April 2016

Hedgeweek 2016 S In this issue…

03 Hedgeweek Global 18 HedgeMark Awards 2016 results Best Managed Account Platform 04 Honing one’s edge to 19 IndexIQ stand out from the crowd Best ’40 Act Liquid Alternatives Fund By James Williams 21 Nedelma Inc. 06 ACA Aponix Best Fund Accounting and Reporting Best Global Cybersecurity Services Services Firm Provider 22 Opus Fund Services GFM COO, Oliver Bradley, addresses 07 Agecroft Partners Best Global Fund Administrator the audience at the Hedgeweek Global Best Third Party Marketing Firm Awards ceremony 2016 23 Piquant Technologies 08 Anchin Block & Best CTA Anchin LLP Best Global Accounting Firm 24 Peregrine Communications 09 Blue Diamond Asset Best Global Public Relations Firm Management Best Statistical 26 Preqin Best Global Hedge Fund Research 10 Broadridge Financial Provider Solutions Best Risk Management Software Provider 27 Quaesta AG Best Discretionary CTA 11 Capital Support Best Global Cloud Services Provider 28 RBR Capital Advisors AG AWARDS 2016 13 Cordium Best Bias Fund Best Global Regulatory Advisory Firm 29 Sabre Fund Management 14 Cowen Prime Services Best Long/ Equity Hedge Fund Best Global Prime Broker 30 Sadis & Goldberg LLP 16 Da Vinci Invest Best Global Law Firm Best Systematic CTA 17 DMS Offshore Investment Services Best Offshore Regulatory Advisory Firm

Publisher

Managing Editor: James Williams, [email protected] Managing Editor (Wealth Adviser, etfexpress & AlphaQ): Beverly Chandler, beverly.chandler@ globalfundmedia.com; Online News Editor: Mark Kitchen, [email protected] Deputy Online News Editor: Leah Cunningham, [email protected] Graphic Design: Siobhan Brownlow, [email protected] Sales Managers: Simon Broch, [email protected]; Malcolm Dunn, [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 2016 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 2016 www.hedgeweek.com | 2 HEDGEWEEK GLOBAL AWARDS 2016 The winners AWARDS 2016

Best Long/Short Equity Strategy Best Managed Futures/CTA Best Managed Accounts Platform Hedge Fund Hedge Fund HedgeMark Sabre Fund Management Piquant Technologies Best Seeding Platform Best Long Bias Strategy Hedge Best -Linked Strategies Protégé Partners Fund Hedge Fund Best Risk Management Software RBR Capital Advisors Securis Investment Partners Broadridge Financial Solutions Best Value Oriented Strategy Best Multi-Strategy Fund of Best Fund Accounting and Hedge Fund Hedge Funds Reporting Systems The Children’s Investment Fund Enneking Asset Management Nedelma Inc. Best Sector Focused Strategy Best Single-Strategy Fund of Best Managed Account Platform Hedge Fund Hedge Funds Technology Broadwalk Asset Management LLP Skënderbeg Alternative Lyxor Investments AG Best 130/30 Strategy Hedge Fund Best Global Trading Venue Cornerstone Capital Best Systematic CTA Eurex Management LLC Da Vinci Invest Best Global Accounting Firm Best Long/Short Credit Best Discretionary CTA Anchin Block & Anchin LLP Strategies Hedge Fund Quaesta Capital Best Global Shadow Accounting Firm Capital Four Management Best UCITS Liquid Alternatives QRMO Fondsmæglerselskab A/S Fund Best Global Regulatory Advisory Best Fixed Income Credit Dunn Capital Management Firm Strategies Hedge Fund Best Event Driven Fund Cordium S.E.A Asset Management Pte Ltd Portland Hill Capital Best Offshore Regulatory Advisory Best Mortgage Backed Securites Best Fund Firm Strategies Hedge Fund Slater Investments Limited DMS Offshore Investment Services Semper Capital Management Best “40 Act” Liquid Best Global Cyber- Best Specialist Credit Strategies Alternatives Fund Services Provider Hedge Fund IndexIQ ACA Aponix Serone Capital Management LLP Best Global Index Provider Best Global Cloud Services Provider Best Equity MSCI Hedge Fund Capital Support Ltd Best Global Hedge Fund Saemor Capital Best Global Public Relations Firm Administrator Peregrine Communications Best Fixed-Income Arbitrage Opus Fund Services Hedge Fund Best Global Data Visualisation Best Offshore Hedge Fund PIMCO Software Provider Administrator Pomerol Partners Ltd Best Statistical Arbitrage Circle Investment Support Hedge Fund Best Global Consultant in Services B.V. Blue Diamond Asset Management AG Business Strategy Best UCITS Liquid Alternatives Sturgeon Ventures LLP Best Fund Administrator Hedge Fund Best Global Law Firm State Street Global Services Quest Global Advisors Sadis & Goldberg LLP Best Liquid Alternatives “40 Act” Best Offshore Law Firm Best Macro Hedge Fund Fund Administrator Ogier Lyxor Asset Management SEI Best Global Third Party Marketing Best Commodities Hedge Fund Best Global Prime Broker Firm Martin Fund Management Cowen Prime Services LLC Agecroft Partners Best Foreign Exchange Best Global Hedge Fund Research Hedge Fund Provider Sequoia Capital Fund Management Preqin

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 3 OVERVIEW

Honing one’s edge to stand out from the crowd By James Williams

With fund raising set to become even more event, with each of our winners having challenging in 2016, hedge fund managers delivered exceptional returns for their have their work cut out but as this industry respective investors. has proven time and again, innovation and James Holloway is CIO of Piquant coming up with creative ways to attract Technologies – this year’s winner for best investor dollars – as well as trade markets CTA. The Pegasus Fund enjoyed a fourfold – is never far away. Hedge funds thrive increase in assets during 2015, having on adversity, although one feels that with returned nearly 20 per cent the previous performance having lagged for a couple year, and represents a new class of CTA of years, 2016 could be a particularly that uses machine learning to control the important year. systematic trading model. Not that this was a concern for the “We try to get data from a wide range of fantastic selection of hedge funds at sources, and we are a heavily technology this year’s Global Hedgeweek Awards dependent fund. We’ve built everything

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 4 OVERVIEW

internally so that we can effectively monitor performed very well in times of uncertainty and process all of that data. We are not or crisis. There is a clear appetite in the economists at Piquant, indeed many of us market for new types of CTAs and there are trained in the sciences. This means that aren’t too many of them around. We are one we view data as being literally that; empirical of a select handful of newer quants that are observations from which we try to extract successfully doing interesting and different some kind of information, rather than using things,” comments Holloway. data to try and support a pre-existing model. Go to any conference and the chances We let the data build its own model and are, when investors are asked to vote on our systems then adapt to it accordingly,” their preferred strategy for 2016, market explains Holloway. neutral will feature prominently. In the Currently, Holloway thinks that equities current market environment, non-directional are incredibly volatile and are over-valued by strategies are garnering a lot of interest. just about any measure. “Long-only equities, The Sabre Dynamic Equity Fund managed in our view, seem a dangerous area at by London-based Sabre Fund Management present. CTAs, which are highly diversified – although awarded best equity long/short across multiple markets, have historically fund – is better thought of as being a ‘market 12

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 5 ACA APONIX ACA Aponix Best Global Cybersecurity Services Provider

ACA Aponix provides financial services firms knowledge of funds, cybersecurity and with a 360-degree, independent approach to technology best practices,” says Tedman. technology risk and governance. On 1st March 2016 the National Futures Over the past 12 months, the firm has Association followed the SEC’s example grown its client roster to 150 clients spanning by formerly introducing the Cybersecurity the US and Europe, and is now signing Interpretive Notice. Cybersecurity risk contracts in Asia. To support this expansion, assessments with regular reviews, its client-facing team has grown by 300 written information security policies, staff per cent and added offices in London and training, vendor due diligence, deployment the West Coast of America in addition to of appropriate protective measures New York. James Tedman, Managing and recordkeeping around programme Cybersecurity has become one of the Director, ACA Aponix (Europe) implementation are now all regulatory most important operational considerations for requirements for NFA member firms says hedge fund managers today, particularly as Tedman, who expects the FCA to publish regulators such as the Securities Exchange similar guidance to that of other regulators. Commission in the US make it a key priority “Many funds are concerned that they will for 2016. As James Tedman, Managing struggle to meet the requirements for different Director, ACA Aponix (Europe) comments, regulators but the good news is that they are the sophistication of attacks has increased all broadly in lock step with each other and significantly over the past 12 months: are using the National Institute of Standards “Challenges go well beyond implementing and Technology (‘NIST’) framework as the the most common technical tools of basis for their programmes.” firewalls, intrusion detection, spam filters, Aside from cyber attacks, another and the like, and require a broader effort challenge for the funds industry is vendor from more than just the IT team. Getting risk. Outsourcing back- and middle-office buy-in from the entire business is critical, functions has become popular, meaning that and staff training is valuable in ensuring sensitive data resides outside of the four staff know their roles and responsibilities, as walls of the fund manager. well as understand the risks that funds are Tedman says it is critical that funds make exposed to.” efforts “to understand where that data is Indeed, having a robust cybersecurity and the measures and controls in place programme is now a regulatory requirement to secure it. There are various generic for any SEC or NFA regulated fund and vendor due diligence templates available but Tedman expects other regulators, including firms also need to ask pointed questions the UK’s FCA, to follow suit during 2016. to determine the specifics of the vendor’s “The cornerstone of the regulators’ implementation for their firm. requirements is a cybersecurity risk “We help our clients to map out data assessment but this is a tricky and hugely residence and flow both inside and outside time consuming thing for the average their infrastructure to identify which vendors hedge fund to undertake internally, and have access to sensitive data. This helps outsourced IT providers and even internal IT to determine which vendors to include in departments are conflicted – you can’t mark the due diligence exercise for which we your own homework! Our independence have built a proprietary portal with custom from products or vendors means that we questionnaires for each vendor type,” can offer impartial advice based on our confirms Tedman. n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 6 AGECROFT PARTNERS Agecroft Partners Best Third Party Marketing Firm

Agecroft Partners was founded by Don requiring marketing support. Agecroft’s Steinbrugge, who has 32 years of experience success is that it analyses hedge funds in the institutional investment management based on its own internal selection factors industry, including previously serving as the that closely mirror those used by institutional head of sales for one of the world’s largest investors. Unsurprisingly, manager selection hedge funds and institutional investment is highly discerning. management firms. “95 per cent of hedge funds can be “Agecroft has changed the model of screened pretty quickly. It’s the remaining 5 hedge fund third party marketing,” says per cent that take a lot of time to do deep Steinbrugge. “Most third party marketing due diligence,” says Steinbrugge. models are based on leveraging personal Don Steinbrugge, Founder, Once a new manager is added, Agecroft relationships and doing extensive Agecroft Partners works to add value to its clients by focusing entertaining. Ours has been to build a global on the following three components: brand with a reputation as an industry • Quality of product thought leader, strong institutional investment • Quality of message knowledge and representing very high quality • Distribution strategy managers” To be successful at raising assets, managers Steinbrugge has been a prolific writer of have to have a high quality product that industry thought pieces and white papers, ranks well across each of the selection having written or appeared in more than 500 factors that investors use. articles in the last few years. Often asked In addition, a manager needs a concise to share his thoughts with the media on linear message that clearly articulates what the hedge fund industry, he has also been their differential advantage is across each of a regular guest on Bloomberg News and those selection factors. CNBC and has spoken at more than 100 “One of our main objectives is to ensure leading industry conferences since Agecroft’s that the product is strong, and secondly inception. that the marketing message is as strong as “This has helped us to attract some of possible to enhance investors’ perception of the highest quality hedge fund managers to the fund. represent and has also allowed us to access “The third component of raising assets many institutional investors that other third is the marketing strategy. Reaching out to party marketers have difficulty accessing,” a wide selection of investors and setting states Steinbrugge, who adds: up qualified meetings. It also requires In their latest article they predicted the making sure that we have the right follow- top 10 trends in the hedge fund industry for up strategy in place for each prospect. 2016, which has been widely covered in the Building in asset growth is vital media: https://www.linkedin.com/pulse/top- to successfully raising assets; because 10-hedge-fund-industry-trends-2016-don-a- raising asset is not linear it is exponential, steinbrugge-cfa?trk=pulse_spock-articles as the hedge fund’s brand grows in the Agecroft is highly selective of the firms it market place. I’d much rather represent a represents by utilising an institutional quality hedge fund that is going from USD75 million due diligence process in manager selection. to USD175 million than one that has been at This begins by leveraging its industry-leading USD800 million for the last few years,” says reputation to attract high calibre managers Steinbrugge. n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 7 ANCHIN BLOCK & ANCHIN Anchin Block & Anchin LLP Best Global Accounting Firm

For the sixth consecutive year, the Best preparing to register with the SEC as an Global Accounting Firm is Anchin, Block investment adviser. Adopting best practices & Anchin LLP. With a staff of more than early on is not only beneficial from a 350 and numerous specialised industry compliance standpoint, but also helps with and service teams, Anchin is a full-service investor relations. We also help our clients accounting, tax and advisory firm that evaluate whether launching a fund is truly provides investment companies, privately- the best strategy for what they want to held businesses, and HNW individuals accomplish and make sure that they evaluate with a wide range of traditional and non- all of their options before making that traditional services. Jeffrey Rosenthal, CPA, important decision,” explains Rosenthal. is Partner- in-Charge of Anchin’s Financial Jeffrey Rosenthal, Partner, The SEC plans to focus on expenses Services Group. 2015 was, he says, a Anchin Block & Anchin and fees, in addition to cybersecurity ‘breakthrough year’. preparedness, when the Office of “We saw a significant increase in the Compliance Inspections and Examinations number of startup funds, and a growing (OCIE) embarks on its latest round of trend in family offices establishing funds for inspections. It is therefore becoming investing purposes and having those funds increasingly important for hedge funds to audited. Both of these growth areas created have a clear audit trail, not only for the an expanding a market for our services,” SEC, but also to be able to communicate confirms Rosenthal. clearly with auditors and investors and show To address these important developments, support of what they have done. Anchin Block & Anchin has supplemented its “This is especially true in the valuation due diligence support for funds, ensuring it process,” says Rosenthal. “When a fund’s has knowledgeable, experienced personnel investments include more than Level One available to help its clients. “We are also or easy-to-value securities, the methodology engaging a growing number of large and that must be used to value less liquid established funds seeking a more hands-on securities is more complex. It is therefore partnership from their service providers. The important to make sure that the fund has consolidation in the accounting industry has thoroughly documented support and has led many existing funds to seek alternatives consistent, well thought out and auditable to the big four and national firms,” says procedures in place. Rosenthal. “With respect to cybersecurity, we have Anchin prides itself on providing clients many firm-wide checks and balances in with high involvement from senior personnel place and are well prepared. We strongly as well as frequent communication with encourage our clients to do likewise and fund managers. This is a key point if one advise them accordingly. We recommend considers that many start-up fund managers they create a written information security may have extensive trading experience but policy (WISP) that articulates their security little business acumen. policies and procedures, clearly assigns “We assist them with issues and help responsibilities, and describes the monitoring them avoid common pitfalls of setting up and testing of their systems.” a business. We can advise on structuring, On winning the award, Rosenthal hiring, budgeting, thinking forward about comments: “To say that we go beyond the growth, creating short- and long-term plans, expected is not just a catchphrase; it is what and establishing best practices that include we actually do.” n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 8 BLUE DIAMOND ASSET MANAGEMENT Blue Diamond Asset Management Best Statistical Arbitrage Hedge Fund

Blue Diamond Asset Management is an independent privately owned company based in Pfaffikon, Switzerland. The team of 4 investment professionals and one COO has a singular focus on the Non-Directional strategy. The strategy uses systematic, proprietary investment processes to capture opportunities arising in the equity volatility markets to generate attractive risk-adjusted returns. Since the strategy launched on 30th September, 2011 it has generated a gross annualised return of 31.9 per cent, 21.6 per cent net. The fund itself commenced trading on 1st May, 2012. To demonstrate the robustness of Jonas Stark, CEO/CIO of Blue execution process uses a portfolio Diamond collects the award the strategy, it has generated +0.7 per cent management system that has been built from Hedgeweek’s James average monthly return during negative S&P Williams entirely in-house. The system performs 500 months and 3.3 per cent average monthly several tasks throughout the day. Among return during positive S&P 500 months. Its them, it calculates the specific contracts and AUM is approximately USD168mn (as at 29th exact quantities to be traded, it reconciles February 2016), the majority (65 per cent) from trades with all brokers every 15 minutes and UK and US pension plans. it monitors risk limits in real time. “We believe that market inefficiencies Stark explains that Blue Diamond’s risk exist and that while these inefficiencies management is founded on the structural wax and wane, robust research, rigorous attributes of the equity volatility term risk management, and diligent position structure and is integrated directly into its management can allow a manager to investment and trading processes. continue to maintain its edge. This is “In addition to managing traditional market especially true in new markets like the VIX risks, the strategy manages idiosyncratic futures and options, which have certain risk resulting from strong spikes or drops in structural attributes, and where there are equity volatility, so we regularly run scenario an increasing number of new and diverse analyses to determine possible impacts on volatility-related exchanged traded and the strategy. The results of these tests are privately placed products,” comments Jonas combined with Value-at-Risk measures and Stark, CEO/CIO of Blue Diamond. position limits,” says Stark. “The Non-Directional strategy is built 2016 has already proven to be a volatile on the insight that volatility is a new and start to the year. This has played directly to relatively inefficient market. The strategy’s the strengths of Blue Diamond. The strategy systematic investment process seeks to is up +3.95 per cent (net) through February. “In identify and exploit inefficiencies arising from January and the first half of February we saw the price level and term structure of liquid strong interest in selling volatility, which created equity market volatility-related instruments. It interesting opportunities,” confirms Stark. establishes spread positions to capture these On winning this year’s award, Stark inefficiencies,” explains Stark. comments: “We feel honoured to win Blue Diamond’s systematic trade industry recognition like this.” n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 9 BROADRIDGE FINANCIAL SOLUTIONS Broadridge Financial Solutions Best Risk Management Software Provider

Whereas previously investment managers risk data. Without proper tools and a tested might have looked at risk from a ‘check- process, firms will not be able to meet current the-box’ perspective, today’s regulatory or future regulatory expectations,” says Egeth. environment and the growing sophistication To help hedge funds, Broadridge takes of institutional investors is requiring them responsibility for collecting and scrubbing take it more seriously. There is, according the data that is used for risk reporting and to Bennett Egeth, President of Broadridge provides the governance on that data. “We Investment Management Solutions, a need tie the risk and the risk calculations into the to generate consistent, reproducible risk trading workflow rather than making it an end- reporting for regulators. of-day process so that traders are aware, on “Risk requirements have a ripple effect Bennett Egeth, President an intraday level, of their risk and exposure. with managers having to explain how they of Broadridge Investment “The ultimate goal of risk management arrived at the risk numbers being reported. Management Solutions needs to be to prevent a situation from They’re detailing what their assumptions causing a negative impact on the fund’s were in calculating risk, how those portfolio, and not to provide a regulatory assumptions have changed (if at all) from the report detailing risk exposure. It’s much more previous quarterly filings, and where the data important to identify an event and curb your came from that was used to generate the risk exposure before that event happens, results. This is no longer a case of simply and that’s what we’re focused on with the plugging in numbers. It requires having the services we provide,” explains Egeth. right infrastructure,” says Egeth. “We provide an integrated solution that There are, he says, a few key challenges can consolidate at least three quarters of with respect to risk management. the product set that a manager uses. It Firstly, the larger the fund, the more significantly reduces their operational risk, diverse the infrastructure – funds need to be and also removes ‘key-man risk’. This is able to gather data from multiple sources. helping us to win business from much larger Secondly, the different platforms and hedge funds. Investors are only beginning infrastructure a fund uses doesn’t produce to ask what capability managers have to consistent data. This means that data produce a risk report throughout the day. normalisation is a real challenge, and that While these reports may not actually be the broadest asset class coverage is crucial. given to investors, it is crucial that the funds “Thirdly, once you get that data normalised, have the ability to produce them. there is an interpretive component to how “As investors become more sophisticated, you report risk. The regulations are not they will increasingly ask about intraday risk always specific on the methodology and exposures, and the tools a fund has in place, there tends to be a firm-by-firm interpretation rather than reliance on end-of-day, monthly of how to represent their risk numbers. That and quarterly reports,” comments Egeth. makes it challenging for both the fund and On winning this year’s global award, Egeth the administrators because no one wants to says: “We appreciate the this year’s award, provide the interpretation, and everyone wants and view it as confirmation that many firms to provide the processing. are recognising the importance of integrated “Managers need to develop a risk technology solutions to enable them to management culture. They can’t just wait until reduce risk, improve the quality of their data the end of the quarter and scramble together and strengthen their infrastructure." n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 10 CAPITAL SUPPORT Capital Support Best Global Cloud Services Provider

Capital Support is a leading managed IT • Cost – a private cloud invariably attracts a services provider. Midway through 2015, it higher premium in return for the increased was acquired by Six Degrees Group. Being availability and improved performance, able to rely on a stronger balance sheet, redundancy and resiliency. coupled with the fact that Six Degrees Group Discussing the characteristics of Capital owns data centres and network assets, has Support’s cloud environment, Chapman says helped Capital Support win larger and more that the cloud infrastructure is sub-divided complex customers, according to COO, into performance optimised data centres – Carl Chapman. or ‘pods’ – with each pod having separate “We’ve always been fortunate to have infrastructure components. an enviable customer list, even if most Carl Chapman, COO at Capital “As of February 2016, we have 14 pods prefer no publicity. The new names on this Support across two entirely separate clouds, each customer list are swelling the USD500bn hosting many terabytes of live data. The AUM our customers reported last year,” whole environment currently serves more says Chapman. than 3,000 seats, with capacity objectives Capital Support is able to provide of 45 per cent for any single component. customers with the option to use public cloud As we reach this limit, capacity is provided services, or to establish their own private such that at any time all systems can fail cloud. Obviously the decision will depend on over to their disaster recovery equivalent with the individual fund manager, but Chapman no impact to overall performance,” confirms says that there are common trends that the Chapman. team has identified while working with firms, As well as choosing between a public many of which tend to be driven by the fund’s or private cloud, fund managers can also tolerance to, and attitude towards: choose to build their own local infrastructure • Infrastructure Availability – for example, a to ensure that they have maximum control 99.7% SLA may be perfectly acceptable over the environment in which they operate. to a Long/Short Equity fund, since the It is this flexibility of service offering that likelihood of downtime at a peak trading puts Capital Support in a unique position. time is small. However, a Quant fund would Indeed, it is the only niche mid-market be unlikely to accept that same risk. IT services provider to the alternative • Service Level Agreement – establishing investment market that builds its own how the provider is accountable for the platforms, within its own data centres, services delivered, along with the route connected by its own networks. to remediation in the case of a failure to “This allows us to provide low-level, deliver, is often a key influencer in the end-to-end management and support of decision to host services in either a public the entire infrastructure estate. This is or a private cloud. recognised by our • Security Strategy – how tolerant the fund customers, who value the single service- is to the inherent risk using a multi-tenant level model we utilise and the certainty platform, and how aligned the provider they gain in knowing where (and how) their is to the security standards deemed data is stored and managed – an important applicable by the fund, their investors and consideration for regulators and investors,” regulators. confirms Chapman. n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 11 OVERVIEW

5 neutral plus’ strategy. Launched in February hoping that this will increase our quota of 2013, it is a fully systematic equity long/short longer term assets,” explains Hill. strategy with a variable bias. Another of our award winners this year With respect to fund raising, Melissa Hill, providing non-directional strategies to Managing Principal, confirms that Sabre investors is Pfaffikon-based Blue Diamond Fund Management has two new partners Asset Management – voted this year’s best providing acceleration capital; one in New statistical arbitrage hedge fund. The Non- York, the other in Paris. “They are going Directional strategy has been running since to help us with distribution, both in Europe 30th September, 2011 and has generated a for the UCITS version of the strategy and net annualised return of 21.6 per cent net. also in the US for the Cayman fund. We According to Jonas Stark, CEO/CIO of now have our three-year track record for Blue Diamond, institutional investors are Sabre Dynamic Equity Fund and we want choosing to allocate to the Non-Directional to maximise asset raising opportunities. We Strategy for three reasons. have also just launched a fund-of-one for a “Firstly, it offers a relatively high absolute US institution and as we are able to offer return target and it has consistently achieved bespoke portfolios to our investors, we are this target (net of fees). Secondly, the 20

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 12 CORDIUM Cordium Best Global Regulatory Advisory Firm

According to Stephen Burke, Managing own intellectual property; we are talking Director, EMEA, at Cordium, one of the about some of the world’s largest financial world’s leading regulatory compliance institutions in this context,” explains Burke. consultancies, regulation has changed the This ability to provide tiered services fund market. There is much more complexity underscores the commitment that Cordium and both investors and regulators are more has to supporting clients as they grow, and exacting. This has led to Cordium focusing their compliance needs change. on its software proposition, which culminated “We don’t provide a one-size-fits-all in the launch of a product solution set earlier solution, which has become relatively this year around how clients organise their common in the marketplace. We’re trying compliance arrangements and engage with Stephen Burke, Managing to differentiate ourselves. Our technology their compliance programmes. Director, EMEA, at Cordium framework is really the skeleton on which we “This software includes Cordium ELF, a build solutions for clients. The compliance personal compliance software management tools that we’ve built are out of reach for system, Cordium Pilot, a compliance most firms as the cost burden would be too workflow management tool, and Compliance great,” suggests Burke. Trak, which provides AML functions; in Over recent years, managers’ compliance aggregate, our systems ensure that a firm’s needs have evolved in response to a compliance arrangements are properly seemingly endless stream of regulation, the organised and that the compliance officer is latest example of which is UCITS V. Given able to oversee and monitor the compliance that UCITS V largely borrows from AIFMD activities of the firm, whether resourced in (e.g. the remuneration code), this isn’t house or by Cordium staff,” says Burke. expected to give managers too much of a As well as developing the underlying headache. platform infrastructure, Cordium has focused Nevertheless, the fact that UCITS V is on developing its on intellectual property just one piece of regulation in a regulatory on the myriad regulatory compliance tasks soup that also includes AIFMD, Dodd- that managers face. It is, says Burke, Frank Act, FATCA, upcoming Common “the bedrock of every one of our client Reporting Standards, MiFID II, Burke says relationships”. that managers increasingly need to rely on To provide solutions that are most technology to better manage data and meet appropriate to fund managers’ needs in their obligations. the UK, Cordium recently launched ‘tiered “With respect to MiFID II the details services’ support by their software. At Level remain unclear. We think that people should 3, Cordium is heavily involved in a manager’s focus on MiFID II after the summer break; compliance programme. particularly those who will be registering “We might be on site with the client for the first time,” advises Burke, who, on weekly, certainly monthly, doing a winning this year’s award, comments: programme of work. In Level 2, we might “We are delighted to be recognised by visit the client on a quarterly basis and Hedgeweek as the best global regulatory with Level 1 it is much more of an annual advisory firm. Cordium puts incredible energy check, making sure that the client is doing into ensuring our clients have world class the right things and that their compliance regulatory compliance arrangements, we infrastructure is in good order. work hard to define good practice, to find “In a software-only arrangement, the practical and cost effective ways of meeting client simply uses our tools, harnessing their ever increasing compliance obligations.” n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 13 COWEN PRIME SERVICES Cowen Prime Services Best Global Prime Broker

2015 was a big year for Concept Capital strategy and the Investment Manager is well Markets, LLC having entered into an pedigreed, we are extremely entrepreneurial agreement to be acquired by Cowen Group, and flexible in our views as to what we a leading growth investment bank and will onboard. When we onboard a new alternative investment firm with a heritage client, we want to be confident that it will dating back to 1918. be successful. We are extremely thoughtful The transaction was completed 1st in our due diligence in order to maintain September 2015 and thanks to the significant the integrity of our platform and avoid financial and intellectual resources that jeopardising any of the relationships we have Cowen has at its disposal, the newly named spent years cultivating,” confirms Rosen. ‘Cowen Prime Services’ division is now well Mike Rosen, Cowen’s Global With respect to business expansion positioned, and resourced, to further expand Co-Head of opportunities, Cowen Prime Services has its prime brokerage offering. its sights firmly set on Europe with Rosen “The acquisition is a validation of Concept confirming that the first component will be to Capital’s capabilities in the marketplace and offer outsourced trading services to hedge a realisation that with the firms’ shared view funds in London, which is scheduled to go with respect to market philosophy and client live this month. services, the opportunity is significant to grow “We will use our registered broker/ the offering globally. We have been entrusted dealer, Cowen International Limited, for our to use the Cowen name to grow the business outsourced trading solution, taking advantage and are very excited at the opportunities of the infrastructure Cowen has in place in ahead,” says Mike Rosen, Cowen’s Global London. We will then follow that up with our Co-Head of Prime Brokerage. prime brokerage offering,” says Rosen. “We Indeed, with so much turmoil in the are one of the few firms that has a full-service industry caused by the impact of Basel III offering in the introducing brokerage space regulation, bank-owned primes are jettisoning where we’ve got a significant and recognised hedge funds. This is playing straight into equity research team and solid capital the hands of Cowen Prime Services, with its markets capabilities; this definitely helps to ability to use Cowen’s balance sheet and set us apart from most of our competitors. other capital markets capabilities helping to “From a philosophical perspective, we attract and service ever larger hedge funds. view our client relationships very much “We had a very good fourth quarter as partnerships where we truly try to help onboarding new clients and we still see each manager to survive and thrive in a significant activity in the early part of 2016. competitive marketplace.” n Things slowed up a touch towards the end of January given the extent of market volatility, but the markets have settled down recently and now it’s very much business as usual,” says Rosen. One of Cowen Prime Services’ strengths as an introducing broker is the number of long-term, stable clearing relationships it has in place (five in total). This enables the firm to facilitate most hedge fund strategies in the market. “There are select strategies that we may prefer to avoid. That said, if there Mike Rosen collects the award from Hedgeweek’s James is a sound business reason for taking on a Williams

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 14 38.41 % p.a. Only in the crisis shows the sustainability of an investment strategy - the Da Vinci strategy guides you through unsafe waters on to new horizons

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[email protected] www.davinci-invest.ch You Win DA VINCI INVEST Da Vinci Invest Best Systematic CTA

Hendrik Klein and his team at Zurich-based is predicting how specific instruments Da Vinci Invest AG have been trading futures will behave when a piece of news comes on Eurex since 1995, using a sophisticated out. Although not definitive, there’s a high algorithm to track economic indicators. In probability the markets will move the way 2009, when Need to Know News brought the algorithm predicts, according to Klein. All out a computer-readable news feed, Klein trades placed by the system are short-term – immediately implemented it into the Da Vinci just a couple of minutes at the start and end algorithm. of each day – after which the portfolio reverts The proprietary strategy that resulted was back to cash. highly successful, generating nearly 14 per Last year, the strategy added equities cent between August and December of 2009. Hendrik Klein, CEO at Da Vinci (including small cap ) and FOREX On 1st June 2011, the strategy, which scans Invest alongside fixed income and commodities newsfeeds for econometric indicators such and the fund was able to generate excellent as non-farm payroll data, US unemployment returns for its investors. figures to trade as soon as there are “2015 was a record year, we were really discrepancies between the consensus view pleased,” confirms Klein. “Since inception and the actual news data, was formally we have never had a down year although launched as the K2 Tachyon Fund. investors need to be aware that this is a As its name suggests, speed lies at volatile strategy that does, on occasion, incur the of this ultra low latency trading heavy drawdowns.” strategy. Tachyons are sub-atomic particles To further enhance the capabilities that are thought to move faster than the of the trading strategy, Da Vinci Invest speed of light. added corporate news into the universe of “CERN in Geneva has been trying to newsfeeds, and plans to add natural disaster discover these tachyons for many years, news into the model in 2016. without success. We implemented our The K2 Tachyon Fund trades 16 futures ultra low latency strategy with common markets: three index futures – the Dax, EURO fiber optic cables, but our dream is to gain STOXX 50, and SMI (Swiss Market Index), an edge with sophisticated technology to three interest rate futures – the Bund, Bobl transmit information from a source to a (5-year German bond) and Schatz (2-year co-location,” explains Da Vinci Invest CEO, German bond), seven FX futures and three Hendrik Klein. commodity futures. The model developed by Da Vinci Invest The strategy thrives on market surprises uses news feeds that seek to optimise such as Mario Draghi’s announcement last their way from the source to the co-location week that the ECB would be increasing to minimise latency. The fastest order its bond buyback programme to EUR80bn executed to date was 0.6 milliseconds, per month. says Klein. Currently, the K2 Tachyon Fund Asked how such events have helped to uses co-locations in Frankfurt, Chicago and generate opportunities in the fund New Jersey. year-to-date, Klein says: “The perception “Using co-locations, our algorithm systems of the markets versus the released news analyse news and take long or short generates alpha including discrepancies positions in equities, fixed income, FX and between expert opinions and facts. There commodities,” says Klein. will be always opportunities every day i.e. on What the algorithm is essentially doing corporate news.” n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 16 DMS OFFSHORE INVESTMENT SERVICES DMS Offshore Investment Services Best Offshore Regulatory Advisory Firm

DMS Offshore Investment Services Poonoosamy to develop DMS’s own specialises in providing global fund proprietary risk system. This substantive governance with the firm best regarded approach to risk is a point of differentiation for the provision of offshore independent at DMS, having invested considerable time directors in the Cayman Islands. The second and money to ensure that its solutions are business line is its UCITS and AIFMD recognised as best in class. management company and platform based Beyond regulatory services DMS Bank in Dublin and Luxembourg. The interest in & Trust have identified and fulfilled another the platform has accelerated this year to the industry need; client friendly and responsive point where the management company has banking services providing clients with cash secured more than 60 fund mandates with Anne Storie, CEO, DMS management solutions, active fx, trading and close to 40 launched. Offshore Investment Services custody solutions. “In addition, we have over 100 risk clients In summary the DMS group is increasingly to whom we are providing a range of risk recognised as providing ‘all-encompassing and reporting services,” comments CEO, services’ thanks to the strength of its internal Anne Storie. She continues: “We’re listening technology, and the breadth of its team, both to our clients and what the industry is facing in Cayman and in Europe. in terms of regulation and we’re trying to “The banking services we are providing to find the right solutions. We have a duty to hedge funds are also of tremendous interest do so being governance experts. We want to to family offices and expanding further in to offer comprehensive solutions to our clients this group is one of our primary goals for the so that they can concentrate on managing bank in 2016,” says Storie. their fund(s).” “The latest key growth area for us is With respect to AIFMD, having real the provision of bespoke solutions for the substance on the ground is hugely beneficial structured finance industry. We recently hired to DMS hedge fund clients as the team have a new Global Head of Structured Finance, direct communication with over 19 European Murray McGregor. Murray has been in the regulators to date, thereby allowing DMS to industry for more than 20 years and we’re communicate with managers – especially excited to have him on board.” non-EU managers – on the latest regulatory “All these services are underpinned by developments. As Storie points out: “They DMS’s 15-year track record – our Directors simply don’t have the capacity to keep on have literally watched all of the regulation as top of everything themselves. it’s evolved. This gives us a level of in-house “This year, interest in our European solution governance expertise that we pass along to suite continues to build momentum. Indeed, not only our clients, but the service providers whether it is our AIFM platform, our UCITS we work alongside,” says Storie. platform, Annex IV reporting or guiding clients On winning the award for the third to register their offshore funds on a private consecutive year, Storie comments: “We placement basis – we’ve been busy across are immensely proud of our team. It’s a the board. It’s a lot for hedge funds to absorb. testament to our client-focused approach. Many are suffering from regulatory fatigue and We are also grateful to Hedgeweek’s readers our job is to help them as much as possible.” for voting for us. They put a lot of trust in us Three years ago, DMS Offshore when guiding them through regulatory and Investment Services Europe hired Jason compliance matters.” n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 17 HEDGEMARK HedgeMark Best Managed Account Platform

2015 proved to be an excellent year for can allocate to the underlying managed HedgeMark. Since BNY Mellon’s acquisition accounts. In many cases, FoHF managers of HedgeMark in May 2014, it’s thesis are allocating assets into managed account regarding the strategic value of housing a structures, using a multi-investor DMA as a dedicated managed account business within core building block for their existing FoHF a global asset servicing organisation has products, for new FoHF products, as well as been validated. for the advisory services that they provide to “Being tied to a global financial institution institutional clients,” explains Lapkin. is a critical factor when investors are HedgeMark is regarded as a pure play evaluating dedicated managed account (DMA) DMA provider. HedgeMark does not perform providers. Last year, we closed several new Andrew Lapkin, CEO of investment due diligence or manager dedicated managed account (DMA) clients HedgeMark selection. The HedgeMark DMA model, says and launched more than 20 new DMAs for Lapkin, empowers the investor to select existing and new clients, who are shifting the managers that it wants on its DMA from commingled hedge fund investments into platform “and we work them to negotiate hedge fund managed accounts,” comments an investment management agreement and Andrew Lapkin, CEO of HedgeMark. operational onboard the manager. The fund To illustrate HedgeMark’s recent selection and due diligence functions are business growth, Lapkin confirms that performed by the investor or its advisor. across the range of managed account “Our core competency is helping clients to services that HedgeMark provides, including set up and operate a private DMA platform. liquid alternative mandates, at the end of It’s a very clean model compared to others 2014 HedgeMark had platform assets of in the marketplace where core competencies approximately USD5.2bn. By the end of 2015, may be investment management or HedgeMark’s platform assets had increased rather than asset or to USD8.8bn. investment servicing.” DMAs are typically single-investor funds Adds Lapkin: “An investor might work established for the exclusive use of an with a consultant or an advisor in terms . These structures allow of selecting the fund managers for its an investor to maintain greater control DMA platform but when it comes to over their assets, receive full position-level structuring, launching and operating the transparency and customise the account funds, we believe that a global custody-type structure as well as specific investment organisation is a better fit.” strategies. Large institutional investors such HedgeMark supports the full breadth of as public and private pension plans and fund hedge fund strategies including equity-based of hedge fund firms have been the most strategies, credit strategies, significant users of DMAs as this option is strategies, high convexity strategies, risk better suited for those investing USD100mn premia strategies, amongst others. “We’ve or more per managed account. seen a mix of strategies and that’s what helps “The large pension funds want to have differentiate HedgeMark from the competition, their own private DMA platforms and FoHF some of who perhaps cannot accommodate managers are now also embracing the more complex, -heavy strategies that DMA model because they too want greater involve multiple counterparties.” control, governance and transparency of their On winning the award, Lapkin comments: hedge fund assets.” “We are honored to receive this award “FoHF managers may have sector-specific from Hedgeweek, a premier voice in the or asset class-specific fund-of-funds that alternatives industry.” n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 18 INDEXIQ IndexIQ Best ’40 Act Liquid Alternatives Fund

The IQ Hedge Multi-Strategy Tracker ETF market. It provides broad market/asset class (‘QAI’) seeks to replicate the risk-adjusted exposure that is used as a core holding in return characteristics of hedge funds using one’s portfolio.” multiple hedge fund investment styles, QAI returned approximately -2.5 per including long/short equity, global macro, cent last year (inclusive of fees), though market neutral, event-driven, fixed income that number doesn’t tell the whole story. arbitrage, and emerging markets. In the second half of 2015, market volatility Since its inception in 2009, QAI has increased substantially, with the S&P outperformed the Barclays US Aggregate declining more than 6 per cent in August Bond Index during all 12 rising rate periods. alone. That same month, QAI returned Based on IndexIQ’s proprietary rules-based Adam Patti, Founder and CEO -1.66 per cent, indicating resiliency in a process, QAI rebalances exposures across of IndexIQ challenging market. the broad hedge fund strategies to respond “Additionally, QAI has never paid out short- to the changing dynamics of the market. To term capital gains on portfolio turnover in its clarify, QAI does not invest in hedge funds nearly seven-year history,” confirms Patti. and the Index it tracks (IQ Hedge Multi- As mentioned, the IQ Hedge Multi-Strategy Strategy Index) does not include hedge Index is composed of six sub-indices, each funds as components, thus avoiding the lock replicating one of the main hedge fund ups, high fees and idiosyncratic manager strategies. Each month, the sub-indices are risk inherent with individual hedge funds. examined and scored according to a number “Instead, the index is made up of ETFs that, of factors (including a strategy’s momentum when combined, replicate the risk/return of returns and volatility) and are then characteristics of six hedge fund strategies,” reweighted based on that analysis. It is, says explains Adam Patti, Founder and CEO Patti, “a similar process that a FoHF manager of IndexIQ. might undertake in rebalancing their strategy Here are a few additional features: allocation. However our process is 100 per • Seeks performance similar to the overall cent rules-based.” hedge fund universe; Investor interest in QAI has been strong • Seeks low correlation to the equity market; over the last 12 months as volatility has come • Tax-efficient – historically has not paid out back to the fore. Not only that, but factors short term capital gains. such as divergent central bank policies, the “When we designed QAI and its underlying US Fed’s move to raise interest rates, the index, we sought to deliver true ‘hedge’ ongoing U.S. Presidential election, and more, fund performance, i.e., not a product that’s have all combined to bring hedging strategies designed to shoot the lights out, but rather to the forefront for many investors. a vehicle that was intended to provide “QAI, being the first ETF of its kind, has investors with a means to mitigate volatility, the longest track record in the category, protect against downside risk, and allow for stretching back to March 2009, so investors upside participation,” comments Patti. “QAI can see how the fund has performed has performed consistent with that mandate during a number of turbulent times. As a and investors have definitely responded fixed income alternative or an alternative to to its potential role as a fixed income traditional hedge fund exposure, the fund alternative. Investors increasingly consider continues to find numerous uses across QAI as the S&P 500 of the hedge fund investor types,” confirms Patti. n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 19 OVERVIEW

12 resulting return stream has a low correlation According to James Tedman, Managing with traditional asset classes, risk factors, Director, ACA Aponix (Europe), vendor risk and other strategies. And thirdly, their is expected to become a greater focus investment gives them access to some of during 2016. our proprietary research on volatility term “Last year we saw a significant breach structures and the volatility of volatility, which at a fund administrator and we believe that they can incorporate as a variable in their there will be others during the course of own investment decision-making processes,” the year. We are continually developing explains Stark. the vendor diligence part of our offering, Moving aside from fund strategies, asking more pointed questions. We are one issue that any hedge fund manager also introducing first hand inspections of is increasingly having to focus on is vendor sites such that we can review their cybersecurity; a theme that will undoubtedly infrastructures, meet with their staff and dominate the industry in 2016. validate of some of the question responses. All of which is good news for third party “Many clients are keen to go beyond the providers such as ACA Aponix – voted measures required by the regulators and are best global cybersecurity services provider. looking for us to assist them with this. One 25

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 20 NEDELMA Nedelma Inc Best Fund Accounting and Reporting Services Firm

The Portfolio Amalfi™ platform by Nedelma senior positions at Goldman Sachs and Inc. offers multi-asset, multi-language, are applying that expertise to enhance multi-currency dynamic reporting and data Nedelma’s products. They point out that visualisation, as well as analytical capabilities Portfolio Amalfi can be used to access fund to the asset management industry. The data anytime, anywhere and to analyse platform also offers data aggregation tools, portfolios across sectors, geographies portfolio management solutions and a and other attributes, which is a powerful calculation engine. Users can analyse and proposition for fund managers, especially view data from multiple perspectives using those who are raising assets. a combination of attributes, formulas and If you are trying to raise assets in Asia, values, with extensive options for dynamic Michael Medvinsky, CEO, for example, Portfolio Amalfi enables you customisation. Nedelma Inc to share fund information with investors in Nedelma also has an online investor their local language, e.g. Japanese. It also document repository with document approval empowers users to provide multi-currency workflow and interactive reporting. results. Portfolio Amalfi provides track “Everybody in the financial industry cares records, the fund’s performance over a user about four factors – improving performance, defined period and other valuable investor increasing transparency, raising assets and focused information and outputs. reducing costs. Our products help business “The information you see on your desktop users achieve those goals with quick can be fully replicated on the iPad. This integration and minimal input required from gives the user flexibility in how they look the user’s technology team,” says Managing at the portfolio and the ability to generate Director, Jeff Strauss. customised on the fly reports. It really helps Portfolio Amalfi™ seamlessly aggregates improve business efficiency and reduces P&L, risk, exposures, third party and demand on IT teams,” says Medvinsky. in-house data making it available across What makes Portfolio Amalfi particularly numerous devices including desktops, iPads important is the ability to enhance the and other mobile devices. Anyone using relationship with existing and potential the software – whether it’s the CFO, CIO, investors. An investor relations team portfolio manager, or operations team can generally presents a snapshot of the fund’s work remotely without having to rely on performance to a cornerstone investor using others to complete important tasks. Powerpoint. The information is static, making Nedelma’s CEO, Michael Medvinsky it difficult to provide investors with answers . (pictured) confirms that one main area of dynamically, such as “What’s the fund’s focus has been making enhancements to exposure in Latin American telecom stocks?” its iPad application on the back of recent “With Portfolio Amalfi, you can also Apple security developments. Apple security connect your iPad to a projector at an requirements are becoming stricter for investor’s office and during the presentation companies that provide Apple certified discuss the fund and manipulate and products. “We constantly focus on delivering present the data precisely in response to highly secure products. This gives our clients the investor’s questions. This achieves a lot of confidence and reassurance, when two important goals: you give the investor using Portfolio Amalfi. Their fund data is well an immediate answer and you make the protected even if they lose or misplace their investor comfortable and impressed that you iPad,” says Medvinsky. have their information at your fingertips,” Both Strauss and Medvinsky held says Strauss. n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 21 OPUS FUND SERVICES Opus Fund Services Best Global Hedge Fund Administrator

Multi-award-winning hedge fund administrator lending ecosystem,” says Hendrickson. Opus Fund Services was established in Over time, Opus has built its operational Bermuda in 2006, subsequently expanding its capabilities to enable it to work with many of footprint into the US with offices in Chicago the leading platforms such as Lending Club, (2008), San Francisco (2009), New York (2013) Prosper Marketplace etc. and Portland (2014). It serves over 275 fund “We now have clients transacting in real managers and 400+ funds with a combined estate, consumer loans, small business, AUM exceeding USD10.5bn. education and medical. We were an early Last year saw another flurry of activity adaptor and that has certainly helped us to among hedge fund administrators, both large establish a solid reputation. We work closely and small, and for a mid-sized administrator Jorge Hendrickson, Director with the platforms, technology providers to with an institutional offering, Opus was able of Sales and Business those platforms, as well as attorneys, tax Development, Opus Fund to reap the benefits; this was partly due Services firms and third party valuation companies, to M&A activity, and partly due to banking which are increasingly being used,” groups deciding to focus on other areas of adds Hendrickson. the market and/or shedding certain types of The technology capability that Opus hedge fund clients. has established enables it to connect with “Such developments have yielded some marketplace platforms and perform accurate good opportunities for us because some reconciliation and reporting on the underlying hedge fund managers have been looking for loans in a fund portfolio. Indeed, Opus is a new home and we are well placed to cater able to report portfolio-level detail and fund- for them. This was an interesting dynamic level detail to its clients and their investors. that played out in 2015, and I think it will Part of the reason why marketplace continue in 2016. There was a wide range lending has become so popular is that some of fund launches across a variety of asset institutional investors have been disappointed classes in hedge funds as well as private by the level of returns they’ve been getting equity and venture capital, direct lending from their hedge fund allocations for the fees and marketplace lending,” confirms Jorge they’ve been paying. Hendrickson, Director of Sales and Business Not that hedge funds are being overlooked Development. to any great degree. Hendrickson thinks that Indeed, Opus is at the vanguard of as the industry evolves, more institutional providing administration services to money will start going to institutional-quality managers investing in the marketplace or funds operating in the USD250mn to USD1bn ‘peer-to-peer’ lending space. AUM range; funds that are nimble and better “Orchard, a prominent technology and placed to generate solid risk-adjusted returns. infrastructure provider, recently published an “One of the biggest problems that new infographic showing the main marketplace managers face is the amount of distraction players and Opus Fund Services is listed they face over the first year or two; in other as one of only two administrators. We words the operational process interferes with got into this space very early (2011), and the investment process. But the industry is today we service 55 funds in this sector; becoming more efficient, allowing smaller as a percentage of our overall client managers to check off the number of book it is quite small, but it is quite a institutional processes through outsourcing,” significant percentage of the marketplace says Hendrickson. n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 22 PIQUANT TECHNOLOGIES Piquant Technologies Best CTA

Piquant Technologies’ Pegasus Fund predict correlations, market movements etc, launched in 2013 and has delivered stable and by pulling in massive data streams from diversifying returns annualising at just over which the different pieces of information are 10%. Piquant runs a fully automated portfolio, extracted. The more the system understands gaining trading insights by applying machine- these signals over time, the better it is able learning techniques to huge datasets. to make decisions in the portfolio. The model uses multiple signals and as “A signal is basically a statistic that tells Piquant’s Chief Investment Officer James us how a particular market is behaving. Holloway comments: “It’s hard to find new What our engine does is take all the different signals and it’s even harder to aggregate all signals and determine if they have any use that information and know what to do with it; James Holloway, CIO at in telling us what is about to happen. Overall, not only to try and determine which way the Piquant Technologies they do. Markets are pretty efficient, but not markets are going to go, but also to make completely. Each signal gives us a small hint predictions about risks, costs, and liquidity. about what is going to happen. We use that “We have an engine at the core of our information not only to decide what trades strategy that absorbs hundreds of thousands we want to do but also to position our trades of market statistics every day, allowing and make our execution more efficient,” the portfolio to adapt to changing market says Holloway. conditions. The engine understands how to In essence, the Pegasus engine can use this information and this makes us good be thought of as a massive brain, working at making allocation decisions.” through and processing data, which it uses Holloway was a Senior Researcher at to build a view of the market environment. Winton Capital and Piquant’s two other Fundamental data is not used, however, for senior partners, CEO, Roddy Orr and CTO, two reasons. Iain Buchanan were formerly with Goldman “Firstly, it’s incredibly noisy and it’s subject Sachs and Aspect Capital respectively. to constant revision. Secondly, it’s hard to Last year, Piquant’s assets grew fourfold demonstrate that the information contained on the back of a successful 2014, which saw within a fundamental data set is different to Pegasus return 19.87 per cent. what is already encoded in the market price. At the centre of the strategy lies one We need to know that we are extracting core allocation/decision-making system that different, unique pieces of information from the controls everything. The system does not data sets we are pulling in,” says Holloway. n simply look at markets in isolation and try to predict their directionality, it will also look at their peers to determine how they are doing on a relative basis. “We might look at the Hang Seng Index to see how well it is doing relative to the Nikkei 225, or to the S&P 500. We’re not just taking an outright view. At least part of our portfolio is based on making relative judgments based on various common features of the markets,” explains Holloway. Where the machine learning component comes into play is through marshalling all of Piquant’s systems, with their multiple Piquant’s Roddy Orr collects the award from Hedgeweek’s signal processing algorithms designed to James Williams

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 23 PEREGRINE COMMUNICATIONS Peregrine Communications Best Global Public Relations Firm

Peregrine Communications is an market it is becoming increasingly saturated. international, asset management marketing There are now more than 11,000 hedge communications specialist, providing funds. In the US regulated ’40 Act fund brand building, brand protection and lead space, it’s double that number. generation services to help clients grow For hedge funds diversifying into the AUM. It has been delivering integrated regulated marketplace, it is vital to have a marketing communications for hedge funds robust brand strategy “that articulates their since 2002, supporting an increasingly story, demonstrates their edge, but at the international client base from its primary same educates investors. For the most offices in London and New York. part, hedge funds buy in to the underlying Factor in that Peregrine has a bench of Anthony Payne, Chief Executive notion of market transparency and external senior advisors, including Savuti’s founder, at Peregrine Communications communications but to be effective they Ben Scales, Tim Bell, former Head of need to work with specialists that have the Alternatives at UBS, and Rob Allard, former requisite expertise in crafting that message, head of structured products at Goldman and building a comprehensive marketing Sachs, and one can appreciate the weight communications strategy,” adds Max Hilton, of expertise Peregrine clients have at their who heads up Peregrine’s New York office. disposal. For a specialist like Peregrine, building At Peregrine, they use experience and greater insights is partly a response to the analytics to understand how each piece fact that clients are increasingly asking for of marketing communications fits into the tracking and analytics. “Getting more insights overall business strategy. The construction on the end investors, packaging content of a website, social media management, effectively, working on websites, marketing digital advertising; each one plays its role in collaterals, branding; all the packaging building a brand and growing AUM. Being that goes into building excellent thought able to create effective campaigns that reach leadership. This is something we have the right audience by delivering meaningful developed with our clients quite a lot over insights using a variety of communication the last 12 months,” says Payne. channels has become a key requirement for To help build greater insights, Peregrine fund managers, as they look to stand out has established joint ventures with FCA- from the crowd, especially for those offering regulated Savuti Capital, a marketing UCITS versions of their offshore strategies. services firm which has built a global “There are an increasing number of US network of institutional investors, and White and UK hedge fund managers offering these Spider Media, a media planning and buying vehicles and they need help with marketing agency. “We are in the process of building because even if they are on a platform, they software with White Spider, which will track are not necessarily getting a lot of support,” interest areas on Twitter and other social says Anthony Payne, Chief Executive. media channels and allow us to see in “Investors into UCITS are very different to real time what IFAs and intermediaries are those who invest in offshore hedge funds interested in. and tend to be located across multiple “The point to this is that we can help geographies. Therefore, building insights into our clients to build content that investors who the investors are, how they break down actually want to hear about, rather than into different types, different geographies, what they think they want to hear about,” and then determining the best channel(s) to stresses Payne. n deliver tailored messaging is very important.” If one considers the offshore hedge fund

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 24 OVERVIEW

20 such example is the use of table top incident “Moreover, advisers registered with the response exercises whereby we simulate CFTC are required to have written policies breach scenarios and work with members and procedures regarding cybersecurity of the client’s team to test and practice controls and incident reporting by March 1, incident response plans as well as help staff 2016,” says Geffner. understand roles, responsibilities and actions Perhaps unsurprisingly, cybersecurity is to take in the event of a breach,” outlines also becoming a key consideration with Tedman. respect to . Anne Storie Ron S. Geffner, partner at New York law is the CEO of DMS Offshore Investment firm Sadis & Goldberg LLP – voted this Services Limited, Cayman’s leading provider year’s best global law firm – heads up its of fund governance and directorship services Financial Services Group. On the subject and winner of this year’s best offshore of cybersecurity, he confirms that “we are regulatory advisory services firm. actively guiding our clients with regard to the She confirms that the firm is receiving requirements and associated risks. more cybersecurity questionnaires, not just “The SEC’s Office of Compliance from institutional investors as part of their Inspections and Examinations examined ODD but also from clients’ service providers. 49 registered investment advisers and “We have a full-time cybersecurity officer 57 registered broker dealers in 2014 and who goes through all the questionnaires; in January 2015 reported that 74% of the some are comprehensive, some are just registrants interviewed experienced a cyber- check-the-box exercises. With the technology related incident. In September of 2015, the infrastructure we have in place, we are well SEC brought their first enforcement case positioned to answer any questions and against an investment adviser for allowing a help guide our clients on what the latest breach of data to occur, exposing personal regulatory developments are so that they can identifiable information of the adviser’s stay on top of their cybersecurity processes,” clients to an unknown hacker. says Storie. 31

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 25 PREQIN Preqin Best Global Hedge Fund Research Provider

Preqin is a leading alternative asset data provider that sits between managers and investors, tracking appetite for the industry based on fund raising activity and fund performance. Since it was established 15 years ago, Preqin has been the go-to source for investors as they assess manager performance and track record as part of their selection process. Amy Bensted, Head of Hedge Fund Products at Preqin gave an insightful presentation to open this year’s Hedgeweek Awards Event at the Reform Club in London. Making reference to Preqin’s latest global hedge fund report published in January, Bensted said that year-on-year, institutional investors have continued to allocate to Amy Bensted, Head of Hedge “We have asked investors about their Fund Products at Preqin, alternative assets, and 2015 was no different. plans for investing in hedge funds for nearly collects the award from “This time last year we were fielding a Hedgeweek’s James Williams a decade, and for the first time we’ve seen lot of questions about the effect of CalPERS more investors confirming that they plan to leaving the asset class; would it be the reduce their hedge fund investments than trigger for a widespread exit of institutional those saying they plan to increase their investors from hedge funds? What we saw, investments,” confirmed Bensted. Whereas in actual fact, was the complete opposite. 58 per cent said they planned to maintain We saw new institutions investing into their allocations in 2015, only 44 per cent the asset class for the first time, as well responded in kind for 2016. as existing institutions increasing their “But it’s not all bad news. Roughly 25 per allocations. cent of the investors we track plan to make “Today, we estimate that there are new investments over the course of the USD3.2tn in assets within the hedge fund year and in particular we see the strongest industry. We saw over USD70bn of net appetite from the largest hedge fund new inflows over the course of 2015,” said investors. We also think there could be good Bensted. news for emerging managers as large funds Although it was a successful year in close to new investment,” added Bensted. terms of fund raising, performance remained Bensted said that performance will a challenge for a lot of hedge funds. The become even more critical in 2016 as Preqin All-Strategies Hedge Fund benchmark investors re-evaluate what good performance returned just 2.02 per cent in 2015, and as means. “We are seeing investors evaluating Preqin’s survey results show, 33 per cent hedge funds in terms of risk-adjusted returns of investors felt that hedge funds had fallen as well as their ability to preserve capital short of expectations. Fund managers shared at times when traditional markets are not this sentiment, with 40 per cent saying that doing well. What we could see is a change they too felt performance had lagged. in how hedge funds are perceived in the In Bensted’s view, fundraising will become To view a summary of the industry over the next 12 months,” said more challenging in 2016 at the same time survey findings, please click Bensted, adding that systematic CTAs, macro as investors pay even closer scrutiny to here: www.preqin.com/docs/ strategies and equity strategies will likely be newsletters/hf/Preqin-HFSL- n performance. Feb-16-Industry-Forecast.pdf the preferred strategies this year.

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 26 QUAESTA CAPITAL Quaesta Capital AG Best Discretionary CTA

Quaesta Capital AG is an independent Swiss skew and curve trades in the g-10 currency financial services provider with a primary throughout the whole 2015.” focus on currency management. Based in Quaesta sees numerous opportunities Pfaeffikon, Switzerland, Quaesta Capital AG over the next few months. Not only is the was founded in 2005 and currently manages number of clients asking for tailored currency approximately USD3bn in currency volatility risk management solutions growing, but and global macro strategies and bespoke also, as market volatility is likely to remain currency overlay mandates. high the need for specialised advice will It is regulated both by the Swiss Financial remain elevated. Market Supervisory Authority (FINMA) “As a discretionary currency volatility and the US Securities and Exchange Thomas Suter, CEO of Quaesta manager we like the volatile environment that Commission (SEC). Capital AG has arisen from Central Bank divergence, Quaesta Capital’s FX long/short volatility shaky equity markets and other uncertainty programme is called v-Pro & v-Pro Dynamic. at present. This allows for good trading It has a nine-year track record, a Sharpe opportunities. In addition more people will ratio of 0.88 (through 31st Jan 2016), and is be willing to look into proper currency risk market neutral in its trading style. The v-Pro management solutions, which we have on strategy returned 20.06 per cent in 2015, offer too,” confirms Suter. whilst v-Pro Dynamic generated 43.35 per Quaesta Capital also sees good interest cent positive performance. from family offices in its structuring It is currently available as a Luxembourg- capabilities, where it comes up with domiciled SICAV-SIF and as managed securitised currency solutions for its clients. account. The UCITS-version of the strategy Due to the wrapping into an ISIN-bearing will go live soon. instrument, clients can get easier and more The main difference between the two competitive market access to currency versions is that v-Pro Dynamic uses around option trades and benefit from Quaesta twice the leverage of v-Pro, although the Capital’s expertise. underlying investment strategy remains “Next to our longstanding passive the same. currency overlay services, clients are once “Since our inception we always have been again asking for more active overlays in focused on currency management as the the currency space. Given our market main pillar of our business activities. For us, expectations we’re confident that our the world’s most liquid market with USD5.3tn discretionary v-Pro relative value strategy daily turnover offers a host of opportunities will continue its positive run as we note a and we feel investors want to speak with lot of good trading opportunities,” comments specialists offering this dedicated and Suter. “Our clients can draw on a number in-depth expertise,” says Thomas Suter, CEO of seasoned currency specialists to achieve of Quaesta Capital AG. an optimal and transparent currency risk 2015 has seen the v-Pro volatility strategy management setup for their firm, be it start on a positive note due to the removal of as passive or active overlay. For us the the EURCHF floor by the Swiss National Bank topic of FX Best Execution goes beyond in January, “for which we were positioned just executing on best price, but also to nicely”, confirms Suter. “As volatilities stayed have a robust and regulatory compliant elevated in major currency pairs we were able risk management setup that is built for to continue the positive performance with the future.” n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 27 RBR CAPITAL ADVISORS RBR Capital Advisors AG Best Long Bias Fund

At the heart of Swiss-based RBR Capital initial results but we believe there is still Advisors AG’s investment philosophy is massive upside to be realised via further the strong belief that rigorous bottom up cost savings.” research has the potential to allow it to Indeed, RBR Capital helped to replace outperform the markets on a consistent four out of seven people on gategroup’s basis. RBR Capital invests in companies by board of directors last year, which included building a strong fundamental investment Gerard van Kesteren, former CEO of Kuhne case allowing it to take meaningful position & Nagel, and Fred Reid, former CEO of sizes in those companies in which it has the Virgin America. most conviction. “We are not a general activist manager. Rudolf Bohli, Founder and CEO of RBR Rudolf Bohli, Founder and CEO Most of our positions in our diversified funds Capital Advisors, and his investment team of RBR Capital Advisors are not activist positions. We just found the invests only in Continental European upside potential in gategroup so compelling equities where, as Bohli explains, “we have that we started to become activist with strong local alpha with Swiss and German this position and due to the huge upside companies due to the geographical proximity potential we have created a dedicated fund,” and the fact there are no language barriers.” continues Bohli. The firm wins this year’s global award RBR’s objectives within the RBR Strategic for best long-bias fund for the RBR Strategic Fund are threefold: Value Fund, a single co-investment • For the BoD to implement a significant fund, which in effect operates in a similar restructuring programme to strengthen fashion to an activist fund. “RBR Strategic internal controls, optimise financial Value Fund was created specifically for structure and cut costs; the opportunity to allow our investors to • Return to best-in-class margins and participate in a unique opportunity to invest returns; into gategroup, a Swiss-listed leading • Restore investor sentiment to GATE which independent airplane catering company, is operating in a strong and growing where we have engaged in an activist industry. manner,” says Bohli. In Bohli’s view, frequent exchange with The fund, which has USD45mn in AUM, management is an effective way to seek currently uses moderate leverage (130 per out alpha. “Continental Europe has fewer cent) and the volatility is largely dependent hedge funds covering companies. Therefore on the performance of the gategroup stock, we believe we have a specific edge in which has returned 33 per cent over the Switzerland and Germany, where we are last 12 months and is fractionally down on a even closer culturally. With respect to other year-to-date basis. opportunities, we are excited at the low Bohli explains that RBR Capital’s position valuations of the Greek banking sector and in gategroup is not mainly based on a we are currently considering launching yet general bullishness on the aviation sector, another dedicated special fund to profit from “but rather on the enormous cost saving this opportunity.” potential within the company. We have On winning this year’s award, Bohli been pushing actively for this and we comments: “We are very pleased to see that have been engaging with the board and our approach of creating special opportunity the management of the company for more funds has been proven to produce the than 18 months. Our efforts have produced results that we set out to achieve.” n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 28 SABRE FUND MANAGEMENT Sabre Fund Management Best Long/Short Equity Hedge Fund

For the last three years, Sabre Fund Sabre Dynamic Equity Fund represents Management, one of London’s most well the latest evolution of Sabre, building on the established hedge fund managers, has been highly successful track record in generating running a low net equity strategy in tandem returns from the Style Arbitrage Fund. Sabre with the market neutral Sabre Style Arbitrage combines its original market neutral stock Fund. selection process with directional tilting, Launched in February 2013, Sabre driven by risk sentiment. It also incorporates Dynamic Equity Fund is a fully systematic some new factors that improve the equity long/short strategy with a risk/return profile of the Fund. “It has variable bias. been designed to profit in more market “On average, markets go up. So by Melissa Hill, Managing environments than a pure market neutral constraining a strategy to remain market Principal, Sabre Fund fund,” says Hill Management neutral – as we do with our Style Arbitrage On winning this year’s award, Hill says: Fund – you will leave some of the available “The Sabre team is thrilled to have won our equity returns on the table. What appeals to first award for Dynamic Equity. It is a great investors about our Dynamic Equity Strategy recognition of our efforts to provide investors Sabre’s Dan Jelicic collects is that by incorporating a core market neutral with an innovative strategy and excellent the award from Hedgeweek’s component, we can provide a defensive James Williams risk/adjusted returns”. n equity product – equity-style returns but with lower volatility” explains Sabre’s Managing Principal, Melissa Hill. From February 2013 through January 2016, Sabre Dynamic Equity Fund has delivered an annualised Sharpe ratio of 1.58 with an annualised volatility of 9.6 per cent. “We’ve achieved compound annualised returns of 15.3 per cent, which is in line with our target range,” says Hill. What sets Sabre apart from other quantitative specialists operating in the market neutral space is that it is primarily Europe-focused; this applies to both the market neutral Sabre Style Arbitrage Fund and Sabre Dynamic Equity Fund. “Ever since we’ve been running dynamic style rotation strategies in 2002, the alpha generated by our models has been stronger from the UK and Europe than it has been from the US. Although we utilise a universe of 1,300 stocks, of which 800 are European and 500 are US, in terms of the geographic attribution of the book, approximately 80 per cent is allocated to Europe/UK,” confirms Hill.

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 29 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 in or hosts industry events where the firm, internationally as a dominant force in the its clients and colleagues, and other market financial services sector, Sadis & Goldberg participants can exchange their collective serves clients throughout the world and was observations and perspectives. recently ranked as one of the top five law Sadis & Goldberg takes pride in their firms for hedge fund launches in the 2016 collegiate team-oriented environment. Preqin 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, Sadis & partner supervision. of 13 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 800 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 centers 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 behaviors, favored 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 honored to be recognised by our intelligence. The firm is regularly called industry in this category.” n

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 30 OVERVIEW

25 It is worth stating, in conclusion, that managers the opportunity to build their brand aside from the continual headache of coping and distribute their content cost effectively. “If with regulatory developments and delivering you add in to that all the analytic capabilities, valuable returns for investors, today’s hedge there’s a lot you can do today to build your fund management community must also brand in a sophisticated, targeted way. We’ve focus on how to build a more effective brand been doing, for example, some interesting identity. Standing out from the crowd, in education videos; Elm Partners* is one, which an industry that now has more than 11,000 has been very successful,” confirms Payne. hedge funds, is critical. There’s no doubting that hedge fund “Boutique fund managers, which managers still have a way to go to fully institutional investors are looking more embrace digital marketing and brand closely at, need to improve their look and building. But if, as expected, the fund feel and shout about their differentiators. raising environment becomes even more They need more sophisticated marketing and competitive, the first movers will likely be the appetite in the market is clearly building,” tomorrow’s winners. n suggests Anthony Payne, Chief Executive of Peregrine Communications – winner of this *www.peregrinecommunications.com/case_ year’s best global PR firm. study/elm-partners-stock-market-risk-motion- He says that social media is giving graphics-animation

HEDGEWEEK AWARDS Special Report Apr 2016 www.hedgeweek.com | 31