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'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 UKJTC acquires boutique asset manager based in Ireland
JTC has acquired Ballybunion Capital Limited (Ballybunion), a boutique asset manager based in Ireland. The initial consideration will be settled in cash and JTC equity. A further deferred consideration is available on the achievement of performance targets in the current year.
Founded in 2009, the Ballybunion provides management and regulatory oversight services to investment funds and offers ManCo services as an Alternative Investment Fund Manager (AIFM) as well as portfolio management and risk management solutions.
Ballybunion has a strong reputation and its solutions based service offering has focused on the premium end of the market, covering both alternative and traditional asset classes, including private equity, loans, real estate, fixed income, ESG and life settlements. Ballybunion has been regulated by the Central Bank of Ireland (CBI) since 2009 and received its AIFM ManCo authorisation in 2014.
Ballybunion is being acquired from its founder, Patrick O’Sullivan, who will remain with JTC in a leadership role focused on the development of its Irish funds business internationally, especially in North America. All Ballybunion’s management and other staff will join JTC, becoming part of the Institutional Client Services (ICS) Division, led by Jon Jennings. The transaction is subject to change of control and final regulatory approvals and is expected to complete by year end.
Ballybunion will substantially enhance JTC’s fund services presence in Ireland, providing ManCo and governance services for Irish domiciled funds, giving access to new clients and providing a platform from which to drive future growth in the strategically important Irish funds services market.
Earlier in 2021 JTC acquired INDOS Financial, a leading specialist provider of Depositary and other fund oversight services to the alternative funds industry. INDOS has a significant and complementary Irish presence
The funds market in Ireland has experienced strong growth over recent years with Irish domiciled funds amounting to c. USD3.3tn as of the end of 2020. The number of funds domiciled in Ireland is over double that of the UK and the gap is growing.
Continued growth in the Irish funds market is supported by a number of factors, including over 40 per cent of the world’s hedge funds being serviced from Ireland, the English speaking business environment, close cultural alignment with North America, robust legal, tax and regulatory frameworks and a thriving funds services community that includes legal, accounting and tax expertise. In addition, Brexit has made Ireland an increasingly attractive centre for fund domiciliation, as it benefits from access to an EU passport for investment funds, which facilitates the marketing of Irish funds throughout the 27 EU member states.
In the financial year ending 30 June 2020, Ballybunion delivered revenue of EUR1.8 million a 26 per cent increase from the previous year. The business will be accretive to earnings and achieves profits in line with JTC’s medium term guidance of 33 per cent to 38 per cent underlying EBITDA margin and benefits from an attractive cash generation profile. Growth in the business is expected to continue and will be supported by leveraging JTC’s scale, as well as combining Ballybunion’s suite of fund services with those of INDOS Financial.
Nigel Le Quesne, CEO of JTC, says: “Following our successful fund raise earlier this year, we are delighted to announce the acquisition of Ballybunion, which is a sophisticated and high quality ManCo in the strategically important Irish fund services market. The business has excellent alignment with our existing fund services business in Europe, as well as our expanding US practice. We welcome Patrick, his team and all Ballybunion clients and partners to the Group.”
Patrick O’Sullivan, founder and Managing Director of Ballybunion, says: “Having founded the business in 2009 and developed a successful solution driven AIFM business focused on long life cycle assets, now is the right time to find a partner with a global reach that will take us to the next level and ensure we continue to grow our Irish funds business and deliver a bespoke services in an ever more complex regulatory environment for investment funds. In JTC we have found a combination of strong cultural alignment and an incredibly well built global funds platform that will allow us to significantly accelerate our growth, as well as adding more value for our existing clients.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Deals & Transactions Acquisitions Finance & InsuranceTurquoise Plato connects to OpenFin
LSEG’s (London Stock Exchange Group) Turquoise Plato is connecting to OpenFin in response to the industry need for workflow efficiencies, application interoperability, and a more unified desktop experience for the buy-side and member firm users.
Turquoise has a proven track record in delivering innovation and liquidity opportunities to the market, with Turquoise Plato Block Discovery having seen record levels of block trading activity on Turquoise and Turquoise Europe in 2020. With this collaboration, Turquoise is continuing to deliver on its mission to identify efficient, collaborative operating models that reduce the implicit cost of trading, contribute to long-term investment returns and drive sustainable growth.
Turquoise on OpenFin delivers an insightful data feed directly into trader workflows to support liquidity discovery and decision making processes leveraging OpenFin’s open architecture. The API passes FDC3 compliant Context objects, and makes use of OpenFin’s message bus to pass that data to OpenFin-enabled applications including visualisation tools, in-house and 3rd party applications.
Dr Robert Barnes, Group Head of Securities Trading & CEO of Turquoise Global Holdings, LSEG, says: “As a market operator, Turquoise is well positioned to bring the industry together around a common ambition: to collaborate, innovate and to improve efficiencies on traders’ desktops. This will not only support best execution efforts but also improve performance for end investors as it helps us reduce the slippage cost at the point of execution. We are delighted Turquoise® and Turquoise Europe™ are the first trading venues to connect to OpenFin and offer this new functionality to the buy-side.”
Adam Toms, European CEO of OpenFin, says: “We are witnessing a continued shift towards more collaborative mindsets and platforms. With forward thinking firms such as Turquoise working with the industry to create solutions that make the financial desktop more intuitive, automated and powerful, firms can unlock the true potential of interoperability and contextual workflows on their financial desktop. Operational complexity and costs arising from bilateral integrations are fast becoming a thing of the past as users can now access the right tools and data sets, surfaced directly into their workflows, delivering powerful capabilities and tangible results.
“Collaboration and innovation are central to our mission to simplify app distribution, unify the digital workspace and enable seamless communication and workflows between applications. We are very excited to be working with Turquoise to bring new, visionary models of collaboration to life and to market.”
OpenFin provides a common web-based OS layer across the financial services industry to power next-generation applications and desktop experiences. OpenFin technology is deployed on 300,000 desktops across the industry, powering over 3,500 applications in more than 2,400 buy-side and sell-side firms in 60-plus countries.
FlexTrade Systems will be the first to deliver the Turquoise data feed into their flagship EMS via the OpenFin message bus. Traders can then act on that data, automate processes and take advantage of emerging liquidity opportunities. Built-in visualisation capabilities ensure the block trading activity from Turquoise Plato Order Books is easy to digest and subsequently interact with.
Andy Mahoney, managing director EMEA at FlexTrade Systems, adds: “We are delighted to work with Turquoise and OpenFin to support liquidity discovery and execution opportunities, and bring tangible benefits to the buy-side trading desk. It helps our clients customise their execution workflows, perform optimally on every trade and achieve best execution without compromise.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Trading & ExecutionOptionMetrics announces IvyDB Borrow Rate to assess short-selling opportunities and risks
OptionMetrics, an options database and analytics provider for institutional investors and academic researchers worldwide, has launched IvyDB Borrow Rate offering insights on the options-implied costs of short-selling individual securities computed intraday across maturities.
The new dataset gives institutional investors and academia valuable information to pinpoint short-selling pressure, analyse dynamic borrowing conditions, and improve research on short-selling positions.
Announcement of this new product comes as interest in short-selling (or borrowing shares of a stock to sell with hopes to buy it back cheaper) continues to grow, with GameStop and other meme stocks hitting trading highs earlier this year as just one example. Understanding dynamic borrowing costs is essential to analysing the risks involved with short-selling opportunities.
OptionMetrics’ new dataset includes borrow rates for every equity and ETF in the OPRA universe from January 2016 onward. Short rates are constructed for each maturity with arbitrage conditions across put-call pairs. Proprietary smoothing reduces noise from early exercise features and bid/ask spreads.
“At OptionMetrics, we have always been focused on giving institutional investors, traders, and academia the data they need to make the most informed decisions. With IvyDB Borrow Rate, we continue this tradition in providing the cleanest, most reliable data, which is straightforward and easy to interpret to assess risk,” says OptionMetrics CEO David Hait, PhD.
With over 20 years as the premier provider of historical options and implied volatility data, OptionMetrics also offers comprehensive options data for the US, Europe, Asia-Pacific, and Canada, as well as settlement price data for the most liquid US futures.
Like this article? Sign up to our free newsletter Author Profile Related Topics Investments Long-short investing Trading & ExecutionAlbaCore Capital Group makes three senior hires
European credit specialist AlbaCore Capital Group (AlbaCore) has made three senior hires to reinforce its Operations, Business Development and Investor Relations teams.
As part of the growth of the AlbaCore platform, investing across the European credit spectrum with USD8.5bn AUM, AlbaCore has bolstered its senior executive group. Jenny Fung is appointed as Managing Director of Investor Relations in New York to further expand global investor relationships and our commitment to the region. Tara Mulholland joins as Head of Business Transformation and Micaela Kelley as Deputy Chief Operating Officer to support Matthew Courey, Chief Operating Officer and Founding Partner.
Fung brings a wealth of financial services experience with 25 years in the industry. She joins from Taconic Capital, a global investment firm, where she was Director of Marketing and Investor Relations for 13 years, and prior to that at Bank of America, AIG and CSFB.
Mulholland will oversee an operational change programme across the firm, joining with 19 years’ experience from Cheyne Capital where she was a Partner and served as Head of Business Transformation, Chief Administrative Officer and Head of Operations.
Kelley joins with over 11 years of experience as a Chief Operating Officer with alternative funds. She joins from JNE Partners where she served as Partner and Chief Operating Officer following the spin-out from MSD Partners, and previously as Partner and Chief Operating Officer of Observatory Capital Management. Micaela has 17 years prior experience in prime brokerage and credit risk management at Goldman Sachs and Morgan Stanley.
Matthew Courey, Founding Partner and Chief Operating Officer at AlbaCore Capital Group, says: “We are excited to have Jenny, Tara and Micaela join the AlbaCore team. Their unique backgrounds and depth of experience will continue to drive our business and position our team optimally for the many opportunities ahead.”
David Allen, Managing Partner and Chief Investment Officer at AlbaCore Capital Group, adds: “I am delighted that such high calibre executives have chosen to join the firm. We are proud of the talented team we have built at AlbaCore with 20 nationalities and a diverse set of backgrounds and experiences. Tara, Micaela and Jenny will further strengthen our ability to deliver for our investors across the credit spectrum”.
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsDigital assets funds see inflows of USD42m
Digital asset investment products saw inflows totalling USD42 million last week, according to the latest Digital Asset Fund Flows weekly report from CoinShares.
Inflows were seen across all digital assets and signals what we believe to be continued improving sentiment amongst investors.
Bitcoin saw inflows of USD15 million, having suffered the most from negative investor sentiment recently with inflows in only three of the last 16 weeks.
Solana, despite recovering from a network outage caused by a DDoS attack, saw inflows of USD4.8 million. This suggests investors were happy to shrug-off the attack, seeing it as teething problems rather than something more inherently problematic with the network.
Like this article? Sign up to our free newsletter Author Profile Related Topics Digital AssetsMATIC and ETH added to Umbria Network’s Narni cross-chain bridge
Umbria’s ultra-low-cost liquidity bridge now supports ETH and MATIC in addition to USDT and UMBR.
Using Narni, the native tokens for the Ethereum and Polygon networks can be transferred exceptionally quickly and cheaply cross-chain. ETH, which was launched first, can be bridged from the Ethereum to Polygon Network for as little as USD2.56 in gas, which is significantly less than other bridges. This has caused the Narni Bridge to be adopted rapidly by many DeFi participants and has especially caught the attention of the Zed Run community, who had previously been hampered by prohibitively expensive gas fees.
Another considerable advantage of the Narni Bridge is the APY it pays liquidity providers. Its ‘Pool and Earn’ function enables users to lend their MATIC and ETH (and other assets) to the bridge and earn APY when other participants bridge that specific token between networks. Anyone currently providing ETH to the Polygon pool has received up to an astounding 70 per cent APY with no impermanent loss.
“We’re seeing great momentum now with the Narni bridge and a very pleasing increase in Total Value Locked (TVL). Lots of people are bridging, which in turn attracts more liquidity providers who are enticed by the interest they can earn on the asset they supply,” says Oscar Chambers, Co-lead developer of Umbria. “More chains and assets are coming online imminently; we’d love to hear from the DeFi community about what they’d like to see next on the Narni Bridge.”
CME Group launches first-ever sustainable derivatives clearing service
CME Group has launched what it says is the derivatives industry’s first-ever Sustainable Clearing service to help market participants track and report on how their hedging activities are advancing their sustainability goals.
The service will be available from 27 September, 2021.
Sustainable derivatives encompass both the trading of products such as carbon offsets, battery metals and bioenergy as well as interest rate and foreign exchange futures hedging activity that is carried out to support a sustainable business.
“Sustainability continues to be an increasing priority for our global clients as they significantly expand both the risk management that they provide to green businesses and environmental projects,” says Julie Winkler, Chief Commercial Officer, CME Group. “This new framework for clearing sustainable derivatives will make it easier for our clients to measure the impact of their support for sustainable activities and can be part of the solution to encourage further growth in this key sector as the economy transitions to net-zero emissions.”
“This innovative clearing offering makes it simple for firms to track their sustainable derivatives positions by seamlessly integrating reporting into their existing workflows,” says Sunil Cutinho, President, CME Clearing. “Our solution ensures that all sustainable trades continue to benefit from our established risk management approach, including full margin offsets where applicable, which creates efficiencies for clients and end users.”
“As the bank for a changing world, we consider it our duty to assist our clients in reaching their sustainable related goals through the Sustainable Clearing service,” says Raphael Masgnaux, Global Head of Prime Solutions and Financing and G10 Rates, BNP Paribas.
“As a firm believer in how finance can catalyse a positive impact on our environment, Standard Chartered is delighted to have contributed to CME’s Sustainable Clearing solution and support the sustainable agenda of market participants,” says Mick Hill, Global Product Owner, Exchange Traded Derivatives, Standard Chartered Bank.
All participating futures commission merchants will be provided with Sustainable Clearing eligibility criteria to identify and tag their sustainable trades. The eligibility criteria will be aligned to external standards, such as the International Capital Markets Association (ICMA) Social & Green Bond Principles. CME Group will be ‘criteria neutral’ to ensure that only independent third-party standards are applied.
The criteria and governance of Sustainable Clearing will be administered by CME Benchmark Administration Limited, an independent legal entity within CME Group, that manages and operates the company’s benchmarks and indices. A robust governance framework and an inclusive criteria committee based on ICMA principles will ensure that Sustainable Clearing operates with integrity and transparency, staying close to relevant standards in the industry as they evolve and mature.
Soaring natural gas prices boost trend-following hedge fund Drury Capital
The recent surge in natural gas prices is helping to generate eye-catching returns for Drury Capital, the long-running US trend-following hedge fund firm led by former grain trader Bernard Drury.
The firm’s flagship strategy, the Diversified Trend-Following Program, has advanced 30 per cent in 2021, powered both by the recent rebound in commodity prices as well as rising interest rates earlier in the year.
The fund’s investment portfolio is split evenly between financials and commodities in a number of long and short duration instruments. The strategy has made gains in equities indices, as well as long bets in aluminium, natural gas, grains, copper, and selected fixed income trades.
Historic price moves in coffee amid production concerns in Vietnam, which has been hit by Covid-related labour shortages, have also added to performance.
At the same time, Drury’s Multi-Strategy Futures Program, which launched last year, is also up 15.5 per cent year-to-date.
By comparison, the Société Générale Trend-Following Index is up 9.23 per cent over the same period, while another key industry benchmark, the SocGen CTA Index has added 6.5 per cent.
Bernard Drury, founder and CEO of Drury Capital, said every sector traded has proved profitable for the firm this year.
“The early year profits came from trades in rising interest rates, such as bonds and FX, and upward moves in the copper, aluminium and grain markets that were largely pandemic-recovery trades,” he observed, noting the recent “noteworthy” moves in natural gas have helped sustain performance in recent weeks.
“We aim to identify directional opportunities while being disciplined about preserving capital. As well, at times we may provide exposures that investors might otherwise not have.”
Since launching in May 1997, Drury Capital’s Diversified Trend Following Program has generated an annualised rate of return of 9.79 per cent.
“The biggest advantage is the flexibility built into our strategy,” said Bill Miller, Drury’s global head of sales and marketing. “The diversification and detailed analysis by the programme has delivered a strong investment strategy for our investors. The CTA space is now one of the strongest and most compelling narratives available to investors.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Funds Investments Investing in Hedge FundsDallas-based investment advisor sees increasing HNW interest in credit strategies
High-net-worth clients from in and around the Southern United States are continuing to favour allocations to an array of niche credit strategies, according to a Dallas-based investment advisor.
Ken Shoji, Managing Director and Chief Investment Officer at View Capital Advisors, told Hedgeweek: “In credit, we allocate across the board.” Adding: “We’ve been very selective in looking at niche credit strategies, areas like US non-agency mortgages, US bank trust preferred, high-yield bonds, bank loans, emerging market debt, structured credit – niche parts of the US credit markets.”
View Capital advises on USD1.4 billion for a small group of multi-generational families who are mainly based in Texas and the surrounding Southern United States, such as Louisiana. An estimated quarter of the firm’s clients are based internationally, predominantly in Mexico, and their average client’s portfolio is USD10 million.
Shoji explained that despite the uptick of interest in credit, View Capital takes a cautious approach in reviewing new funds in the space, owing to expenses and elevated valuations, but also describes these strategies as often “less trafficked and less vulnerable to institutional capital coming in to compress returns.”
Elsewhere in the hedge fund space, View Capital has also recently started to consider recommending long-short equity strategies, after a period of skepticism due to the difficulty of finding successful managers.
Shoji stated that current hedge fund allocations are mainly invested in multi-strategy and multi-manager companies, such as Millennium Management, Point72 Asset Management, Balyasny International Asset Management and Elliott Management Corporation, which generate consistent returns with very little outright market risk.
Shoji explained that View Capital creates unique opportunities for its clients through a specialised research team which investigates less obvious areas of investment which have better return risk profiles.
In the past, the firm has recommended investments in operating assets including: aircraft leasing, rail cars, shipping, cell towers, industrial cold storage, as well as litigation finance, music royalties, film finance, life settlements and catastrophe reinsurance.
The firm’s wealthiest clients use the endowment model and focus on private investments or alternatives. Shoji commented: “It could be as much as 40 or 50 per cent allocated to alternatives, including hedge funds, private equity, private real estate, and private credit.”
Shoji stated that his clients’ current main concerns are skewed valuations and overpaying for assets. He remembered how, during the Covid-19 pandemic, View Capital “held their clients’ hands” throughout this stressful financial period, and took advantage of opportunities which came up, while simultaneously protecting its clients’ capital.
Like this article? Sign up to our free newsletter Author Profile fiona.mcnally Employee title Reporter Linkedin Related Topics Investments Family offices North America Investing in Hedge FundsSyz Capital white labelling partnership reaches new milestone
Launched in October 2019, the tailored product managed by alternatives provider SYZ Capital, in partnership with Banca March has reached the symbolic milestone of EUR200 million of assets under management – effectively doubling in a year.
The fund has also made, since its October 2019 inception, an annualised return of 5.4 per cent while enjoying an exceptional 1.3 Sharpe ratio, leading its peer group.
Managed by a team led by veteran fund manager Cédric Vuignier, head of liquid alternative managed funds, OYSTER BM Alternativos invests in select equity hedge, event driven, macro and relative value strategies with the aim of providing resilience to market sell-offs.
“We’ve been particularly strong on a risk-adjusted basis thanks to our actively managed approach. The liquidity terms of the alternative UCITS vehicles have allowed us to be dynamic in difficult environments,” explains Vuignier.
Such rapid growth is the result of an excellent work dynamic between the partner institutions, clear client communication by the front office, as well as the privileged access Syz Capital has historically enjoyed with some of the best fund managers in this space.
Juan Antonio Roche González, member of the Banca March executive, says: “Alternative investments are the quintessence of the active management in which Banca March deeply believes. This vision came together in 2019 when we agreed to launch a formula with Banque Syz to create a key offering for client portfolios – one that bonds are no longer able to satisfy. This natural partnership, between two family-owned specialists, had the best possible test navigating through the Covid months, when transparency and market insight were essential. The outcome could not be better: bold performance and outstanding AuM. We look forward to the opportunities to come.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Results & performance FundsApex Group launches Carbon Footprint Assessment & Reporting service
Apex Group Ltd (Apex), a global financial services provider, has launched a Carbon Footprint Assessment & Reporting service to meet growing market demand.
The new offering helps funds and companies to measure the sources of emissions, implement plans to reduce their carbon footprint and provide a mechanism to offset any residual emissions.
The launch coincides with new global research by Apex which found that 91 per cent of private equity leaders believe that Climate Change is an urgent issue, and 81 per cent agree that they and their portfolio companies should take greater responsibility for their carbon footprint.
Despite that, the survey revealed that at present just half of Private Equity firms measure the carbon footprint of their investments or offset their carbon emissions.
Carbon neutrality is seen as an achievable goal by those that took part, with 55 per cent saying that they have plans underway, with a further 45 percent holding aspirations to achieve carbon neutrality but don’t yet have plans underway.
Nearly three quarters agree or strongly agree (74 per cent) that a carbon reduction plan would advantage their key stakeholders, such as employees, institutional investors and clients.
In response to this clear market need, Apex has launched a Carbon Footprint Assessment and Reporting service. This unique offering quantifies and reports on a company’s Scope 1, 2 and 3 emissions by collecting all relevant data on a secure ESG online software platform to simplify the reporting requirements and seamlessly calculate a carbon footprint. Reports can be used to identify and manage major sources of emissions, whilst aligning with the reporting requirements of key standards and regulations.
The platform uses over 1 million individual emission factors from the latest data sources and follows industry best practice reporting standards and regulations, such as the TCFD, CDP, GHG Protocol, SFDR, DEFRA, EPA and more, to understand and quantify a company’s carbon footprint and potential commercial risks.
This proprietary platform is also supported by a team of analysts to offer advice, guidance and support throughout the process. A key component of this is the recommendation of verified carbon offsetting project and schemes, so that businesses can offset any residual and unavoidable emissions to achieve carbon neutrality.
Andy Pitts-Tucker, Managing Director, Apex ESG Ratings & Advisory, comments: “Beyond the moral and fiducial argument for reducing carbon emissions, there are now increasing commercial and regulatory pressures creating new risks to the bottom line. All companies must quantify and understand their carbon footprint in order to create and articulate an action plan to reduce their carbon emissions – and this new tool provides our clients with an efficient, accurate and accessible way to achieve this.”
Peter Hughes, CEO and Founder of Apex Group adds: “I feel strongly that climate change is not an issue to be solved by politicians alone, we as private companies and individuals all have a responsibility to take immediate action to understand and reduce our impact on the environment. The pressure on businesses and investors is gathering momentum and will be accelerated by all world leaders meeting at the UN COP26 this November. The time to drive positive and measurable change is now.”
Kneip appoints Chief Operating Officer
Kneip, a specialist in fund data management, has appointed Cyril Molitor as its new Chief Operating Officer (COO).
Molitor brings 20 years’ industry experience, having occupied several senior positions at leading financial services institutions, including HSBC, Credit Suisse and AXA. He was most recently the CEO of Woven, a leading outsourcing provider, where he drove technological innovation and delivered service excellence to its clients. Prior to this, he was the Chief Transformation Officer and Director at Innovation Group Business Services, a leading InsureTech company which he set up in South Africa. Molitor is an experienced and accomplished leader with an impressive background in driving innovation and running operations in financial services and private equity backed businesses. He graduated from Reims Management School with an MSc in Management.
Based in Kneip’s Luxembourg office, Molitor will be responsible for Operations and Technology. In his capacity he will be driving the company’s operational strategy. He joins Kneip as a member of the Executive Leadership Team, reporting to the CEO, Enrique Sacau.
Molitor, Chief Operating Officer of Kneip, says: “This is a truly exciting time for me to be joining Kneip. Over nearly three decades, Kneip has built a world class reputation for delivering innovative products and solutions for some of the biggest names in the fund industry. I am thrilled to be joining an ambitious executive team, and I look forward to delivering outstanding client experience and building the structures that will support the next stage of Kneip’s expansion.”
Kneip’s CEO, Enrique Sacau says: “Cyril’s appointment reflects our commitment to innovate and deliver exceptional service for our clients. We are thrilled that he is joining our team at an important time in our company’s development as we embark on the next stage of Kneip’s growth. His impressive track record in operations and technology gives Cyril the perfect experience to drive innovation and deliver high value to our business and to our clients.”
With Molitor’s arrival, Kneip’s current COO, Mario Mantrisi, who had stepped in the role a year ago, becomes responsible for market development with an emphasis to grow Kneip in new markets. As the newly appointed Strategy Director, Mantrisi retains his role as a member of Kneip’s Executive Leadership Team.
Kneip’s CEO, Enrique Sacau, says: “Mario took over Client Services last year and leaves Cyril a transformed operation. Thanks to his exceptional knowledge of our product, our clients, and our regulatory environment he will now have the opportunity again to grow Kneip.”
Like this article? Sign up to our free newsletter Author Profile Related Topics Moves & AppointmentsMontréal Exchange extends trading hours to Asia Pacific time zones
Montréal Exchange (MX), Canada’s derivatives exchange, has launched the next phase of its extended trading hours initiative, offering investors in the Asia Pacific region the opportunity to manage their exposure to Canadian markets and execute cross-market strategies in their local time, almost 24 hours a day.
"We are extremely excited to launch this new phase of MX's globalisation strategy, as we continue to push the evolution of our markets and address the increasing global demand for Canadian derivatives," says Luc Fortin, President and Chief Executive Officer of MX and Global Head of Trading, TMX Group. “In keeping with the trend of global capital flows, pension funds in Asia have significantly increased their international exposure and we are encouraged by the strong engagement we have seen from investors and participants in the region to date. Canada offers a compelling value proposition for investors and around the world: access to highly-liquid, world-class markets and a leading global economy. As we move forward, extended trading hours better aligns MX with our global peers, increases international visibility and connects us to more clients.”
Following the successful launch of MX’s extended hours initiative in 2018 with trading on London time, international investors now have increased access to Canada’s markets. The availability of MX’s products during Asia's business hours will enable investors and risk managers to trade Canada’s benchmark products on a relative value basis against additional markets, including Australia and Japan. The extended trading hours initiative is also intended to accelerate MX’s global expansion plans, by diversifying its client base and developing new centres of liquidity.
Like this article? Sign up to our free newsletter Author Profile Related Topics Markets Trading & ExecutionC8 Technologies launches China gateway vehicle for institutional investors
C8, a fintech platform that offers investors the ability to use direct indexing across all liquid asset classes and investment styles, has launched a China Futures Access vehicle for offshore investors.
The strategy, used by C8’s Chinese onshore clients since 2018, provides institutional investors access to some of the world’s fastest developing futures markets via up to 50 commodity contracts.
The pace of innovation in China’s futures markets is accelerating, particularly in the commodity complex. Recent developments include the launch of the Guangzhou Futures Exchange in April 2021, China’s fifth futures exchange, focused on environmental products including carbon futures which are seen as a critical component of meeting net zero commitments.
Similarly, China is committed to further opening its capital markets to overseas investors. The extension of the QFII programme to allow the inclusion of futures is a good illustration, as is the introduction of the country’s first Futures Law which provides a comprehensive legal and regulatory framework governing the operation of the futures markets in mainland China.
C8 is committed to being at the forefront of these many developments, offering institutional investors early access to the opportunities they present. The China Futures Access programme is diversified by market, investment style, risk profile and trade frequency. It is designed to remove uncertainty from the portfolio of forecasts by cross-fertilising ideas from disparate fields, such as:
Statistical signal processing
Machine learning, pattern recognition and data mining
Exploratory data analysis
Robust optimisation
Macro- and micro-economics
Technology and software engineering
The programme is directional with positions are dimensioned in proportion to the expected return in any given asset
Positions are dimensioned inversely to prevailing levels of volatility
Mattias Eriksson, Co-founder and CEO of C8 Technologies, says: “The recent Draft Futures Law, which sets out trading and settlement principles that are consistent with international markets, is a vital step in the development and growth of these markets which are evolving quickly. As the world’s largest consumer of many major commodities, China is incentivised to improve its attraction and influence as a key trading centre.
“Professional investors have long faced barriers to entry but, as the many signals of market development indicate, this is changing. That is why we are committed to offering our clients innovative products that allow them to gain early exposure to this opportunity set. Our China Futures Access index acts as a gateway through which investors access this exciting market in a risk-adjusted manner.”
Alderwood Capital appoints new Partner
Alderwood Capital (Alderwood), a London-based fund manager, has appointed Cathy Jones as a Partner and a member of its Investment Committee.
A senior human capital executive, Jones focuses on all aspects of high value performance management in the asset management sector, with a particular emphasis on succession planning, understanding how investment teams interact and make successful decisions, and sustaining thriving cultures. Alderwood’s investment process places a heavy reliance on understanding the leadership and investment ‘DNA’ of its target businesses and Jones will lead this effort.
Jones was previously a Partner at Northill Capital where she worked alongside existing Alderwood Partners Jon Little, Rick Potter, Jeremy Bassil and Ryan Sinnott as they built the business from start up to over USD91 billion of assets under management. Prior to this, she was at BNY Mellon for almost a decade where she served as Human Resources Director for the Asset Servicing division in EMEA, managing a 60-strong team looking after over 5,000 employees. Cathy has also held a number of non-executive board roles in recent years, including at Securis Investments Partners, Vantage Infrastructure Holdings and Strategic Investment Management.
Jon Little, Managing Partner of Alderwood Capital, says: “Cathy has a unique understanding of the boutique asset management sector and what makes the people within it ‘tick’. Her knowledge and experience is a key ingredient of our intensive investment process and we’re all delighted to be working with her again. Cathy’s skills and deep experience will be invaluable to the business as we continue to grow and build out our investment portfolio of focused, active managers.”
Jones' appointment is the latest senior hire to join the experienced team at the rapidly expanding Alderwood Capital, which seeks to provide patient capital to specialist boutique active managers through investment in GP (General Partner) stakes. The senior team boasts a 20 year track record of investing across almost every major asset class in the asset management industry in 14 countries around the globe.
The appointment is effective 6 September and Cathy will be based in Alderwood’s London office in Covent Garden.
