive Officer of the Texas Alternative Investments Association where she focused on fostering growth and advancing the development of Texas’ alternative investment industry through support, education, and networking.
“The regional and state alternative trade groups play an important and valuable role in the industry,” says Harlow. “Through this powerful collaboration with the MFA, these groups will have support from a national strategic partner, while still maintaining the identities and brands that make each of them unique.”
MFA Partnership Program members include:
California Alternative Investments Association
Connecticut Hedge Fund Association
New York Alternative Investment Roundtable
Palm Beach Hedge Fund Association
Texas Alternative Investments Association
Macrobond partners with FactSet to deliver equity market and alt-data insights
Macrobond, a provider of global economic, aggregate financial and sector data for finance professionals, has teamed up with financial and data company FactSet to provide top-down researchers with insight into the dynamics of global equity markets.
Macrobond worked with FactSet to build an aggregate version of the US firm’s Quant Factor Library – a point-in-time database of factor insights and consolidated data, including alternative data, from more than 70,000 securities across 127 countries and more than 200 exchanges. FactSet Quant Factor Library helps users detect investment themes across global equity markets, incorporate ideas into their portfolio construction process and transform raw data into actionable intelligence.
The new dataset, which combines FactSet’s deep insights into individual stocks with Macrobond’s cutting-edge platform for top-down analysis, allows users to efficiently form an aggregate view of the market by index, sector, country and other categories. As well as standard metrics such as earnings yields and EPS estimates, it includes a broad range of data such as ownership and corporate governance – including the number of women on boards, executive remuneration and stock buybacks – enabling researchers to explore pertinent themes.
Howard Rees, Chief Commercial Officer, Macrobond, says: “Economists, strategists and asset allocators will welcome a credible new entrant that combines traditional measures, such as PE and EPS estimates, with more topical data such as ESG and investor sentiment. The expansive library of traditional content and alternative data allows additional themes, such as the number of women holding board positions, to be researched and analysed to support investment decisions and builds on Macrobond’s market leading position as a supplier of top down ESG/SRI time-series data.”
Bijan Beheshti, Vice President and Director of Strategy, Risk and Quantitative Analytics, FactSet, says: “Macrobond has an impressive platform for analysing macroeconomics and aggregate financial data. We are very excited to bring FactSet’s Quant Factor Library into this ecosystem. Our partnership enables Macrobond users to leverage powerful equity signals across dozens of global universes for macro research, quant modelling and monitoring markets.”
FactSet’s Quant Factor Library is integrated throughout the FactSet Workstation, accessible via its suite of Analytics APIs and available in highly customised FTP deliverable data feeds.
Like this article? Sign up to our free newsletter Related Topics Services Research & AnalyticsAlgoTrader adds FX banker to Board
AlgoTrader, a global institutional specialist in trading infrastructure for digital and traditional assets, has appointed global financial investment expert Martin Wiedmann to its board.
Wiedmann has 30 years of international investment banking experience with major global financial institutions in Frankfurt, Luxembourg, New York and Zurich, including heading the global FX sales departments at both UBS and Credit Suisse. He holds various board positions, as well as being a member of the Standing Committee of the FX Committee of the Bank of England and of the European Economic Senate. Wiedmann will support the ongoing global expansion of AlgoTrader, especially regarding digital asset banking clients.
“Martin will be an excellent addition to our board and brings in extensive experience. He was the person who drove UBS to number one in the institutional FX space, and with his banking network he will be able to open many doors for us,“ says AlgoTrader founder and CEO Andy Flury.
New challenges and innovation have always been part of his professional career, says Wiedmann: “Digital assets have brought new opportunities for currency trading experts and AlgoTrader provides them with the best trading infrastructure. That is why I am excited to join AlgoTrader in driving a sector that I know very well and that will be fundamentally changed by blockchain technology. I look forward to being part of this change in asset trading.”
Wiedmann replaces Luzius Meisser, who is leaving the Board of Directors at his own request. Flury says: “I would like to thank Luzius Meisser for his dedication and always very goal-directed cooperation in the Board of Directors over the past three years. Now we are greatly looking forward to the expertise of Martin, whom I warmly welcome to the Board on behalf of the company.”
Flury, Roger Altorfer, Martin Trepp and Theo Woik remain on the Board of Directors of AlgoTrader.
Like this article? Sign up to our free newsletter Related Topics Moves & AppointmentsSFOX unveils first hedge fund specific crypto trading platform
Digital asset prime broker San Francisco Open Exchange (SFOX) has unveiled the first-ever cryptocurrency trading product built specifically for hedge funds and asset managers that will provide capabilities previously only accessible by the market’s largest firms.
The broad suite of sophisticated trading and portfolio management services will allow hedge funds for the first time to execute sophisticated trading strategies at scale. In a single platform, SFOX delivers best price execution through deep global liquidity, advanced order types and execution algorithms, treasury management, and detailed trade analytics with flexible settlement ensures fund managers can capitalise on every opportunity presented in the market.
“This first of its kind crypto trading platform is the right product at the right time as institutions of all kinds are rapidly transitioning to investing in digital currencies,” says Chamath Palihapitiya, Founder and CEO of Social Capital, an investor in SFOX. “The technical superiority and unmatched cryptocurrency liquidity at SFOX will bring the hedge fund industry the trading, reporting and compliance services institutions need to embrace cryptocurrency as a new asset class.”
Unlike typical exchanges, SFOX provides traders with a single destination for trading cryptocurrencies from the world’s foremost trading venues - including major exchanges, OTC brokers, market makers. This access to all major trading platforms from a single destination gives hedge funds an edge across the highest priority trading areas: better pricing, enhanced access and best-in-class security. Just as Amazon became the marketplace for buying from many stores and sellers at a single location, SFOX is creating a similar marketplace for crypto. The aggregated liquidity of crypto on SFOX is so vast that a single USD50 million trade of bitcoin would execute in milliseconds without moving the market – 10x more than any exchange.
The most powerful of the SFOX platform’s services is unparalleled plug and play order types and execution algorithms that are tailored to meet the needs of any trading strategy. More than a dozen order types can be utilised that provide traders with complete control over how passively or aggressively to execute, how much information they are giving to the market, risk management, and impactful price improvement all of which ultimately result in higher returns and are available at no extra cost.
“As a former hedge fund manager, I can say that the platform we are introducing today is a total game-changer for funds that are either in crypto today or just beginning to embrace crypto trading,” says Jackson Finio, Head of Product at SFOX. “Hedge fund managers can focus on what they do best, trading, without having to worry about execution, scalability, capital efficiency or any of their back-office reporting and operational requirements.”
SFOX is also unveiling a proprietary Trade Cost Analysis (TCA) program that for the first time is integrated into a crypto trading platform and at no additional cost. TCA platforms for equity trading, for example, are limited solely to large firms that either build their own or acquire these services at a significant cost. TCA capabilities also enable Funds to meet and implement best price execution requirements in crypto for the first time. Funds currently must meet best price execution requirements in trading other equities to demonstrate to clients and regulators that firms are making their best effort to acquire assets for clients at the best price.
“We’ve built a platform that gives any hedge fund access to all the same tools and resources previously only accessible and available to the most well-resourced trading firms in the world and at no to low cost,” says Akbar Thobhani, CEO and Co-Founder of SFOX. “We know that running a fund is hard. When a market and regulatory environment are already fragmented and constantly changing, it makes running a crypto fund even harder. We want to be an ally to every hedge fund embracing cryptocurrency investing and trading.”
Hedge funds are SFOX’s fastest-growing trading segment, with 18x increase in trading volume year over year. Hedge funds in particular are finding compelling opportunities that drove a 10x increase in the average volume per customer over the past year.
SFOX also offers flexible settlement options, including Instant Settlement for pre-funded transactions and Post Trade Settlement (PTS), which allow hedge funds to avoid pre-funding using a line of credit granted by SFOX. With PTS, hedge funds can trade on credit and settle any outstanding amounts flexibly on a timeframe that suits a trader's needs, ensuring they never miss an opportunity due to insufficient funds.
Like this article? Sign up to our free newsletter Related Topics Digital Assets Trading & ExecutionEuropean alternatives on track for record fundraising year, says Preqin
Europe-based alternative asset fund managers now hold EUR2.06 trillion in assets under management (AUM) as of December 2020, up from EUR1.81 trillion a year ago – an increase of over 13 per cent – and are on track to make 2021 a record year for fundraising, according to Preqin's 2021 Alternative Assets in Europe Report, which has been produced with leading European asset manager Amundi for the fourth year in a row.
AUM had grown by 59 per cent over the five years from December 2016 to December 2020, and Europe now accounts for 24 per cent of the global alternative assets industry.
Fundraising, investment, and performance have accelerated in H1 2021. Fundraising by Europe-based private capital GPs in H1 2021 reached 59 per cent of 2020’s full-year total, which, despite the practical challenges caused by travel and meeting restrictions, was the second-highest on record. Investment teams have been busy, with the value of private capital transactions closed in H1 2021 already at 83 per cent of 2020’s full-year total, with venture capital, infrastructure, and private equity the most active sectors.
In a challenging year for markets globally, European-focussed hedge funds finished the year positively in 2020, up 7.04 per cent on average, with the momentum continuing into 2021. After experiencing record outflows of -EUR31.8 billion in Q1 2020 amid the equity market sell-off, hedge funds stabilised, and then attracted capital through the second half, with the EUR32.2 billion net inflows representing a turnaround for an asset class that has experienced consistent outflows over the past five years of bull market conditions. As Europe slowly comes out of its prolonged recession, hedge funds are best positioned to benefit from an expected increase in volatility in the market.
Dominique Carrel-Billiard, Global Head of Real Assets at Amundi, adds: “Real assets will be the winning bet for a post-Covid world. Most notably, a new post-Covid cycle could see a resurgence of inflation and continue to drive capital towards these asset classes which offer protection against inflation and the prospect of higher returns. Real assets can help to meet the economic challenges posed by the Covid recovery and fulfil investor expectations on both performance and impact, notably by helping allocate capital towards the energy transition. As such it is crucial to make real assets accessible to a wider range of savers.”
Like this article? Sign up to our free newsletter Related Topics Surveys & researchNew study reveals that institutional investors and wealth managers are placing a greater focus on altcoins
New research from Nickel Digital Asset Management (Nickel) reveals that institutional investors with exposure to Bitcoin will increasingly invest in altcoins (a cryptocurrency other than bitcoin).
Institutional investors and wealth managers from the US, UK, France, Germany, and the UAE who collectively have USD275.5 billion in assets under management were surveyed, and 32 per cent predict that professional investors with an allocation to Bitcoin will invest in altcoins for the first time over the next 12 months. One in three (33 per cent) believe they will dramatically increase their allocation, and 29 per cent think they will do so slightly.
When asked why they believe professional investors are increasingly focusing on altcoins, 54 per cent said it was because a range of cryptocurrencies have seen their market cap reaching meaningful thresholds and establishing leadership positions. This was followed by 45 per cent who said it is because crypto assets are showing attractive diversification benefits from bitcoin, and 44 per cent who said it is because they believe upside potential of this market warrants a long-term portfolio allocation.
Anatoly Crachilov, co-Founder and CEO of Nickel Digital, comments: “Many DeFi protocols have seen their market cap increasing dramatically over the past year, with valuations rising faster than Bitcoin. These assets are addressing real life use cases and based on greater programmability than Bitcoin, which is reflected in their price dynamics. It is no surprise therefore that forward-looking institutional investors and wealth managers are increasingly paying attention this emerging part of crypto market.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Digital Assets Surveys & researchEisnerAmper hosts virtual 6th Annual Alternative Investment Summit
EisnerAmper’s 6th Annual Alternative Investment Summit will be held virtually on Thursday, 7 October, 2021. This year’s theme is: What’s Around the Bend: The Future of Alternative Investments.
The Summit features top investors and fund managers providing perspectives on current trends, opportunities, and what the future holds for the hedge fund, private equity, venture capital and alternative investment markets. This thought-provoking afternoon features highly interactive panel discussions that will cover issues and insights affecting the alternative investments industry, as well as offers a macro perspective on the economic market outlook, global landscape, current market volatility and more.
This year’s keynote speakers (and “Sharks” on ABC’s Shark Tank) are Barbara Corcoran, Founder of The Corcoran Group, and Daymond John, Founder & CEO, FUBU who will be interviewed by Charles Weinstein, CEO of Eisner Advisory Group LLC. Barbara and Daymond will share the successes and challenges of their respective journeys, what they think comprises a winning investment, tips for investors and more.
EisnerAmper’s exclusive Summit is designed for GPs, CFOs, CIOs, CAOs, controllers, portfolio managers and operations specialists from alternative investment management firms including private equity funds, hedge funds, venture capital funds, family offices, real estate funds, funds of funds, pensions, endowments and foundations, institutional investors, and other financial service executives and key personnel within the alternative investment industry.
“While, hopefully, we’ve put the bumpiest part of the road in the rearview mirror, there’s no roadmap for the twists and turns that lay ahead for the alternatives industry,” says Peter Cogan, EisnerAmper Managing Partner, Financial Services Industry. “As we prepare for a new era, we’ll discuss what we can anticipate and what signs should investors look for along the journey.”
Like this article? Sign up to our free newsletter Author Profile Related Topics EventsMillennium Global launches systematic long/short currency hedge fund
Currency-focused investment manager Millennium Global Investments has launched a new systematic long/short currency hedge fund strategy to tap into burgeoning demand for non-correlated returns in what it calls a “favourable” investment environment.
The Millennium Systematic Currency Alpha Strategy takes long and short positions in nine developed market currencies versus the US dollar, using a proprietary systematic investment model.
Specifically, the investment algorithm is built around forward-looking momentum signals which will determine the probability of range expansion, trend reversals and gap risk as well as currency risk premia analysed using sparse-learning techniques.
The Luxembourg-domiciled fund – which has already raised over USD100 million in pre-launch funding ahead of Wednesday’s roll-out – is offered in a UCITS-compliant format with daily liquidity, aimed at providing a broader universe of investors with access to Millennium Global’s systematic currency alpha strategy.
Commenting on the launch, Mark Astley, co-CEO of Millennium Global, described currency markets as being at the “focal point” of economic, financial and geo-political differentiation.
“Returns generated from currency markets are typically uncorrelated with other asset classes and therefore provide attractive diversification benefits within most investors’ asset allocation frameworks,” Astley said. “Many traditional asset classes are currently highly valued, especially US equity and fixed income markets. Investors are looking elsewhere for attractive returns and this makes it an ideal time to launch the UCITS Fund”.
Established in 1994, London-based Millennium Global – which manages more than USD20 billion is assets in segregated accounts for institutional clients – runs a range of products spanning alpha-focused currency programmes, dynamic and passive currency hedging, and currency management advisory services, including FX execution.
Umberto Alvisi, co-CIO and head of systematic investments at Millennium Global, said: “We are seeing growing demand for our return-seeking and hedging programs from large institutions. We think that the current environment is favourable for our strategy and are pleased to be able to make it available to a wider audience.”
Like this article? Sign up to our free newsletter Author Profile Hugh Leask Employee title Editor, Hedgeweek Twitter Linkedin Related Topics Funds Launches & Fundraising Long-short investingHazeltree partners with IHS Markit to deliver treasury and portfolio finance solutions
Hazeltree, a provider of integrated treasury management and portfolio finance solutions to alternative investment managers, and IHS Markit, a specialist in critical information, analytics and solutions, have formed a strategic alliance to offer clients an integrated treasury and portfolio finance solution powered by IHS Markit’s Securities Finance dataset.
The integrated solutions enable clients to trade and operate more directly, transparently and efficiently and to obtain a composite overview of their entire positions, margin and risk profile.
Hazeltree’s products help over 200 leading hedge fund managers globally to transform how they manage counterparties to increase returns by 40-80 basis points, optimise fees, minimise exposure, and protect assets. Hazeltree’s market-leading position is best evidenced by the fact that eight of the world’s top 20 hedge funds are powered by Hazeltree’s treasury products.
IHS Markit’s Securities Finance data helps hedge fund managers gain a competitive advantage, providing an end-to-end alternative data value chain which includes a vast array of datasets, tools and techniques for analysing stock loan data and access to experts to explain the data’s contents. IHS Markit’s Securities Finance dataset delivers market leading analytics on short seller demand, supply and borrow costs. IHS Markit offer clients a holistic transparency into short interest dynamics, supporting investment decisions, asset allocation and risk management.
“Our mission is to not only provide the broadest, deepest and most accurate data and analytics but to also assist our clients across all segments address and solve other challenges they face when navigating the stock loan market," says Paul Wilson, Managing Director and global Head of Securities Finance at IHS Markit. “Bringing together Hazeltree’s expertise and IHS Markit’s data to produce an integrated solution fits completely with this objective and is exactly what our clients need.”
“Given the significant overlap of the IHS Markit and Hazeltree customer base, it makes great sense to provide our mutual clients with this valuable capability,” says Sameer Shalaby, President and CEO, Hazeltree. “We are excited to work with IHS Markit to support alternative investment managers with our industry-leading combined solution.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Services Trading & ExecutionNorthern Trust automates data extraction from alternative asset documentation
As part of its initiative to digitalise alternative asset servicing, Northern Trust has launched an artificial intelligence-powered solution to extract unstructured investment data from alternative asset documents and make it accessible and actionable for asset owner clients.
Built in collaboration with Microsoft Azure Applied AI Services, which accelerate time to value for enterprises building AI solutions, and business and consulting firm Neudesic, the proprietary solution transforms crucial information such as capital call notices, cash and stock distribution notices, and capital account statements from a variety of unstructured formats into digital, actionable insights for investment teams.
“The integration of unstructured data on alternative assets will fill a crucial missing piece for asset owners who have long sought an accurate view of performance, liquidity and risk analytics across multi-asset portfolios,” says Pete Cherecwich, president of Corporate and Institutional Services at Northern Trust. “Automating investment data is a focus for Northern Trust, particularly for alternative assets due to their complexity and growing investor demand. Our investments in cloud technology, artificial intelligence, blockchain and machine learning will help asset owners achieve a true understanding of their assets and portfolios as a whole.”
Data extraction and integration is the second stage of a digitalisation process that will help asset owners access more current, robust information regarding their alternative assets - highly manual investments which traditionally only report on a monthly or quarterly basis. Northern Trust previously announced a custom-built robotic process automation solution to capture, categorise and store alternative asset documents on a cloud-based drive.
The new AI-powered data extraction capabilities will read stored documents and fund manager reports on holdings and performance of hedge funds, private equity and other alternative assets and pull out data points including asset names, currencies and market value. The two functions – document capture and data extraction – create an end-to-end, scalable, cloud-based process capable of moving from document receipt notification to digitised counting-ready data in just minutes.
“AI and natural language processing offers a profound impact on business processes across industries, and this use case is a stellar example of their potential for alternative asset administration,” says Bharat Sandhu, senior director, Azure AI and Machine Learning at Microsoft. “We’re proud to collaborate with Northern Trust to make these emerging technologies more accessible and put their benefits into the hands of institutional investors seeking greater efficiency and clearer insight into their investments.”