March 2013

Hedgeweek Awards 2013 LEADING THE WAY UNRIVALLED IN CHOICE, QUALITY AND EXPERIENCE

LYXOR managed accOunt PLatfORm, innOvating since 1998

With $11bn *, only Lyxor’s Managed Account Platform gives access to over 100 managers, selected among the best in the industry. With the addition of weekly liquidity**, unrivalled transparency and sophisticated monitoring features, you can invest with confidence. We offer investors much more than a platform, we offer our unrivalled experience. think managed accounts, think Lyxor.

HedgeWeek Best managed account Platform 2012 • HFMWeek most innovative managed account Platform 2012 • The Fund Journal the Leading managed account Platform 2012 • Hedge Funds Review #1 managed account Platform from /foHf viewpoint dec 2011

For more information visit www.lyxor.com or email [email protected]

* As at 31st December 2012. ** 95% of the funds on Lyxor MAP offer weekly liquidity. This material is not intended for use by or targeted at retail customers. It is neither an offer, nor a solicitation, advice or recommendation for the purchase or sale of any securities, financial instruments or investment solutions in any jurisdiction, including the United States, or to enter into any transaction. Securities or financial instruments may not be offered or sold in any jurisdiction, including the United States, absent registration or an exemption from registration under applicable regulations. This material is issued by Lyxor Asset Management S.A., 17 cours Valmy, 92987 Paris La Defense. Lyxor Asset Management S.A. is a firm authorised by the French Autorité des Marchés Financiers under the number GP98019.

C52551 A4 297x210.indd 1 18/03/2013 18:28 Contents

AWARDS 2013

04 Hedgeweek Global Awards 17 IMQubator 2013 results Best Hedge Fund Seeding Platform 05 Winners focus on good 18 Deutsche Börse Group governance and consistent returns Best European Trading Venue By James Williams 20 Anchin, Block & Anchin LLP 06 Mendon Capital Advisors Best North American Accounting Firm Best Equity Long/ Manager 21 Kinetic Partners 07 Winton Capital Management Best European Regulatory Advisory Firm Best Managed Futures/CTA 22 Walek & Associates 08 Dexia Asset Management Best North American Public Relations Firm Best Fixed Income Manager 23 Tannenbaum Helpern Syracuse 09 Hedge Fund Research & Hirschtritt LLP Best Index Provider Best North American Law Firm 10 Meridian Fund Services 25 Peregrine Communications Best Offshore Hedge Fund Administrator Best European Public Relations Firm 14 Lyxor Asset Management 26 Agecroft Partners LLC Best Managed Accounts Platform Best Third-Party Marketing Firm 15 Deutsche Bank 27 Lockton Companies LLP Best Asian Prime Broker Best Global Provider 16 Newedge Best European Prime Broker Publisher

Editor: James Williams, [email protected] Sales Managers: Simon Broch, [email protected]; Malcolm Dunn, [email protected] Head of Events: Katie Gopal, [email protected] Chief Operating Officer: Oliver Bradley, [email protected] Chairman & Publisher: Sunil Gopalan, [email protected] Graphic Design: Siobhan Brownlow, [email protected] Photographs: William Scott Published by: GFM Ltd, 1st Floor, Liberation Station, St Helier, Jersey JE2 3AS, Channel Islands Tel: +44 (0)1534 719780 Website: www.globalfundmedia.com

©Copyright 2013 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.

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 3 results The winners AWARDS 2013

Best Long/Short Fund Manager Best North American Hedge Best North American Trading Mendon Capital Advisors Fund Administrator Venue Best Fund SS&C GlobeOp NYSE Manager Best Asian Hedge Fund Best Asian Trading Venue Insight Investment Management Administrator TKSE Best Relative Value Fund Citi Best North American Accounting Manager Best European Hedge Fund Firm Axa Investment Managers Administrator Anchin, Block & Anchin LLP Best Credit Fund Manager Maples Fund Services Best European Accounting Firm MKP Capital Best Offshore Hedge Fund Deloitte Best Administrator Best North American Regulatory Manager Meridian Global Fund Services Group Advisory Firm Swiss Capital Alternative Investments Best North America Prime IMS AG, Zurich Broker Best European Regulatory Best Managed Futures CTA Pershing Prime Services Advisory Firm Winton Capital Best European Prime Broker Kinetic Partners Best Fixed Income Fund Manager Newedge Best Offshore Regulatory Dexia Asset Management Best Asia Prime Broker Advisory Firm Best Fund Deutsche Bank Ogier Manager Best Managed Accounts Best North American Public Bernheim, Dreyfus & Co Platform Relations Firm Best Fund Lyxor Asset Management Walek & Associates Manager Best UCITS Platform Best European Public Relations The Cambridge Strategy UCITS Firm Best Event Driven Fund Manager Best Hedge Fund Seeding Peregrine Communications Cube Capital LLP Platform Best North American Law Firm Best UCITS-Compliant Product IMQubator Tannenbaum Helpern Syracuse & Deutsche Bank X Markets Best Risk Management Software Hirschtritt LLP Best Diversified Fund of Hedge PerTrac RiskPlus Best European Law Firm Funds Manager Best Fund Accounting & Simmons & Simmons Liongate Capital Management Reporting System Best Offshore Law Firm Best Specialist Fund of Hedge Tradar Walkers Funds Manager Best Managed Accounts Best Third Party Marketing Firm Financial Risk Management (FRM) Technology Agecroft Partners LLC Best Index Provider EIM LumX Best Global Insurance Provider Hedge Fund Research Best European Trading Venue Lockton Companies LLP Deutsche Bourse

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 4 The hedge fund industry today

Winners focus on good governance and consistent returns By James Williams

The winners of hedgeweek’s Global (Managed Account Platform) UK, Lyxor Asset Awards 2013 gathered at an awards Management, who delivered the introductory presentation lunch sponsored by Lyxor Asset address at the Awards. Management in London’s Mayfair earlier As it happens, institutions continued to this month. allocate to such an extent that industry-wide All agreed that last year was far from a assets topped USD2.25trillion and total net watershed for the hedge fund industry. Some inflows for 2012 were USD34.4billion. managers pointed to the fact that average Sunil Gopalan, hedgeweek’s Publisher returns of 6.2 per cent (according to the says, “What this tells us, in no uncertain HFRI index) did nothing more than paper terms, is that the face of the industry has over the cracks of 2011, when the average undergone a facelift. No longer dominated by hedge fund lost some 5 per cent, but were HNW individuals, this is a far more grown- an to take such a up market where sophisticated institutions simplistic view, they would have missed out allocate for the long-term. Managers should on countless compelling opportunities at the take reassurance from this. The only strategy level. downside, potentially, is that we will continue “On Lyxor’s Managed Account Platform to see bifurcation, whereby large managers for instance 11 out of 14 investable strategy net the majority of new assets.” indices were in positive territory. A handful “In a lower return environment, the posting double digits returns,” comments distribution of wealth between investors and Philippe de Beaupuy, Head of MAP managers is increasingly challenged. Big 11

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 5 Mendon capital advisors Mendon Capital Advisors Best Equity Long/Short Manager

Mendon Capital Advisors is based in small-cap companies, who are likely to Rochester, New York. Founded in 1996 by become the target of M&A activity. Anton Schutz, the fund employs a long/short “We still do multi-cap but my bigger wins equity strategy with an event-driven slant, tend to come from the smaller names where and focuses primarily on the US financial I really have an edge; I understand their services sector. franchise, and I have a good idea of who Since inception, the fund has managed would likely buy them,” says Schutz, adding to generate annualised returns of 14.20 per that the team currently monitors between 600 cent, with an annualised risk-free rate of 0.10 and 800 names. per cent and a Sharpe Ratio of 4.00 (through Schutz is a bottom-up stock picker and January 2013). physically shorts stocks although in periods

The long book typically holds between 40 Anton Schutz, Founder, of low volatility these might be substituted and 60 positions, while the short book holds Mendon Capital Advisors with individual put options. When trying to between 15 and 30 positions. identify shorts, Schutz says that there a Schutz spent 10 years at Chase number of factors: firstly, the credit quality Manhattan Bank before setting up Mendon. of the institution and subsequent loan This, he says, gave him a deep strategic composition. Secondly, where are they in the insight into the operational ways that banks M&A space? “Are they a seller or a buyer, get managed. and if so are they a stupid buyer? Certainly, “The reason I chose to start this fund undisciplined acquirers are a key factor to was so I could focus on the consolidation consider when shorting. of US banking. It’s already gone through a One of Mendon Capital’s strengths is the tremendous wave of consolidation but there ability to build positions on the long side way are still 7,000 banks in the US,” notes Schutz. in advance of any expected takeover deal. This Indeed, while the strategy is able to pursue is where Schutz’s expertise comes into play. opportunities across the financial services “We meet with management teams literally sector, it’s really banks and thrifts that hundreds of times a year. We know the ins provide the main focus. and outs of these companies. We don’t just The fund’s objectives are essentially know the numbers, we know the people. to exploit the fragmentation and ongoing Mendon Capital’s “I spoke with a big bank recently and consolidation trends in the financial services Jim Hutchinson (right) asked whether the CEO ever envisaged receives the award from sector. This is achieved by focusing on Hedgeweek’s Simon Broch selling. His response was: ‘All it takes is one bad visit to the doctor’.” Schutz says that they had seven M&A deals in the portfolio last year, which helped performance: “We’ve already got off to a great start this year and we expect to see a lot more M&A deal flow. I think in the next five years we’re going to see the number of US banks fall from 7,000 to around 4- to 5,000 banks.” On winning the hedgeweek award, Schutz says: “We’re excited to get recognition for the fund. After having been through the insanity of the markets over the last few years we’re pleased not only to still be in business, but to have received this award. It’s a great honour.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 6 Winton Capital management Winton Capital Management Best Managed Futures/CTA

In 1997, David Harding and two US is now Winton’s biggest market at employees established Winton with about 40 per cent. approximately USD2million. Today, Within Winton Capital, situated in that figure stands at an incredible a South Kensington Mews, the firm’s USD25.75billion. Before Winton, philosophy mirrors Harding’s academic Harding was the H in AHL. Once background; he studied theoretical AHL had been assumed into Man physics at Cambridge University. Group by 1994, Harding started Man Winton’s approach is to apply rigorous Research before leaving in 1996. quantitative models in a scientific- Winton Capital is now Europe’s largest based approach to trading the markets. CTA manager and the world’s fifth Twice a year, Harding makes a largest hedge fund firm. point of handing out a prize for the The firm’s flagship fund is the research he likes the most. This Winton Futures Fund. The portfolio illustrates clearly the collegiate is split roughly 20 per cent in environment in which Winton’s staff equities, 20 per cent in fixed income, 20 per Robin Eggar, Head of work and strive to find new trading ideas. cent in currencies, with the remainder in Communications and Public “We have 280 employees, of whom Affairs receives Winton commodities and interest rates (7 per cent). Capital’s award almost 120 are actively engaged in research. It has a Sharpe ratio of 0.80. While all quant funds have researchers, it “We have approximately USD10billion in is our USP. We employ mathematicians, the fund, whilst managed accounts total astrophysicists, engineers almost all of around USD15.3billion,” says Robin Eggar, whom have post graduate degrees. Head of Communications and Public Affairs, “We prefer investors to be investing in – confirming that WFF attracted USD200million rather than just the CTA industry or trend in net inflows for 2012. following – the idea of scientific research Last year was a challenge for all CTA applied to financial markets,” explains Eggar. funds, and Winton was no exception, ending Over the past five years Winton has been the year down a modest 3.5 per cent. That heavily researching equity markets and the aside, WFF has generated positive returns in WFF now trades individual cash equities in 13 of its 15 years and annualised returns of addition to the more traditional CTA fare of 15.76 per cent. stock indexes. Part of the reason for Winton’s continued Winton actually takes quite a considered success over the years is the fact that it approach to exploiting market inefficiencies. offers an attractive 1:20 fee structure: most It doesn’t change positions in the fund too CTAs charge a 2 per cent management often, preferring to wait for meaningful long- fee. Another key reason was the hiring of term trends to emerge. That explains why Anthony Daniell as Director of Sales and GBP30million a year is spent on research. Marketing (he became CEO in 2010 and has Over the long-term, Winton believes it has a become Chairman as of 1 January 2013). “52 to 53 per cent edge” over the market but Daniell helped develop a sales team is striving to improve that. that has marketed Winton effectively to On winning the hedgeweek award, Eggar institutional investors and pension funds all comments: “it’s always nice to be recognised around the world over the past 10 years. The by one’s peers and the industry.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 7 Dexia Asset Management Dexia Asset Management Best Fixed Income Manager

The UCITS IV-compliant Dexia Long Short the long side are in Rexam, Kinross Gold Credit fund launched in October 2009. The and UPC Germany, with key short positions fund builds its long and short positions by in Omnicom and British Telecom. screening for investment opportunities in Towards the end of 2012, the directional the broad investment grade and high yield part of the strategy performed strongly, corporate bond markets of Europe and the thanks to long exposure to peripheral US. The minimum high yield rating for net utilities, corporate names in Spain and long credit exposure is B-. Italy. Overall, last year was a case of being Since inception, the fund has returned long the periphery, short core Europe; the 11.56 per cent flat compared to 1.64 per cent opposite, says Zeenni, of 2011. for Eonia (as at Feb 2012). It has a historic Patrick Zeenni, Portfolio “On the long/short side, money was made Sharpe Ratio of 2.82. Last year, it delivered Manager, Dexia Asset thanks to refinancing by issuers taking into Management 3.98 per cent, and was able to keep volatility account the low rate environment. A lot of to within 60 to 70 basis points. issuers bought back their short maturity debt The fund offers daily liquidity, and and issued longer maturity debt. We were subsequently trades only the most liquid positioned to capitalise on this and made securities from the most developed markets. some nice profits on the long side,” confirms In terms of strategy, the fund looks to take Zeenni. What also worked well were profit on inefficiencies between investment selective long/shorts as well as negative grade and high yield markets. But rather than basis strategies. pursue a pure strategy, it actually Another issue that might come into combines two. play this year is M&A activity, with Zeenni As Patrick Zeenni, Portfolio Manager, suggesting that strong investment grade explains: “It’s a very opportunistic fund with names looking to grow could buy high quite a high turnover and is composed yield names, presenting another source of of two different strategy buckets: relative opportunities for long short strategies. value (arbitrage) strategies, and directional “Ultimately, we combine efficient market strategies where we aim to capture market timing with bottom-up fundamental bond trends. picking, and use dynamic tail risk hedging “When there’s dispersion in the market, to dampen volatility. That’s one of the key relative value trades work well, and points of the fund. We always want our when there is directionality in the market, directional bucket to be partially hedged directional strategies work well by going long through options. or short and taking profits where possible. “Currently around 50 per cent of the This certainly helped the fund’s performance fund’s gross exposure is in the relative value last year. bucket. The idea is to shift gross exposure “The two strategy buckets on average are further into relative value as there’s less weighted roughly equally within the portfolio, directionality in the market than last year.” in terms of gross exposure and contribution On winning the hedgeweek award, Zeenni to performance.” comments: ““This award is testimony to the Containers and Packaging, and TMT are unique positioning we have built for Dexia the preferred net sector exposures in the Long Short Credit with our team: delivering fund, with 5.8 per cent and 4.8 per cent consistent performance with controlled respectively. The main credit exposures on volatility.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 8 Hedge Fund Research Hedge Fund Research Best Index Provider

Kenneth Heinz is President of Chicago- investors to draw relevant comparisons based Hedge Fund Research. Since it was between the HFRI Index and the HFRU established in 1992, HFR has become the Index, based on a common language. There standard bearer for indexation and cutting are important elements of risk that need to edge analysis of hedge funds, from strategy be taken into consideration when evaluating performance through to capital inflows and performance, and I think the indices that we broad market dynamics. now offer can empower investors to make Its HFR Database provides fund-level those important characterisations.” detail on historical performance and has The fact that the HFRU Index needs to in addition developed a sophisticated fund provide daily, as well as weekly and monthly classification system. This enables users to Kenneth Heinz, President, performance figures was, says Heinz, perform benchmarking and determine relative Hedge Fund Research both an operational challenge but also a fund performance within specific sectors and strong benefit. strategies. For 20-plus years, HFR has been Currently, the firm produces over 100 conceptualising the important components indices. Its flagship HFRI Fund Weighted of the hedge fund industry, which is evident Composite Index is the most widely used in the success of its index construction and hedge fund benchmark. In addition to the research. But what differentiates the firm is HFRI and HFRX indices, the firm unveiled that it thinks about all constituent users, from this year a new suite of indices to track the asset allocators to service providers, family performance of UCITS hedge funds. offices, consultants, . The HFRU Indices cover four sub- Explains Heinz: “All of those different strategies that track the daily performance of constituents are using the HFR research and equity, event driven, macro and relative value indices to create a common language that arbitrage UCITS-compliant hedge funds. forms a backdrop for the environment they’re “We’re really excited about it. Since transacting in. Are capital flows increasing, it’s been live I don’t think there’s a major decreasing, are certain sectors doing better European asset manager that hasn’t been than others? Why did this fund do better in touch with us about these indices. than the index, and not this fund? These are We think it will be a powerful and robust all relevant questions that form the backdrop characterisation of the performance of a conversation when talking about which of UCITS-compliant hedge funds,” fund to invest in (or not). comments Heinz. “HFR operates in many respects as the Additional sub-indices are due to launch official score keeper for the hedge fund later this year, but even at this early stage industry. We provide a common point of the HFRU index suite is already tracking in reference that everyone is using, and that’s the region of 700 managers. what makes our family of indices and Heinz and his team have been working research so powerful.” on the project for quite some time. “We On winning the hedgeweek award, Heinz first conceptualised HFRU about 18 months adds: “HFR is both appreciative to the ago. It’s the culmination of a long, detailed readers of Hedgeweek and thankful to the research process. writers and editors for the distinguished “The reason why the HFRU Index is honor and recognition the Award important to us is because it enables conveys.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 9 Meridian Fund Services Meridian Fund Services Best Offshore Hedge Fund Administrator

Independently owned Meridian Fund As well as supporting new managers, Services administers funds across all Meridian has long been a champion of good hedge fund structures and private equity governance. In that sense, it has been one funds. At present, Meridian administrates step ahead of its competitors, given the high approximately USD14billion in assets. It priority governance now has today. services 85 clients across 216 funds, which “What’s different now is that institutional collectively have more than 5,650 separate investors are focused on return “of” capital investors. as well as return “on” capital. So fund According to CEO Tom Davis, with both governance is becoming increasingly the US and Europe introducing significant important. We have beefed up our existing regulation, the offshore market finds itself Tom Davis, CEO, Meridian group, and I’m pleased to report “playing the role of facilitator. We’re studying Services that the management groups that we’re what role an offshore jurisdiction can play dealing with recognise the importance of in this new regulatory environment so that good governance.” investible assets in one jurisdiction can tap This is happening both onshore as well into the investment expertise in another.” as offshore. The governance of US onshore “Prior to 2008, we would first try to get funds is performed by a managing member if the offshore business of a fund group and it’s an LLC, or a general partner if it’s an LP by doing a good job, then get their onshore structure; either way it’s an entity controlled business. Now we’re doing the complete by the hedge fund manager. opposite: we’re looking to get the onshore “What we’re recommending to our clients business through our New York office, and is that they should appoint an advisory board then assist our client with their offshore for their onshore funds that has similar offering. We then help them establish their responsibilities to a board of directors of own fund offshore, or going forward they offshore funds. To achieve this, we have can choose to join our new platform to give developed a prototype of powers and them time to grow and build a track record,” indemnities that can be formally transferred says Davis. and/or bestowed by the general partner or The platform that Davis refers to is a managing member to the advisory board. new construct, designed specifically to We’ve been working with clients to help help support small emerging managers. achieve this independent oversight role that Even though the industry is becoming more institutional investors are increasingly looking institutionalised, Meridian, as a mid-sized for, and regulators may start to demand,” administrator, has an important role to play adds Davis. getting talent to market. On winning the hedgeweek award, Davis Explains Davis: “ We feel we’ve come up comments: “I am delighted that Meridian with a great product that is going to help received this award. I’m fortunate to have lower the barriers of entry for start-ups. It a dedicated global team who share my should go live in the next couple of months. vision on the importance of client interface I don’t like the word incubator but essentially and attention to hands-on detail where it’ll be a platform for new managers to build technology is an enhancement and not a a track record and then launch a full-blown replacement for personal service to our fund structure further down the line.” clients.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 10 The hedge fund industry today

5 is beautiful, very often leaving a number of Long/Short Manager – the outlook for 2013 talented managers in the street struggling to looks promising. attract initial capital to launch their strategy,” Mendon focuses its strategy on the US adds Philippe de Beaupuy. financial services sector. Its approach is Last year, according to Hedge Fund both bottom-up stock picking and scanning Research, fixed income-based relative value the universe of 7,000 US banks for event- arbitrage became the largest strategy area, driven positional plays, which founder Anton by assets: total capital inflows for 2012 Schutz looks to build way in advance of were USD41.4billion, taking total assets in deals being completed (or not). “We meet the strategy to USD609billion. This is hardly with management teams literally hundreds surprising given that the HFRI Relative Value of times a year so we don’t just know the Index ended the year up +10.5 per cent. numbers, we know the people. We’ve got off What is more surprising is that the to a great start this year and we expect to strategy overtook equity-based strategies for see a lot more M&A deal flow in 2013. the first time in more than 20 years. Investors “For me, a perfect M&A deal is one where withdrew USD10.4billion in equity hedge everybody’s stock goes up not just the target funds last year, leaving total strategy assets stock, and we’re starting to see that in some at USD598billion. transactions. I think in the next five years For the first time in at least 18 months, we’re going to see the number of US banks there are signs that the risk on/risk off fall from 7,000 to around 4- to 5,000 banks; environment – which has plagued stock that’s a lot of banks that might disappear. pickers – has diminished. Equity markets So there will be plenty of opportunities for have recovered strongly in recent times, and our fund.” YTD the S&P 500 Index is already up 9.34 Fixed income was, as mentioned, the per cent. Suddenly, equities have regained a top strategy for 2012. But with US 30-year degree of lustre. treasuries at historic lows, and pressure As Duncan Crawford, co-global head, for investors to find attractive yields in a Newedge Solutions – low-rate environment, strategies that can winner of this year’s Best European Prime deliver either through arbitrage opportunities, Broker – comments: “The markets are like or through superlative bond picking in the a coiled-up spring; they are ready to trend, corporate high yield space, are worth their they need trend, and I think they will trend.” weight in gold. European institutions are favouring US Some believe we will see the Great equities, and for firms like Mendon Capital Rotation this year from fixed income into Advisors – winners of this year’s Best Equity equities. Others believe investors will take

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 11 The hedge fund industry today

an intermediate step, from investment grade 12 per cent of the book is holding selected into high yield; in particular short duration names with less than one-year maturity. high yield. “The idea is for the gross exposure of Dexia Asset Management’s Long/Short our relative value bucket to grow versus the Credit Fund (Best Long/Short Credit Manager) gross exposure of our directional bucket. is designed precisely to capitalise on market Currently, around 50 per cent of gross fluctuations by trading on inefficiencies exposure is in the relative value bucket between IG and high yield bonds. It does so and the idea is to build that exposure as by leveraging two strategies: relative value there’s less directionality in the market and directional, the former being best suited than last year,” explains Portfolio Manager, to dispersion in the market, the latter when Patrick Zeenni. directionality builds in the market. Investor preferences have moved to “Directional strategies work well by going embrace high quality strategies offering long and short and taking profits where transparency, liquidity, tactical flexibility, possible. This certainly helped the fund’s strategic innovation and consistent performance last year. Right now, we are performance gains according to Kenneth holding short-duration IG bonds. Around Heinz, President of Hedge Fund Research, 19

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 12 LY XOR The pOweR TO peRfORm in anY maRkeT

DESIGN Your INvEStmENt SoLutIoNS WItH A LEADING SPECIALISED ASSEt mANAGEr

AlternAtive investments • etFs & indexing • multi-Asset investments • structured investments

Lyxor asset management, a subsidiary of Societe Generale Group, was Our investment professionals deliver investment and advisory solutions for founded in 1998. institutional investors in all asset classes.

with over 600 specialists worldwide, Lyxor manages USD 99.4 Bn* of assets with a strong culture of risk-management and research, Lyxor is a leader across four key areas: alternative investments, eTfs & indexing, multi-asset in innovative, transparent and flexible asset management. investments and Structured investments. Discover more at lyxor.com or email [email protected]

* Figures as of 31st December 2012. this material is intended for professional investors only and is not directed at retail clients. This advert is issued by Lyxor Asset Management (Lyxor AM), société anonyme à directoire et conseil de surveillance having its registered office at 17 cours Valmy, 92800 Puteaux (France), 418 862 215 RCS Nanterre, authorized and regulated by the Autorité des marchés financiers (AMF). Lyxor AM is represented in the UK by Lyxor Asset Management UK LLP, which is authorized and regulated by Financial Services Authority in the UK.

C52736 PWM Icebreaker 297x210.indd 1 08/03/2013 11:20 Lyxor asset management Lyxor Asset Management Best Managed Accounts Platform

Lyxor’s Managed Account Platform is the benchmark fund, and we have a further 30 industry’s largest individual commingled existing managers in the pipeline.” managed account platform. With As opposed to the commingled approximately 100 managers running a platform, where the minimum investment diverse range of hedge fund strategies, the is USD100,000, minimum investment for Lyxor MAP is committed to providing its this S share class solution is USD5million investors – fund-of-funds, pension funds, (depending on the fund). insurance companies – with access to a Lyxor is also launching a transparency universe of best-in-class talent. project. The aim here is to provide Total AUM on the single managed account aggregated position reports, with a lag, to business is approximately USD11billion (as of Stefan Keller, Head of MAP clients investing in a basket of managed end 2012). As well as accessing managers Research & External Relations accounts. at Lyxor on the commingled platform, investors are “Basically it will provide a basket of also able to leverage the Lyxor Dedicated exposures across all funds that they are Managed Account Platforms (D-MAPs), for invested in and give the investor a look- bespoke segregated solutions. through capability, which they might need to One of the reasons for Lyxor’s continued monitor their capital costs under Solvency II, success is its ability to understand what for example. This is of particular interest for investors need and tweak the platform institutional investors. accordingly. To that end, there are a “We have this capability already, internally, number of key initiatives under way for 2013 but following discussions with our clients according to Stefan Keller, Head of MAP we understood that they too needed that Research & External Relations at Lyxor. transparency capability for regulatory and The most noticeable of these was the enhanced risk management reasons.” launch at the beginning of 2013 of the “S” Finally, another key project firmly on the share class: a super-institutional share class. agenda for 2013 is the establishment of an “This is a value proposition for our early stage manager platform. institutional investors who want to access As Keller explains: “We have registered a hedge fund through a managed account an increasing appetite for investing in format for the same Total Expense Ratio as early stage managers. Just like the S class the benchmark fund,” says Keller. offering, we look at the MAP and decide Lyxor has always been a pioneer in the how and where we can tweak it to satisfy hedge fund industry in terms of liquidity our investors. With slightly lower liquidity, and transparency; its MyLyxorMAP website but accompanying lower fees, we will apply provides investors with a next generation our existing business model for established online portal to effectively track their managers to emerging managers.” exposures and monitor their portfolio through On winning the award, Lionel Paquin, a dynamic interface. head of Lyxor MAP, says: “We would like to “The next step is to be a “crusader” for thank hedgeweek’s readers for giving us the attractive fees. This is what we have been Best Managed Account Platform Award for pushing forward with the launch of the “S” the fourth consecutive year. We see in that share class. We’ve reached agreement with Award a further confirmation of our strategy more than 30 managers on the platform and we would like to share the success with already to offer the same fees as the our investors and partners.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 14 Deutsche Bank Deutsche Bank Best Asian Prime Broker

Deutsche Bank’s Global Markets division is vast. It employs 6,000 professionals in 40 trading rooms across the globe, 18 of which are located in cities in Asia Pacific. Few prime brokers in the region can claim to have such a solid on the ground trading presence, giving hedge fund clients the speed of information and execution that’s critical for operational efficiency. Its Hedge Fund Consulting Group has 13 members globally, four of whom are based in Asia. Over the past 24 months the Group has worked with over 60 managers in Asia involved in starting up, expanding or establishing new offices in the region. As well as supporting clients in traditional Angharad Fitzwilliams Reflecting on the overall performance equity capital markets, Deutsche Bank’s receiving the award from of Asian hedge fund managers in 2012, Hedgeweek’s Publisher, business has continued Sunil Gopalan Fitzwilliams says it was a “mixed affair”, to build out its capabilities across FX and but notes that its China managers, on the Fixed Income. Its Fixed Income Prime whole, fared better than the rest. December Brokerage (FIPB), which supports client 2012 was a good month for managers and clearing for OTC swaps, has established an ensured that most finished the year strongly, active intermediation business with clients says Fitzwilliams, who continues: in Asia Pacific. Within the region FIPB offers “So far in 2013, we have seen strong derivatives intermediation to large macro- performance continue and we are delighted focused hedge funds. to be able to report that this is pulling both Looking back at 2012, Angharad European and US based investors back Fitzwilliams, Head of Hedge Fund Capital to the region. The new launch space is Group, Asia, at Deutsche Bank, says that definitely quieter than in previous years and 25 new hedge funds were launched “so it is in the China space we are seeing most we were very pleased with the growth of new launch activity. We are, however, on the our business. In addition, we have created whole very positive about 2013 and what it well in excess of USD1billion worth of RQFII might hold.” ETFs facilitating client flow and market- When asked whether Deutsche Bank was making activity. We have been significantly continuing to enhance its multi-asset class expanding our market making of ETFs in the prime brokerage capabilities in response to region over recent months.” Asian managers launching increasingly diverse One important strategic market for trading strategies, Fitzwilliams says: “Yes. One Deutsche Bank’s prime brokerage is the of our differentiating factors is the relief Greater China space. It has made a big push we can offer our managers as we look across into this market where it continues to see a the . We are well positioned for lot of growth. “We believe we are now the funds that are expanding across multi-asset largest prime broker in the Greater China classes as this is how we built our business at space. We are also focusing on our capital Deutsche Bank originally.” introduction offering for Asian managers. We On winning the award, Fitzwilliams says: host a variety of specialist Asian manager “We are extremely flattered about winning events in Singapore, Hong Kong, London such a prestigious award. Thank you and Washington DC,” confirms Fitzwilliams. Hedgeweek and your readers.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 15 Newedge Newedge Best European Prime Broker

Newedge’s business is based on an agency “We built our systems from scratch in the model benefiting from joint ownership of early part of 2000. This has meant we are two French banks, Société Générale and able to offer far more tailored solutions,” Crédit Agricole CIB. Newedge maintains says Crawford, who adds that the support membership to 60+ and 23 of commodity UCITS and 40 Act alternative commodity exchanges. mutual funds were two main developments Newedge Alternative Investment Solutions last year. (“AIS”) sits within the Prime Clearing Services “We are working on developing alternative business line and is a 100-person global solutions that will allow UCITS to construct a prime brokerage team of dedicated experts CTA portfolio without using certificates.” in liquid alternative strategies and is the Duncan Crawford, co-global Another key development last year was recognised leader in CTA, liquid global head, Newedge Alternative the enhancement of its FX prime brokerage Investment Solutions macro, currency and volatility. platform. Pivotal to this was the provision Newedge offers a full suite of prime of a “reverse give-up” function to enhance brokerage services in liquid instruments managers’ workflow. including listed derivatives, OTC centrally “A manager executes block trades with cleared derivatives, OTC FX and cash their preferred FX liquidity providers (LPs) instruments. The Capital Introductions throughout the day. The LPs notify us of team sits at the intersection of managers the trade details as they are executed and and investors. Additionally, Newedge AIS are affirmed by the managers through an has a 12-person Advisory team based in automated recap process. We net the trades London and Chicago whose deep dive into intraday positions and perform post- analysis of manager strategies enables matching services for the managers. This the Capital Introductions team to have a operational efficiency makes the managers’ more meaningful dialogue with the investor lives much easier.” community. Approximately 50 per cent of AIS In terms of trading activity for 2013, business is derived from facing investors Crawford says that they are already seeing directly via managed accounts. big inflows into equities. Provided there “We have been servicing futures is no further government intervention, the managers for over 20 years now, where equity markets should continue to recover managed accounts are the de facto way says Crawford. “Without that intervention managers can build their business. In 2000, we should see trends coming through. The we started developing our multi-asset prime markets are like a coiled-up spring; they are brokerage platform. Over this time, we have ready to trend, they need trend, and I think always maintained an open dialogue with they will trend. both managers and investors, which has “We saw some phenomenal returns in helped us in building stronger relationships,” January and February has also been a good comments Duncan Crawford, co-global head, month. Hopefully that can continue and we’ll Newedge Alternative Investment Solutions. see allocations coming back in to CTAs.” Taking a more consultative approach is On winning the hedgeweek award, helping Newedge stay one step ahead of the Crawford says: “We’ve been working hard competition. Whereas other prime brokerages trying to provide the best service we can may offer more of a “one size fits all” solution to our clients so it’s very encouraging to by focusing just on managers’ funds, AIS have received this award. The whole team understands the various conduits an allocator are pleased that our efforts have been can use to gain exposure to a strategy. rewarded.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 16 IMQubator IMQubator Best Hedge Fund Seeding Platform

As one of Europe’s leading seeding “We are very honored that the platforms, the business objective of Amsterdam-based IMQubator is simple: readers of Hedgeweek have putting investors in control when investing elected us as best seeder for in hedge funds and delivering to them a multiple income stream by investing the third year in a row. Their in emerging managers. Each manager support encourages us even receives a seed ticket of EUR25million, with more in our effort to make IMQubator normally taking a 25 per cent equity stake in the management company. a difference for institutional All funds seeded by IMQubator fall under hedge fund investors.” the umbrella of IMQ Investment Management Jeroen Tielman, IMQubator BV, which acts as investment manager. Speaking with hedgeweek on strategy move away from taking an equity stake in a selection, CEO Jeroen Tielman says that in fund management company when seeding, today’s New Normal market environment the and instead use a gross revenue share model. firm is looking more at strategies like volatility “We noticed that the implementation of arbitrage, exotic arbitrage, discretionary equity was sometimes quite complicated emerging markets macro, behaviour-based and costly, particularly in cases where the and activity-based strategies that have zero management company is regulated and or negative correlation with equities. As well the change of share ownership requires as providing seed capital, Tielman says that regulatory approval. We have decided to use in 2013 the firm intends to broaden out its more flexible GRS on a deferred basis; the remit by searching for young managers; not GRS only kicks in if and when a manager only start-ups, “but those who have been in moves beyond breakeven point because we business for a couple of years. They’ve built don’t believe in taking away cash from the an early track record, maybe have EUR40- manager while they still really need it,” says 50million in assets and are looking to grow. Tielman, confirming that IMQubator already So we are expanding our focus by providing has one or two deals in the pipeline. acceleration capital in addition to seeding.” Another key development for the firm The intention is to look for specialised is the utilisation of live video technology. strategies that might easily be scalable to Previously, all the managers seeded by “five hundred million euros”, says Tielman, IMQubator were required to operate out who continues: of Amsterdam for operational compliance “We would like to find something different purposes. This is now no longer the case. to what mainstream fund managers are “By using open high definition video lines, offering. We’ve seen a number of managers management teams will be able to remain with good track records but who are finding where they are. But we will stick to our it hard to break through the USD100million principals of closely monitoring and guiding barrier. In earlier days we turned down these the managers we seed, that won’t change.” managers but now we want to start including On winning the award Tielman says: them; that’s been a shift in strategy. We are “We are very honored that the readers of working on a proposal to our investment Hedgeweek have elected us as best seeder committee in March but I can’t give away for the third year in a row. Their support specific details at this stage.” encourages us even more in our effort to Another example of how IMQubator is make a difference for institutional hedge fund tweaking its business model is its intention to investors.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 17 Deutsche Börse Group Deutsche Börse Group Best European Trading Venue

Last year was a challenging market offer for over-the-counter interest swaps. environment for all global exchanges with Secondly, in 2011 it won Cetip, the key interest rates falling to historic lows. Brazilian central securities depository, as Consequently, Deutsche Börse Group’s its first customer for Clearstream’s Global net revenues declined by 9 per cent to Liquidity Hub. “In addition to Brazil, we EUR1.932billion (compared to EUR2.121billion already have agreements with Canada, in 2011), while net interest income from Australia, South Africa and Spain to join this the banking business decreased to Clearstream initiative. We will add a few of EUR52.0million (EUR75.1million in 2011). these markets to the Global Liquidity Hub Despite this, operating costs fell slightly this year,” confirms the spokesperson. year-on-year to EUR958.6million. Mainly Sandra Bramhoff collects Thirdly, by connecting the central because of lower net revenue, Deutsche Deutsche Börse’s award counterparty of its derivatives subsidiary, Börse Group’s earnings before interest Eurex, with Clearstream, Deutsche Börse can and tax (EBIT) declined to EUR969.4 million offer products and services which combine (EUR1.162billion in 2011). the strengths of both areas. Deutsche Börse’s most important clients, The Asian markets are a key area for the banks, today face huge regulatory and business expansion at Deutsche Börse. macroeconomic uncertainties. This has In 2009 it acquired a banking licence in resulted in both a positive and negative Singapore through Clearstream and now impact on trading activities. “In addition has some 70 staff working there. In addition to requiring hard work from us in dealing to Singapore, the Group has representative with the changes, it presents us with many offices in Hong Kong, Beijing, Tokyo opportunities, of which we have taken will and Dubai. continue to take advantage. “In the derivatives market we have, Deutsche Börse has developed solutions together with the Korean stock exchange, for banks and companies in the real developed a forward-looking form of economy quickly, competently and early on,” cooperation, in which we utilise the global explains a Deutsche Börse spokesperson. Eurex network outside the Asian time zone Robust clearing and settlement processes for Asian products – in this case derivatives are critical for maintaining the integrity of on one of the most traded indices worldwide, the financial markets, in light of events in Korea’s leading index, KOSPI. In 2012, more 2008. And it is precisely these processes that than 32million KOSPI contracts were traded Deutsche Börse has mastered “better than on Eurex – nearly twice as many as in the anyone else” says the spokesperson. previous year. “Our combination of global leadership in “At the beginning of February, we trading and clearing options, an international expanded this form of cooperation with central securities depository (Clearstream), the Taiwan Futures Exchange TAIFEX. The risk and collateral management services planned cooperation extends to trading and a range of IT and market data products and clearing of derivatives on the TAIFEX within one group is unique in our industry. index, and is scheduled to start in the This puts us in an excellent position for fourth quarter of this year,” explains the helping to shape the markets of tomorrow.” spokesperson. The Group has achieved three milestones On winning the award, the spokesperson in recent times. Firstly, last May it concluded comments: “We are delighted and feel that an agreement with the largest international this award confirms our strong position in trading houses for introducing a clearing today’s exchange environment.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 18 Overview

12 winner of hedgeweek’s award for Best Index UK and US managers on the big regulatory Provider. This promoted HFR to launch issues: CFTC and SEC regulations and the a new suite of HFRU indices at the start European AIFM Directive. of 2013, to track the daily performance of “Our US office has had to train our UK UCITS-compliant hedge funds. office on US regulation; we’ve put a lot of “The reason why the HFRU Index is investment into that. You need people here important to us is because by virtue of having in the UK to understand US regulation, more these indices it enables the user to draw so for day-to-day queries given the time-zone relevant comparisons between the HFRI Index issue,” says Andrew Shrimpton, who heads and the HFRU Index, which are based on up the Regulatory Compliance practice at a common language. There are important Kinetic Partners, overseeing the US, the UK elements of risk that need to be taken into and Hong Kong. consideration when evaluating performance, The firm has 25 people giving FSA advice and I think the indices that we now offer can to clients in the UK, and approximately 15 empower investors to make those important people in its New York office advising US characterisations,” says Heinz. managers on the best way forward under the There’s no doubt that the maturation of Directive, which comes into effect this July. the hedge fund industry is pushing managers There are four menu options to the Directive to rely on their service providers more depending on whether or not the fund is in than ever, particularly their administrators. Europe, or whether or not the manager is They need help filing their Form PF returns, based in Europe. building compliance controls, and delivering “The light touch version of the Directive accurate investor reports as clients become is where both your fund and your manager more forensic. They want to know exactly are outside Europe. A US manager looking where the alpha that their annual fees are at this menu of four options will say ‘I’ll paying for is coming from. choose the lightest touch option. I’ve got a There’s no hiding for today’s manager. Cayman fund so I’ll choose my US manager, And with the threat of the SEC or FCA rather than my UK manager, to be the AIFM’. paying firms a visit, getting one’s house in All they have to do is some reporting, and order is vital. No wonder compliance firms register the fund that they market in Europe, like Kinetic Partners – voted Best European which will be the biggest hassle.” Regulatory Advisory Firm – enjoyed a 25 per Corporate governance has become a cent increase in revenues in 2012. One of the much bigger focus in the last 12 months and firm’s big advantages is the ability to support will continue to shape the way hedge fund 24

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 19 Anchin, Block & Anchin Anchin, Block & Anchin LLP Best North American Accounting Firm

This is the third consecutive year that “I would like to thank our Anchin, Block & Anchin LLP (“Anchin”) has won this award. According to Jeffrey clients and our staff. We Rosenthal, CPA, Partner-in-Charge of have a great team and Anchin’s Financial Services Group, it’s without them we couldn’t no fluke: “I believe it reflects the level of commitment to service that we provide to have won this prestigious our clients. We’re not commodity-driven. award again this year.” What sets us apart in auditing, tax, advisory services, and accounting, is our level of Jeffrey Rosenthal, Anchin’s Financial attention and high partner touch ratio. Our Services Group partners get to know the fund managers and their perspectives.” The Financial Services have internal staffing with strength in Group at Anchin launched more than 35 accounting, others in tax, while still others years ago and includes ten partners and need assistance in both of these critical more than 50 dedicated professionals. It areas. We structure our interactions in a way works with over 350 hedge funds, mutual that we believe can be most beneficial to funds, private equity funds, funds-of-funds, our clients.” master-feeder funds, broker/dealers and One important area for the firm is family offices. supporting start-up managers and helping The philosophy of the firm is to deliver a them instill best practices from day one. broad array of proactive solutions to clients. “Many have never run their own business This proactive stance was demonstrated before and have no experience dealing with towards the end of last year. When the U.S. tax and regulatory compliance issues. We undertook a change in tax policy the firm provide advice on how to run their business made sure all of its clients were kept in the so that that transition to registration is loop, and as Rosenthal explains: seamless.” “We believe that taxes for fund managers Building strong relationships lies at and investors will rise but to what extent the heart of the firm. The goal is to work we can’t say yet. Once the preferential tax with clients long term, and this means treatment of carried interest is finally put to being disciplined when taking on start-up rest there will be other structures created managers. As Rosenthal confirms: “I’ve that may be more appropriate or tax efficient talked some people out of starting a fund for fund managers. So potentially, I think or suggested a more cost-effective solution you’ll see changes in the way funds and the to test the waters and see if it’s something related fees are structured. they really want to do. It’s not a good “From our perspective, if there’s a better investment to spend a significant amount structure that is fully within the provisions of money during the initial start-up phase if of the tax code, we would be remiss if we your strategy doesn’t work quite as well as didn’t advise our clients accordingly.” you hoped, or doesn’t appeal to potential On providing a high touch service, investors. Rosenthal says that the focus is on On winning the hedgeweek award, understanding its clients’ needs: “We Rosenthal comments: “I would like to thank customise our relationships on a client by our clients and our staff. We have a great client basis. Some clients want significant team and without them we couldn’t have won input from the partner, others don’t. Some this prestigious award again this year.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 20 Kinetic partners Kinetic Partners Best European Regulatory Advisory Firm

Kinetic Partners is a leading into play was important for us last provider of tailored consulting, year. The SEC intend to visit four advisory and assurance times as many managers as they services to clients within the used to so managers need to be financial services industry. properly prepared. Interestingly, Since it was established in what we are finding is that some 2005, Kinetic has assembled a firms are deciding to move from multidisciplinary team of industry full registration to ERA (Exempt experts drawn from regulators, Reporting Advisers). As long financial institutions and asset as you don’t have a managed management firms, as well as account of a US investor, you can a host of other professional manage an unlimited amount of services firms. It currently assets here in the UK.” services over 1,200 clients across Shrimpton says that the big eight global offices. focus for the firm this year is the To deal with the shifting AIFMD. He says that for those regulatory sands within financial services, Andrew Shrimpton receiving managers who raise money in Europe, they the award from Hedgeweek’s and to reflect the organic growth of the remain uncertain as to what the status of Simon Broch business, Kinetic Partners has undergone a marketing is going to be in the summer. restructuring process. It recently appointed “They will need to become AIFMD- founding member, Julian Korek, as CEO, in compliant quite quickly so they can have addition to a new management structure. certainty about their ability to market to Andrew Shrimpton heads up the Regulatory European investors. For those managers Compliance practice, overseeing the US, the who mainly raise money in the US, Middle UK and Hong Kong. East and Asia they’re going to be more “We’ve grown year-on-year. Our revenues relaxed and take advantage of the grace increased by 25 per cent in 2012. Our client period. They’ll get AIFM authorisation base has grown both in Europe and the US. next year.” We’ve gone from 120 hedge fund managers What also remains unclear is whether in the UK to 150 and increased our US client private placement regimes will remain open base from 60 to 90. These include start- for non-European managers. Countries like ups as well as established managers, who Germany, for example, want to close the have switched from other consultants that regime, whereas other Member States like don’t have a US footprint and US regulatory the UK plan to give managers a one-year expertise. grace period. “We have a number of hedge fund “The key issue for managers this year managers we support globally in New York, is deciding what their marketing strategy is London and Hong Kong. We’re the only and whether they need to become AIFMD- compliance firm that can provide that level of compliant as early as possible or leave it till global support,” says Shrimpton. next year.” This is crucial given that most of the On winning the hedgeweek award, major regulation affecting hedge funds is Shrimpton comments: “We are over the coming out of Europe and the US. Last year, moon to win this award and keep one step US managers were required to register with ahead of our competitors. Particularly in the SEC, while at the end of the year CFTC a year when the AIFM Directive is being registration was introduced. implemented, and regulation is front of mind Adds Shrimpton: “SEC registration coming for the financial services industry.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 21 Walek & Associates Walek & Associates Best North American Public Relations Firm

The signing of the JOBS Act in the US last and acquisitions throughout the asset year – expected to be fully enacted in 2013 management sector that are driven by the – presents hedge fund managers with the changing marketing environment for hedge opportunity to overtly develop their brand funds, of which the JOBS Act is one element. image and move past what has historically This new marketing focus will only become been an opaque image. That’s the view more important as traditional managers move of Thomas Walek, Founder of Walek & into the alternative space and bring with Associates, winner in the Best North them expertise in every aspect of branding, American PR Firm category. marketing and communications. From defining market position to One of the key features that differentiates managing media visibility, taking charge Thomas Walek, Founder of Walek & Associates from its competitors is a in crisis situations, supporting portfolio Walek & Associates focus on publishing proprietary research and holdings, improving investor outreach, analysis under the “Alternative Views” brand safekeeping reputations, and handling (www.walek.com). the needs of highly successful hedge Its most recent white paper entitled fund executives, Walek & Associates has Risk off: What Hedge Funds Need To Do pioneered the design and execution of public About The JOBS Act, highlights three areas relations campaigns to support hedge funds. for hedge fund managers to focus on: The firm’s “global boutique” business understand the JOBS Act and what it allows; model combines the professionalism and acknowledge that regardless of whether or results-driven approach of larger firms with not a firm responds to the JOBS Act, the a singular focus on service and domain industry itself will change in the months expertise that only smaller firms can provide. and years ahead, and for firms to begin Last year, it launched Walek Brand Asset discussions and determine the best course which is, says Walek, part of virtually every of action in anticipation of these changes. client and prospect strategy. “We have been Although hedge fund industry AUM is advocating for and providing a brand-focused setting records again, the vast majority approach to marketing and communications of inflows continue to go to relatively few among hedge fund managers for more managers. In this environment, says Walek, than a decade. While performance, non- “hedge fund management firms are paying correlation, diversification, risk management much more attention to brand and effective and capital preservation are, and must communications and must do so in order to remain, cornerstones of the industry, selling stand out and differentiate themselves. performance is not a viable long-term “In 2013 we will focus on helping cross-over business strategy for hedge fund managers. clients from both the traditional and alternative Walek Brand Asset is the first of its kind in asset management side prepare for and the industry and formalises our approach execute strategic, brand- and business-building and our service offering.” marketing communications programs. The Walek says that the firm is having JOBS Act will open many doors for hedge fund more and more conversations about managers. We will remain at the forefront of branding, marketing and communications these developments.” with firms in both the alternative and On winning the award Walek adds: “It’s an traditional asset management sectors: honor to receive the hedgeweek Best North “We are witnessing product developments American PR Firm Award, the only peer related to the new freedoms that the JOBS nominated award in the industry. We will Act will allow, and we are seeing and continue to work hard to earn this very high managing communications around mergers distinction.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 22 Tannenbaum Helpern Syracuse & Hirschtritt Tannenbaum Helpern Syracuse & Hirschtritt LLP Best North American Law Firm

Tannenbaum Helpern Syracuse & is important, Tannenbaum stresses that the Hirschtritt LLP is one of New York’s leading firm has seen “tremendous demand” out of boutique law firms. Co-founded by Michael Europe as well: “In particular providing US Tannenbaum in 1978, the firm blends a advice to European clients who in some way powerful mix of insight, industry expertise “touch” the US – tax, regulatory, ERISA etc. and creativity to support clients through Our size and US focus makes us a favorable challenges and opportunities. Delivering the “go to” firm for non-US law firms that need highest quality legal services in a practical help on the US piece of a cross-border and efficient manner is one of the firm’s matter.” guiding principles. Client service, industry and regulatory Tannenbaum Helpern’s Financial Michael Tannenbaum, knowledge, responsive and practical advice, Services, Private Funds and Capital co-founder, Tannenbaum and reasonable fees; these are the pillars Helpern Syracuse & Hirschtritt Markets Group, of which Tannenbaum is on which Tannenbaum Helpern has built Chairman, handles all aspects of financial its industry reputation. Says Tannenbaum: law including onshore and offshore private “Our firm is comprised of lawyers who fund formation, securities, futures, swaps are seasoned and can answer questions and other derivatives, and in particular, accurately and promptly. That’s what clients regulatory advisory services pertaining to want nowadays. We’re positioned to do that.” fund structures. In terms of growth opportunities for the Handling master/feeder funds, umbrella firm, Tannenbaum observes that already funds, advising on private equity and this year the firm has been engaged in portfolio transactions, setting up limited more M&A, hedge fund and private equity partnerships in the offshore and European work than in the last few. “This includes jurisdictions (for UCITS funds), advising non- not only PE funds but also the corporate US firms on US matters and family offices work involved in the underlying portfolio on regulation, structures and compliance transactions. Add increased SEC regulatory as well as drafting private placements and oversight in the hedge fund and PE space, other offering memoranda are just some of and it creates the makings of an interesting the areas in which the firm offers specialist and busy 2013.” advice. The firm, at 35 years young and going Last year, says Tannenbaum, represented strong, is able to compete effectively with “real growth” for the firm, not just in a law firms many times its size, and it does financial sense, but in terms of its skill set so quite well. When asked how it therefore and service delivery. “We always keep a feels to have won the hedgeweek award couple of guiding principles in mind: we for Best North American Law Firm 2013, provide solutions and we provide value. Tannenbaum replies: “It’s a confirmation that In that sense we partner with our clients. years of effort by scores of great lawyers is And that translates into practical legal being recognised by our industry peers that guidance with a high level of service and we value so much. It feels just great and I responsiveness at a reasonable cost. The sincerely thank our clients and friends and market these days clearly rewards that and also our support staff and lawyers – this as a result we’re competing well and seeing award belongs to all of us.” n a positive response from our clients.” To learn more about the firm, visit www. Whilst SEC and CFTC regulatory guidance thsh.com.

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 23 Overview

19 managers think about running their firms. fund groups that we are associated with are Institutional investors want demonstrable organised in such way that the integrity of reassurances that independent boards that information is of the highest quality. We of directors are put in place to protect see ourselves in that role,” explains CEO their interests rather than those of their Tom Davis, who makes a further interesting paymasters. observation on how the offshore and Bermuda-based Meridian Fund Services onshore worlds are converging with respect – winner of Best Offshore Hedge Fund to governance. Administrator – prides itself on having been at “We’re seeing hedge funds taking on the forefront of the governance issue. At a time independent directors not just in the offshore when differentiation is key, having a strong world but also onshore in the US as well. governance offering is a huge advantage. “What we’re recommending to our clients “The funds’ shareholders are our is that they should appoint an advisory board ultimate clients. We are the stewards of for their onshore funds that has similar information that relates to their funds and responsibilities to a board of directors of it’s extremely important that they can rely offshore funds. To achieve this, we have on the information they receive and that the developed a prototype of powers and 28

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 24 Peregrine Communications Peregrine Communications Best European Public Relations Firm

London-based PR firm Peregrine be communicated,” explains Payne. Last Communications is one of Europe’s most year, the firm won two prestigious clients: successful specialist financial PR agencies. Skybridge, the fund-of-funds behemoth, and Established in 2003 by CEO Anthony Payne, , a systematic global Peregrine has built an award-winning macro hedge fund. reputation based on proven results and first- That focus on drawing out the human side class client service. of the firm was applied recently to Cantab This year sees the firm celebrating its 10th Capital. One of the firm’s objectives is to hire year anniversary. Over the course of that the best talent out of Cambridge University. time, Payne has pursued a singular path: to Payne explains: “When we interviewed develop a fully integrated communications Anthony Payne, CEO, Peregrine Cantab Capital we asked them to tell us agency. That might sound easy, but Communications stories about themselves to find out what assembling a team with the right skills and they’re like. We came across a story about talent is anything but. how they use algorithms to order lunch. Last year, the firm strengthened its team “That really expresses the personality of further with the hiring of Alan Pitchforth as Cantab, the quirkiness and technology of the Head of Design. Pitchforth has 20 years’ firm. So we developed a job advertisement experience working with financial services for the firm using a picture of sushi with the brands, confirms Payne. This followed the algorithm they use alongside it. There was hiring, in the previous year, of Ermanno no need for a headline. The audience for Mattio as Head of Research. the ad was self-selecting, in that those who “With both Alan and Ermanno on the team understood and could decipher the algorithm we now have content plus visuals, which is were those it was meant to appeal to.” a powerful proposition. When it comes to Getting portfolio managers to say messaging, you need to have good technical something unique is of course a challenge. people like Ermanno. But you also need Consequently, coaching clients has also people to understand that messaging and become important for Peregrine. express it in a visual way.” “It’s all well and good having a strong Peregrine’s team structure is much like message but if the portfolio manager can’t that of an advertising agency. This ad agency express that message then you’ll fall at approach is becoming more important as the first hurdle. You have to find something hedge fund firms slowly start to realise that genuinely original to say. We really push moving away from generic messages and them to come up with their edge. And then mundane cityscape websites, which reveal we say, ‘now that you’ve thought about that, none of a firm’s human personalities, is you need to connect your personality, your necessary. DNA, to this message’. “We think there are two aspects to “People want to hear how a manager consider: Firstly, hedge fund managers have personally applies the investment strategy.” to come up with a unique message that On winning the award, Payne has his own differentiates themselves. message: “To win the prestigious hedgeweek “Secondly, when you look at generic Best European Public Relations Firm award hedge fund websites not only is the three years in a row is a fantastic result for message not differentiated, but there’s us, and given the voters are the investment no pull or personality at all. The visual community we are very pleased that they element needs to be very strong, and the recognise the value that we add to our personality of the hedge fund needs to clients.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 25 Agecroft Partners Agecroft Partners LLC Best Third-Party Marketing Firm

Agecroft Partners specialises in consulting “We’re very honoured to have and third party marketing for hedge funds. Its objective: to raise assets globally for won this award and what institutional-quality hedge fund managers by we’re most proud of is that utilising a consultative approach within the most of your readers are institutional investor community. The firm was founded by Don based in Europe.” Steinbrugge, who has 28 years of experience Don Steinbrugge, Agecroft Partners in the institutional investment management industry. The six senior professionals at the firm pride themselves on having credibility of the managers it represents – strong investment and industry knowledge investors know that only very high quality giving them significant credibility with funds are represented. “Our research large institutional investors. The partners process involves screening 2,000 managers each average over 16 years of industry each year,” Steinbrugge tells Hedgeweek. experience and a majority have previously “Usually we add one or two new managers worked for multi-billion dollar alternative a year.” investment firms. Each hedge fund client receives Agecroft is highly selective of the firms tailormade marketing to help its business it represents. As a result, it utilises an grow effectively. “We try to be more than just institutional-quality due diligence process in your typical hedge fund sales organisation,” manager selection. This begins by leveraging adds Steinbrugge. “With our managers we’re its industry-leading reputation to attract continuously providing feedback to portfolio high caliber managers requiring marketing managers following any meetings with support. The firm’s approach to selecting potential investors and identifying follow-up managers from a universe of thousands plans for each prospect. For investors we involves a four-stage process, namely: direct use a consultative approach where we not contact from hedge fund managers; hedge only keep them updated on the managers fund referrals from institutional hedge fund we represent, but also share our industry investors and service providers; industry knowledge to help them manage their research, and finally screening hedge fund portfolios more effectively”. databases. Steinbrugge says that most net inflows The principal aim of Agecroft, following into alternatives over the last two years the screening process, is to raise assets have come from large pension funds for its managers on either a global basis or “and we expect them to continue to be their coverage can be tailored to enhance large investors. However, we also expect a hedge fund’s existing marketing strategy endowments, large family offices and FoFs where they will focus on a particular to significantly increase their allocations in geographic region or investor market 2013 as well. This should benefit small and segment. Their senior partners typically are mid-sized hedge funds.” in touch with over a thousand investors a On winning the award, Steinbrugge month and conduct direct meetings with fifty comments: “We’re always focused on to a hundred. making sure we have a very strong brand. The fact that its screening process is Obviously we’re very honoured to have won so rigorous has helped foster Agecroft’s this award and what we’re most proud of reputation and enabled it to stand out from is that most of your readers are based in the competition. As well as enhance the Europe.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 26 Lockton Companies Lockton Companies LLP Best Global Insurance Provider

Lockton is the world’s largest more than 60 offices worldwide, privately owned insurance its global hedge funds group is brokerage firm. Clients across able to support clients in all major the globe count on Lockton for financial markets. risk management and insurance “A significant number of services, and with recorded net UK-based managers have revenues of USD 914.7million for sizeable US investor contributions. 2012, those services appear to be Given the litigious nature of the paying dividends. US and the increase in regulation, Indeed, the firm is projecting this tends to be where claims net revenues of approximately emanate from. Being a global USD 1billion for 2013: a milestone broker and being able to deal that underscores its commitment with claims on both sides of to providing its clients with best- the pond is a key advantage for of-breed insurance products. Lockton,” says Burton-Brown. Lockton’s Financial Risks As well as being appointed to division has developed relationships with Lockton’s Henry Keville a significant number of small managers due receiving the award from some of the world’s leading insurers to to extremely positive referrals, social media Hedgeweek’s Simon Broch ensure clients receive the right coverage they platforms have also proved invaluable, with need to operate with peace of mind. Alex Burton-Brown referring in particular to the Burton-Brown is an Associate Director at COO Yahoo network; a chat forum for COOs part of the alternative asset risk team within to exchange ideas. “I’ve had some clients the division. say to us ‘You’ve been recommended by “In comparison to our competitors, 2012 people on the network saying how good was a phenomenal year where we were your service is.” appointed by a large number of new clients With the AIFM Directive taking affect ranging from Europe’s largest asset manager in July, Lockton is at the forefront of all the way down to pretty much every major developments, keeping clients fully briefed start,” says Burton-Brown. on the level of professional indemnity they What sets Lockton apart is its focus is on will need to take out post implementation. growing with each client, and making sure The firm also recently hosted a seminar on that the right insurer is in place from day one; Solvency II. if managers grow their fund(s) alongside a “We think of ourselves as an outsourced diversification in the investor base this changes risk department as opposed to just an their risk profile and may affect the ability of insurance broker. We are a risk management their insurance policy to adequately respond. partner to our clients and always try to be Explains Burton-Brown: “If a fund has proactive in helping shape developments in more than 25 per cent of its investors in the the industry,” says Burton-Brown. US, for example, the appetite from certain On winning the hedgeweek award Burton- insurers to underwrite this risk can be Brown comments: “We are delighted to severely diminished. From day one we try to have been recognised by our clients and marry up the manager with the right insurer industry sector peers. The team thoroughly by understanding where they expect to be in deserve the recognition for their service- two or three years time.” centric approach. This major award has put Lockton has built its reputation as a the team on the map and will, I have no market leader in Directors and Officers doubt, propel them forward to even greater (D&O) and Professional Indemnity (PI). With heights.” n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 27 The hedge fund industry today

24 indemnities that can be formally transferred records but who are finding it hard to break and/or bestowed by the general partner or through the EUR100million barrier. In earlier managing member to the advisory board. days we turned down these managers but We’ve been working with clients to help now we want to start including them; that’s achieve this independent oversight role that been a shift in strategy. We will continue institutional investors are increasingly looking to seed managers, but in addition provide for, and regulators may start to demand,” acceleration capital,” confirms Tielman. adds Davis. Everyone involved within the industry One trend likely to continue in 2013 needs to continue to raise their game and is the willingness for institutions to take the industry to the next level as the consider seeding emerging managers. tectonic plates, pushed by regulation and There is a growing awareness that more greater governance and transparency, realign diverse sources of alpha are needed and themselves. that institutions have to become more Lyxor Asset Management, which won this adventurous, backing smaller managers as year’s hedgeweek award for ‘Best Managed well as writing huge tickets for billion dollar Account Platform’, will be doing this with fund managers like Ray Dalio’s Bridgewater three initiatives in 2013. Firstly, through the Associates. introduction of a super-institutional share Amsterdam-based IMQubator is one of class (“S” class) to give institutions access Europe’s leading seeding platforms – and to strategies through a managed account winner of Best Hedge Fund Seeding Platform format for the same Total Expense Ratio this year. Its CEO, Jeroen Tielman, says that as the main hedge fund in exchange for there seems to be less reluctance among slightly lower liquidity and a higher minimum continental European institutions towards allocation (USD5million). seeding, although he admits that it remains “We are also launching a new more widely accepted in the US, Asia and transparency project. The aim is to provide Scandinavia. aggregated positions reports, with a lag, to “I’m quite optimistic about the funding our clients invested in a portfolio of managed climate this year. There is increasing accounts. This “look through” capability awareness that seeding is not something will help them monitor capital costs under exotic bur rather an interesting area to Solvency II. pursue for one’s portfolio. A vehicle like ours “Finally, another key project is the provides investors with the opportunity to tap establishment of an early stage manager into young emerging managers. platform. This will enable investors to “We have also seen an increasing number allocate to emerging managers in the of applications (from investors) for funds same risk management and transparency with one to three years’ experience. We’ve framework that prevails for more established seen a number of managers with good track ones,” says de Beaupuy. n

Hedgeweek Awards Special Report Mar 2013 www.hedgeweek.com | 28