April 2017
Hedgeweek Global Awards 2017 CONTENTS
In this issue…
03 Hedgeweek Global Awards 25 Invast Global 2017 results Best Specialist Market Prime Broker 04 Not just surviving… 27 HedgeMark thriving Best Managed Accounts Platform By James Williams 28 Hathersage Capital 07 Quadra Capital Partners Management Best Long/Short Equity Strategy Hedge Fund Best Foreign Exchange Hedge Fund & Best UCITS Liquid Alternatives Fund 30 DMS Governance 09 Sadis & Goldberg LLP Monique Melis, Managing Director, Best Offshore Regulatory Advisory Firm Best Global Law Firm Global Head of Regulatory Consulting 32 Cowen Prime Services at Duff & Phelps, sponsor of the 10 FIS LLC Awards lunch, addresses the audience at the Hedgeweek Global Best Managed Account Platform Best Global Prime Broker Awards ceremony 2017 Technology Firm 33 ACA Aponix 11 EisnerAmper LLP Best Global Cyber-Security Services Best Global Accounting Firm Provider 12 Nedelma Inc 35 Wavelength Capital Best Fund Accounting and Reporting Management Systems Firm Best ’40 Act Liquid Alternatives Fund 13 Pillar Capital Management 36 CitySavvy Best Insurance-Linked Strategies Best Global Public Relations Firm Hedge Fund 37 Harneys 15 Blue Diamond Asset Best Offshore Law Firm Management 38 One Ten Associates AWARDS 2017 Best Statistical Arbitrage Hedge Fund Best Fund Management Recruitment Firm 17 Iron Cove Partners 40 Eze Castle Integration Best Global Insurance Provider Best Global Cloud Services Provider 18 Tages Capital 42 SS&C GlobeOp Best Seeding Platform Best Global Hedge Fund Administrator 19 Quintillion Limited 43 Agecroft Partners Best UCITS Liquid Alternatives Fund Best Global Third Party Marketing Firm Administrator 45 Duff & Phelps 21 ML Capital Best Global Regulatory Advisory Firm Best UCITS Liquid Alternatives Platform 47 Axioma 22 La Française Investment Best Risk Management Software Firm Solutions Best Long/Short Credit Strategy Hedge Fund
Publisher
Managing Editor: James Williams, [email protected]; Managing Editor (Wealth Adviser, etfexpress & AlphaQ): Beverly Chandler, beverly. [email protected]; Online News Editor: Mark Kitchen, [email protected]; Deputy Online News Editor: Emily Perryman, emily.perryman@ globalfundmedia.com; Graphic Design: Siobhan Brownlow, [email protected]; Sales Managers: Simon Broch, [email protected]; Malcolm Dunn, [email protected]; Sales Manager (Private Equity Wire & Property Funds World): Christine Gill, [email protected]; Marketing Administrator: Marion Fullerton, [email protected]; Head of Events: Katie Gopal, [email protected]; Head of Awards Research: Mary Gopalan, [email protected]; Chief Operating Officer: Oliver Bradley, [email protected]; Chairman & Publisher: Sunil Gopalan, [email protected]; Photographs: Chris Mikami, www.mikami.co.uk Published by: GFM Ltd, Floor One, Liberation Station, St Helier, Jersey JE2 3AS, Channel Islands Tel: +44 (0)1534 719780 Website: www.globalfundmedia.com ©Copyright 2017 GFM Ltd. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher. Investment Warning: The information provided in this publication should not form the sole basis of any investment decision. No investment decision should be made in relation to any of the information provided other than on the advice of a professional financial advisor. Past performance is no guarantee of future results. The value and income derived from investments can go down as well as up.
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 2 HEDGEWEEK GLOBAL AWARDS 2017 The winners AWARDS 2017
Best Long/Short Equity Strategy Best Multi Strategy Fund of Best Fund Accounting and Hedge Fund Hedge Funds Reporting Systems Firm/Supplier Quadra Capital Partners Tages Capital LP Nedelma Inc Best Long Bias Strategy Hedge Best Single Strategy Fund of Best Managed Account Platform Fund Hedge Funds Technology Firm/Supplier Valley Forge Capital Skënderbeg Alternative Investments AG FIS Best Value Orientated Strategy Best Systematic CTAs Best Global Trading Venue Hedge Fund Lyxor Asset Management Deutsche Boerse Sturgeon Capital Ltd Best UCITS Liquid Alternatives Best Global Accounting Firm Best Sector Focused Strategy Fund EisnerAmper Hedge Fund Quadra Capital Partners LLP Best Global Shadow Accounting BlackGold Capital Management LP Best UCITS Liquid Alternatives Firm Best Long/Short Credit Strategy Platform Viteos Fund Services Hedge Fund ML Capital Best Global Regulatory Advisory La Française Investment Solutions Best Event Driven Fund Firm Best Fixed Income Credit Strategy Portland Hill Capital LLP Duff & Phelps Hedge Fund Best Absolute Return Fund Best Offshore Regulatory Advisory Danske Capital Libero Development Fund Firm Best Mortgage-Backed Securities Best ’40 Act Liquid Alternatives DMS Governance Strategies Hedge Fund Fund Best Offshore Regulatory Advisory Serenitas Wavelength Capital Management LLC Firm Best Asset-Backed lending Best Global Index Provider Walkers Strategies Hedge Fund MSCI Best Global Cyber-Security BCA Alternative Income Fund LP Best Global Hedge Fund Services Provider Best Specialist Credit Strategy Administrator ACA Aponix Hedge Fund SS&C GlobeOp Best Global Cloud Services Provider INOKS Capital Best Offshore Hedge Fund Eze Castle Integration Best Equity Market Neutral Administrator Best Global Public Relations Firm Hedge Fund Trinity Fund Administration Ltd CitySavvy SPARX Asset Management Best UCITS Liquid Alternatives Best Global Data Visualisation Best Statistical Arbitrage Hedge Fund Administrator Software Provider Fund Quintillion Limited Broadridge Blue Diamond Asset Management AG Best Global Prime Broker Best Global Consultant in Best Convertible Arbitrage Hedge Cowen Prime Services LLC Business Strategy Fund Draycliffe Mohican Financial Management LLC Best Specialist Market Prime Broker Best Global Insurance Provider Best Macro Hedge Fund Invast Global Iron Cove Partners AIP Asset Management Best Global Hedge Fund Research Best Global Law Firm Best Foreign Exchange Hedge Provider Sadis & Goldberg LLP Fund Preqin Hathersage Capital Management LLC Best Offshore Law Firm Best Managed Accounts Platform Harneys Best Commodities Hedge Fund HedgeMark BlackGold Capital Management Best Global Third Party Marketing Best Seeding Platform Firm Best Insurance-Linked Strategies Tages Capital LLP Agecroft Partners Hedge Fund Pillar Capital Management Ltd Best Risk Management Software Best Fund Management Firm/Supplier Recruitment Firm Best Niche Hedge Fund Axioma One Ten Associates Equity Power Fund
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 3 OVERVIEW
Not just surviving… thriving By James Williams
Another year, another fantastic awards the right partner to navigate MiFID II and event. The Reform Club Library, venue of countless other regulatory compliance the 2017 Hedgeweek Global Awards, was demands, has become pivotal to hedge full of optimism and a palpable sense of funds. What has become increasingly excitement at what the year could bring. Of apparent is the need to not only be kept course, there are significant forces of change updated on regulations, but crucially how that hedge funds need to navigate, not least they impact firms. of which is MiFID II, which comes into play “It’s important to help our clients by next January. But as global monetary policy explaining the various nuances in regulation shows signs of divergence, and markets and the way regulation is phrased,” says return to fundamentals, the environment for Julian Korek, Global Head of Compliance and seeking out alpha is improving. Regulatory Consultancy at Duff & Phelps On the regulatory side, working with (sponsor of the Awards lunch). “In the
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 4 OVERVIEW
US, people come from a legal background “For all existing regulations, and whereby they read the regulatory rules and upcoming regulations, we have a process interpret them and they struggle with markets that aims to figure out the requirements like the UK, which is more principals-based and then systematise them. This is then and requires you to provide substance on delivered via a web-based application that what you are doing. helps hedge fund managers collate the “Our global clients appreciate having necessary information and manage the both broad knowledge across the major workflow. We have approximately 600 clients regulatory markets such as those overseen for whom we handle all their regulatory by the FCA, the SEC, etc, but also having processes,” confirms Rahul Kanwar, Head of access to deep, technical expertise as and SS&C GlobeOp. when needed.” Increasing regulatory scrutiny on best Over at SS&C GlobeOp, a division of execution, and conflicted business models SS&C Technologies and one of the world’s will likely benefit Prime-of-Prime providers largest hedge fund administrators, it has built going forward, potentially putting them in a a team of dedicated experts in its regulatory stronger position than single prime brokers. solutions business. One such firm is Sydney-based Invast Global. 14
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 5 “THE AGILITY OF A BOUTIQUE BUILT ON AN INSTITUTIONAL PLATFORM”
Quadra Capital Partners LLP
9-10 Savile Row London, W1S 3PF Tel: + 44 (0)20 3728 4600 Email: [email protected] QUADRA CAPITAL PARTNERS Quadra Capital Partners Best Long/Short Equity Strategy Hedge Fund & Best UCITS Liquid Alternatives Fund
London-based Quadra Capital Partners a fund manager is to deliver value, while at LLP was established in 2013 and became the same time remove market stress for the authorised by the FCA in 2014. An investor,” says Touze. independent investment advisory firm, Being a boutique asset manager, it is Quadra launched with a conviction that it essential that the chemistry is good and that could add real value in the liquid alternatives everyone gets along, says Touze, adding that space, in particular to European institutional the aim is to launch four or five funds and & family offices clients who prefer bring each of them to critical mass: upwards UCITS funds. of EUR1 billion in AUM, respectively. This led Quadra to establishing a SICAV “We are quite agnostic as to what the next UCITS platform in Luxembourg and saw Guillaume Touze, CEO at Quadra strategy might be, provided it fits what we the release of its first fund – Quadra Capital Capital Partners LLP are trying to achieve as an organisation and Global Equity Alpha – in August 2015; a resonates with the market.” UCITS V-compliant global long/short equity Culturally, Quadra Capital takes a multi- fund with a USD2 billion AUM capacity. thematic approach to trading. It is impossible Guillaume Touze is CEO of Quadra to track 10,000 global equities so one has to Capital. Formerly, he was CEO of Barclays take an angle. Asset Managers, overseeing EUR20 billion in “Our angle is to select stocks based AUM in Europe. on three macro themes that we felt were “We built Quadra with a team of partners, uncorrelated to one another. These were each of who had enjoyed success in larger Demographics, Resource Scarcity and organisations,” says Touze. “We were all in Innovation, within which we explore various our forties at the time and hence, an investor sub-themes,” says Touze. came up with the name, Quadra Capital. To qualify, each stock must have at I like the idea that the name of the firm least 30 per cent of their turnover. This originated with a client.” concentrates idea generation in a universe Quadra’s other key executives include of 500 to 600 stocks, within which Moucan Chris Egbunike, COO and Paul-Georges and his team apply bottom-up fundamental Moucan, Partner and Head of Equities. analysis, further reducing the universe to Before joining Quadra, Moucan worked 150 stocks. as Global Head of Equities at Amundi, “We then pick what we believe to be where he first developed the global equity the top 50 stocks, typically 35 long and 15 long/short strategy in 2005, which he short. This is something you can do at the replicates today. boutique level. We have a team of 2 analysts “There are very few global long/short who do this fundamental research and the equity strategies within UCITS that have an fund’s performance is a testimony of our established track record. Last year, the fund capacity to generate value in the strategy,” did well. On a 12-month rolling period, it asserts Touze. generated 13.8 per cent for a volatility of 5.7 On winning two awards this year, Touze per cent (as of March 2017); this is one of remarks: “It was fantastic to obtain such a very few UCITS funds delivering a Sharpe strong peer recognition after one year only ratio above 2. That is the most important and we will do our best to continue to build number, beyond performance. The real job of a successful adventure going forward!” n
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 7 WE PRACTICE LAW
BUT WE LIVE BUSINESS Sadis & Goldberg represents over 800 hedge and private equity funds. Above all else, we value our client relationships. Our attorneys strive to provide excellent, consistent, practical and efficient legal services. We distinguish ourselves from other law firms by assisting our clients in the development of their businesses. This comprehensive approach has often earned us recognition as one of the top five law firms in the U.S. for our hedge fund practice. Invest a few minutes to learn what our attorneys can do for your business.
Best Global Law Firm 2016 - 2017 Best Hedge Fund Best Law Firm of the Year - USA Private Funds Best North American Law Firm USA 2013 - 2016 Law Firm of the Year Law Firm 2016 InterContinental Finance Lawyers World ACQ Law Award Hedgeweek Awards 2011 - 2016 2011 - 2016
Investment Funds’ Financial Services Industry Fund Law Firm of the Year Private Funds Law Law Firm of the Year Law Firm of the Year - USA Corporate LiveWire Firm of the Year Finance Monthly Acquisition International Global Fund – 2016 M&A International 2010 - 2016 2013 - 2017 Global Award 2013 - 2016
Hedge and Private Equity Fund Formation | Transactional Counseling Compliance Services | Regulatory Representation | Litigation | Derivatives Tax, ERISA and Estate Planning | Real Estate
551 Fifth Avenue, 21st Floor ,New York, NY 10176 212.947.3793 | www.sglawyers.com SADIS & GOLDBERG Sadis & Goldberg LLP Best Global Law Firm
Sadis & Goldberg LLP is one of New York’s upon by its clients and other third parties to leading financial services focused law firms. opine on such trends and often participates Known both domestically and internationally in or hosts industry events where the firm, as a dominant force in the financial services its clients and colleagues, and other market sector, Sadis & Goldberg serves clients participants can exchange their collective throughout the world and was recently observations and perspectives. ranked as one of the top five law firms for Sadis & Goldberg takes pride in their hedge fund launches in the 2016 Preqin collegiate team-oriented environment. Global Hedge Fund Report. Client matters are assigned to lawyers of The Financial Services Group is headed appropriate seniority with the necessary up by partner Ron Geffner and comprised Ron Geffner, partner at Sadis partner supervision. of 15 attorneys that have each spent a & Goldberg LLP Unlike many of their competitors, Sadis’ significant amount of their career practicing lawyers are remunerated by performance in the private fund space, providing a rather than billings and collections compelling roster of seasoned legal advisers. alone. This model provides the following Many of the attorneys were trained at advantages to their clients: (i) direct access the world’s largest law firms, firms that to the partners; and (ii) partners delegate specialise in the private fund space and/or the work to the appropriate level to ensure have prior working experience with the US the work is done cost-efficiently. The firm Securities and Exchange Commission. All places significant emphasis on training and of the attorneys in the group embrace the teamwork within their group structure, thus entrepreneurial spirit of the firm. ensuring a consistent quality to their clients. They routinely handle a diverse range Because of the Sadis & Goldberg’s market of enquiries providing legal counsel to leading practice in financial institutions over 900 funds including domestic and and investment funds, the firm refers an international financial institutions, family exceptional number of mandates to other offices, hedge funds, private equity funds, professionals globally. venture capital funds, real estate funds and “We enjoy very strong relationships commodity pools. with leading offshore legal counsel and “At Sadis & Goldberg, we see ourselves other professionals in leading international as businessmen practicing law. We actively centres of onshore and offshore finance, involve ourselves with and often assist such as the Cayman Islands, Bermuda, the our clients in the development of their British Virgin Islands, Luxembourg, Ireland, businesses,” comments Geffner. the United Kingdom, Jersey, Guernsey, The firm’s client base is comprised of all Malta, Mauritius, Cyprus and Hong Kong. sizes, backgrounds and investment sectors. Further, by virtue of representing several This client base represents a significant hundred alternative investment vehicles with percentage of the whole private fund investment managers domiciles throughout industry’s’ market share, providing the firm the world, our market share give us a unique with a usual awareness of current market perspective on the global investment funds behaviours, favoured commercial terms and industry,” states Geffner. other industry trends. This unique access to On winning this year’s global award, current market information allows the firm Geffner comments: “The Hedgeweek Awards to advise their clients with both experience rank amongst the top global awards and legal counsel and timely business we are honoured to be recognised by our intelligence. The firm is regularly called industry in this category.” n
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 9 FIS FIS Best Managed Account Platform Technology Firm
FIS is a global financial services technology Hedge360’s technology but also FIS as a key company, with a focus on technology, partner to deliver that technology.” consulting and outsourcing solutions. The rise of exotic asset classes such FIS serves more than 20,000 clients in as bank loan strategies and direct lending over 130 countries and employs more strategies has become a key growth area than 55,000 people worldwide. It is a for FIS. As Headley notes, Front Arena is Fortune 500 company and is a member of extremely well suited to the trading, valuation Standard & Poor’s 500® Index. Its cloud- and risk measurement of OTC derivatives, based Hedge360 platform provides a full with all of the valuation capabilities built into suite of technology capabilities to support the system from the ground up. managed accounts, from fund administrators Trevor Headley, Head of “We are taking solutions that have through to platform providers and hedge Product Management at FIS deep roots in these asset classes and the fund managers. overarching mandate of Hedge360 is to bring “With respect to the hedge funds, we’ve them into one platform to make them more certainly seen a rising demand from fund deliverable and accessible to hedge fund managers offering managed account managers. It is opening up the market for versions of their strategies,” says Trevor us. With respect to bank loans, we have a Headley, Head of Product Management product set that is plugged in to key data at FIS. “They look to us to provide the providers to support clients and we are technology that helps them a) run the currently closely evaluating the direct lending managed account on the respective platform space to see how our capabilities can be from a portfolio accounting perspective and enhanced,” states Headley. b) allocate and split trades to provide a full, Technology capability and the capacity consolidated view across the portfolio, both to deliver are key features of any leading from a valuation and a risk measurement MAP technology provider. In that regard, FIS perspective.” is one of the largest technology providers Hedge360 integrates two best-of- on the Street. That, says Headley, “gives breed solutions: Front Arena, a real-time, us credibility but also the capability to enterprise-wide platform for portfolio, trading deliver best-in-class technology, consulting and risk management used by some of the expertise, and the ability to operate much largest hedge funds and fund administrators more as a full-service provider. to manage their multi-strategy portfolios. And “Hedge fund businesses become slightly VPM, a real-time, multi-currency accounting more complex as they take on managed and investment management solution. account mandates. We see true value in One of the key strengths of the Hedge360 being able to service, not just the platform platform, says Headley, “is that we recognise providers, but also individual hedge fund clients have a wide variety of requirements clients who are running these managed and different sensitivities to the way account strategies alongside their flagship technology is managed. With some of our funds,” says Headley. large hedge fund clients, who have the scale On winning this year’s award, Headley and internal expertise, we have the option of comments: “We are very happy to be providing an on-premise platform solution to recognised by Hedgeweek’s readers for provide a seamless flow of information”. what we are doing both from a platform “Most clients, however, look to us to technology perspective, and empowering provide a fully managed service whereby end clients. This is an area we are highly they leverage not only the full capability of committed to and value.” n
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 10 EISNERAMPER LLP EisnerAmper LLP Best Global Accounting Firm
With over 1,500 employees in international expertise is not much different to that found locations, over 250 employees and 40 in the middle-market, where the costs are partners dedicated to the financial services more palatable.” practice, EisnerAmper LLP has the breadth To be published later this spring, to handle global engagements and provide EisnerAmper recently conducted a hedge comprehensive guidance and support to its fund survey, garnering 244 responses roster of hedge fund clients. across fund managers with an aggregate EisnerAmper currently services over 1,300 AUM of nearly USD400 billion. In terms of hedge funds and 200 private equity/venture the number one item keeping them awake capital sponsors. Whomever the client, the at night when passing operational due firm always strives to speak their language Frank Napolitani, Director, diligence, 35 per cent of respondents cited and avoid using technical accounting jargon. Financial Services at cyber security. EisnerAmper LLP A “clients first” approach is central to the “We read about cyber attacks on a EisnerAmper philosophy. It is often chosen daily basis but there are so many attacks both as an alternative to “Big 4” firms as well happening that we never hear about. It’s a as a supplementary advisor to funds that use big deal for fund managers today, as well Big 4 firms. According to Frank Napolitani, as investors and service providers,” says Director, Financial Services at EisnerAmper Napolitani. LLP, EisnerAmper provides Big 4 experience To deal with the cyber threats facing and sophistication, “with the rates and the industry, EisnerAmper has a cyber personal attention more characteristic of a security advisory team within the overall smaller firm”. consultancy practice. “Our reputation for delivering proactive, He notes that whilst outsourcing the responsive, high quality service is due, in compliance function remains popular among part, to our commitment to partner level fund managers, particularly those with less involvement. Our partners are more actively than USD250 million in AUM, one of the engaged and spend more time with their biggest areas of growth is the outsourced clients than is the norm among larger firms,” CFO business. he says. “We have proposed on 24 new fund Recently, EisnerAmper has won a number launches already this year, and only two of significant fund launch mandates away of them will launch with a CFO. Spending from the Big 4. Some of these launches USD70,000 on outsourcing the CFO function have received the backing of well known compared to an internal spend of USD400,000 global investors and as Napolitani remarks: on talent and technology, is a huge advantage “When it comes to passing operational due and importantly, it is becoming an accepted diligence and vendor selection by well-known practice among institutional investors here in investors of that calibre, it is very helpful for the US,” states Napolitani. us to win those mandates. On winning this year’s award, he “The CFOs of these particular fund concludes: “We are honoured and proud to launches – the largest being USD250 be recognised by Hedgeweek as the Best million – have worked with middle-market Global Accounting Firm. This speaks to firms in the past and I think they realise the commitment we have to our clients in that, rather than have a higher touch from providing high quality service and expertise an upper middle-market firm, the technical by our dedicate partners and staff”. n
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 11 NEDELMA INC Nedelma Inc Best Fund Accounting and Reporting Systems Firm
Nedelma Inc is a software product solutions • IT departments, helping technology company. Its flagship product, The Portfolio people address business ad-hoc requests Amalfi™ platform, offers multi-asset, multi- much faster. language, multi-currency dynamic reporting Nedelma enjoyed multiple milestones and and data visualisation, as well as analytical made various enhancements to the platform capabilities to the asset management industry. last year. Those milestones, says Medvinsky, Users can analyse and view data from related to Nedelma’s responses to user multiple perspectives using a combination of articulated needs. attributes, formulas and values, with extensive “We implemented functionality that options for dynamic customisation. enhances a user’s ability to monitor regulatory “Our management team has held senior Michael Medvinsky, CEO at and compliance issues, to mitigate reputational positions at Goldman Sachs, UBS, GE Nedelma risk and improve the web and mobile Capital, Mitsubishi UFJ, Deutsche Bank experience for investors. Our automated and we apply our extensive expertise and processes also substantially reduce manual firsthand knowledge to develop and enhance errors by delivering a consistent framework Nedelma’s products,” says Nedelma CEO, and set of repeatable results, which help to Michael Medvinsky. lessen reputational risks.” “We saw a recurring set of needs not In light of increased regulation, the being met by the industry so we developed reporting needs of fund managers have a unique, client-focused set of solutions changed considerably. Managers are that empower users to meet those needs. increasingly expected to deliver a broader, We also recognised the need for native deeper, more transparent set of reporting solutions, which we also offer. Our native responses to all stakeholders, especially solutions work across different environments regulators and investors. and devices: desktop, web, iPad.” Asked how Nedelma has risen to Portfolio Amalfi™ seamlessly aggregates this ever-changing challenge, Medvinsky P&L, risk, exposures, third party and articulates: “We continue to develop and in-house data making it available across add user-relevant features that address these different environments. Anyone using these increasing sets of reporting demands the software, whether it’s the CFO, CIO, placed on managers. Furthermore, our portfolio manager, or operations team, can enhancements to Amalfi help managers in work remotely without having to rely on their capital retention and capital raising others to complete important tasks. efforts – we provide a real competitive To that end, Portfolio Amalfi is designed to advantage.” Portfolio Amalfi enables end- benefit a wide spectrum of users: users to share fund information with • Senior managers (CEO, COO, etc), offering investors in their local language and them a CEO dashboard that provides empowers users to provide multi-currency holistic views across their firms, anytime results. Moreover, Portfolio Amalfi provides and anywhere; track records, the fund’s performance over • Portfolio managers, operations personnel, a user-defined period and other valuable senior managers, research and risk investor-focused information and outputs. analysts, enabling them to make decisions Medvinsky attributes winning a third more effectively and efficiently; consecutive award to having a laser focus • Sales and marketing representatives on user empowerment. “What makes us during the fundraising process, especially different is that we combine our attention when travelling; to users with our delivery of a solution set • Investors, providing them with more that empowers users to see across their transparency; entire company.” n
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 12 PILLAR CAPITAL MANAGEMENT Pillar Capital Management Best Insurance-Linked Strategies Hedge Fund
Pillar Capital Management (‘Pillar’) was The choice of taking risk in different founded in 2008 and is headquartered in geographic locations will depend on Bermuda. The firm manages open-ended favourable pricing compared to the loss Bermuda incorporated funds invested in the expectancy. There are, says Velotti, target global property catastrophe risk market. “peak” zones where pricing is more The senior management team at Pillar, attractive, but Pillar will monitor other headed up by CEO and CIO, Stephen Velotti, zones as well. has an average of 25 years’ experience in “The focus will generally be on higher the insurance linked securities marketplace. expected loss / higher rate-on-line (‘ROL’) Deal access is a critical element of any layers. However, Pillar will evaluate the entire successful ILS manager. In that context, last Stephen Velotti, CEO and CIO efficient frontier. If a potentially better risk/ year Pillar reviewed over 1,600 opportunities at Pillar Capital Management reward can be attained by moving to lower with an 87% declination rate, with Velotti expected loss layers then we will execute explaining that alpha is generated from this,” confirms Velotti. judiciously selecting the best securities on Given the nature of the firm’s strategy, such a high submission count, producing a market risk is best evaluated from the more robust portfolio. perspective of the reinsurance markets “Our core investment strategy is focused versus financial markets. on building a diversified portfolio comprised Rather than target returns, Pillar’s strategy of a majority of Traditional Reinsurance is to develop a portfolio that considers the trades (at least 70%) with a lower reliance risk/ reward of the portfolio and, in particular, on Cat Bonds, Retro and Industry Loss the tail of the portfolio’s distribution. Warrantees,” explains Velotti. “The high “We believe the portfolio should be percentage of risk committed through the developed using the Omega Score. The use of traditional reinsurance contracts Omega Score is an excellent metric for differentiates Pillar from competitors who are judging the risk/reward trade off and usually more narrowly focused.” ultimately the downside risk to the investor. Pillar’s success stems from its people, Portfolio metrics are evaluated utilising process and information, as well as its Pillar’s proprietary Pillar Risk Optimization disciplined underwriting approach, says System (‘PROS’) platform,” explains Velotti. Velotti. “Pillar is comprised of people In terms of the market outlook for who have focused their careers in the 2017, Velotti observes that the current Cat reinsurance market. Our process starts Bond market is dominated by low coupon with extensive market access based on the transactions that have low multiples in team’s relationships and sourcing business relation to historical averages. across a broad spectrum of brokers and “Low multiples and low coupon intermediaries. The information we use is transactions are not overly attractive at the based on a comprehensive deal database moment. Traditional private reinsurance that we have compiled from all the deals transactions exhibit better pricing and we’ve priced over the years. multiples,” says Velotti “The large volume of deal flow allows On winning this year’s award, he adds: us to control the tail risk by diversifying via “We believe this award comes on the heels single state, single country, regional and of controlled growth of our AUM, and super regional programmes in lieu of relying investor recognition of our prudent and on national account and worldwide covers,” disciplined approach to risk selection and explains Velotti. capital preservation.” n
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 13 OVERVIEW
5 “We have a core philosophy of focusing regulations continue to favour those Prime-of- on where we think the market or regulators Primes who have structured themselves in a should be and work towards delivering a way that benefits all market participants and solution that suits this future state,” asserts promotes transparency,” adds White. Gavin White, CEO of Invast Global. The more support that hedge funds This is particularly true in a global receive in these matters, the more time they environment dominated by regulatory can devote to the task at hand of trading and change. Increasingly, managers need spotting the next best market opportunity. to think about: What are the regulators Credit markets, in particular, are proving looking to achieve? What specific structural attractive for managers to generate returns changes do we feel need to be made to on the long side as well as short. benefit market participants and satisfy future La Française Investment Solutions, regulatory states? How can we structure our part of the EUR60 billion La Française business and our products to best cater for Group, manages the flagship LFIS Vision this future? – Credit Opportunities Fund, a long/short “We realise this could take time but feel credit vehicle. that our approach will be rewarded as Renaud Champion is Head of Credit 23
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 14 BLUE DIAMOND ASSET MANAGEMENT Blue Diamond Asset Management Best Statistical Arbitrage Hedge Fund
Blue Diamond Asset Management is an how much Blue Diamond thinks it can trade independent privately owned company based in relation to the strategy. “With a strategy in Pfaffikon, Switzerland. The team of four like ours,” says Stark, “it takes a long time investment professionals and one COO has to prove to investors that you can deliver a singular focus on trading equity volatility. repeatable performance. For a long time Since the strategy launched on 30th we were at USD50 million, then suddenly September, 2011 it has generated a net we had a jump to USD150 million. As the annualised return of 21.34 per cent. fund grew, existing investors topped up their To demonstrate the robustness of the allocations. It created a snowball effect in strategy, it has generated positive returns terms of AUM growth.” during both negative and positive S&P 500 Jonas Stark, CEO/CIO at Blue There are a few key features that months, showing low correlation to hedge Diamond help Blue Diamond stand out from the funds and negative correlation to CTA indices. competition. Firstly, it has a singular focus “Last year the strategy returned 21.78 per on equity volatility. Having such a targeted cent net and we increased the AUM from approach is important if one wants to beat USD150 million to USD400 million. Most of the competition. “Secondly, whilst we run a our assets are from sophisticated institutional systematic strategy one of the key success investors like pension funds, insurance factors is that we’ve adapted the strategy companies and foundations” confirms Jonas over time. We’ve conducted quantitative Stark, CEO/CIO of Blue Diamond. research on the market to improve the The Non-Directional strategy uses strategy and harness new opportunities as systematic, proprietary investment processes they’ve arisen. to capture opportunities arising in the equity “It’s important to try and constantly volatility markets to generate attractive risk- improve how one trades the markets. That’s adjusted returns. The strategy’s investment how the team works, we are always seeking process seeks to identify and exploit out new opportunities,” stresses Stark. inefficiencies arising from the price level Blue Diamond has also spent a lot of and term structure of liquid, listed equity time getting its operational processes to a market volatility-related instruments. It very high level. It now has two dedicated establishes spread positions to capture these programmers who are responsible for a inefficiencies, explains Stark. proprietary portfolio management and back- “We believe that market inefficiencies office system. exist and that while these inefficiencies “Everything from fee reconciliation to wax and wane, robust research, rigorous cash management and reporting to clients risk management, and diligent position is fully automated. Fewer manual processes management can allow a manager to significantly reduce operational risks and continue to maintain its edge. This is costs. And that is something that investors especially true in markets like the VIX futures really appreciate when they meet us. and options where there are an increasing “A good operational infrastructure allows number of new and diverse volatility-related us to better work with clients and focus exchanged traded and privately placed on the investment strategy rather than products,” he says. get caught up in daily operational tasks Currently, the fund is closed to new that offer no value add to the investor,” investors. It is close to capacity in terms of explains Stark. n
HEDGEWEEK AWARDS Special Report Apr 2017 www.hedgeweek.com | 15 I O ATI E I C I F H HED E FU D I
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