Best for Emerging Market Alternative Asset Management With our hedge fund heritage and by staying true to our specialist fixed income roots, we pioneer new investment strategies using our broad range of sub-asset class expertise, with a focus on absolute returns and capital preservation.
Best Liquidity Management Team - USA Our firm’s success is driven by a ‘client first’ culture. This is not a new approach for the business but rather the foundation as we strive to work closely with clients to exceed their expectations.
Stability & Flexibility
Reinsurance that stands above the rest
In a competitive environment, we recognise the need for continuous improvement to meet changing demands.
BERMUDA / LONDON / SINGAPORE W W W. H AV E R F O R D B E R M U DA . C O M
HAVERFORD
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Welcome to the 2015 Alternative Investment Awards!
Best for Emerging Market Alternative Asset Management BlueBay Asset Management
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Best Liquidity Management Team - USA RBC-GAM US
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Best in Emerging Markets Apple Tree Capital Ltd.
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Best Global Due Diligence Firm – 2015 Castle Hall Alternatives
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Today, more than ever before, investors are seeking newer and more innovative ways to maximise returns. As a result, professionals across a wide spectrum of global industries and sectors are finding new paths and avenues to further refine and develop their services and meet their clients’ ever-changing demands.
Award for Excellence in Managed Data Services - UK 22 RIMES
The 2015 Alternative Investment Awards honour the dedicated individuals and businesses making a mark in this fascinating and constantly evolving sphere, and puts the spotlight on the leading lights in the sector, as well as smaller niche companies making headway away from the limelight.
Excellence in Middle-Market Investment Banking – USA & Best Start-Up Direct Investment Jordan, Knauff & Company
Best Africa Focused Investment Manager Mediterrania Capital Partners
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Best Fund of Funds - UK Platinum All Star Fund Limited
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Equity Market Neutral Hedge Fund of the Year QQM Fund Management AB
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Best Indian Credit Fund Samena India Credit Fund
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Best for Energy Infrastructure Investments - USA Starwood Energy Group
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Best Fund in Asia - Tarascon Asia Absolute Fund Tarascon Capital Management
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Best Absolute Return Fund - Australia Agora Asset Management
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Best Alternative Investment Portfolio Manager / Most Innovative Fund Managers & Best Performing Fund of Funds (1 Year) – USA AltB Partners
Best UK Real Assets Fund Architas Diversified Real Assets Fund
Prestigious awards such as these are given purely on merit and only recognise those most deserving for their services and expertise provided over the last 12 months. As a result, award winners can be safe in the knowledge that their awards are a testament to their exceptional performance in these volatile, fascinating and innovative industries. So to find out more about these exciting and innovative companies, read on…. David Keenan, Editor
Best Tactical ETF Portfolio Manager - USA 24 AthenaInvest
Award for Excellence in Fund Management - UK Exception Capital
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Best Capital Markets Software Provider 28 Fenergo 30
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Preserve and grow wealth across generations Turcan Connell Asset Management combines the expertise of our Financial Planning and Investment Management teams, covering all aspects of wealth structuring and wealth management. With offices in Edinburgh, Glasgow and London we work in tandem with our legal and tax colleagues in the Turcan Connell Group. We believe strongly in the integration of our core specialisms and the resultant benefits for our clients. Whether you require our full suite of services, or simply one aspect, our flexible and tailored approach is designed to suit each client’s individual needs. We believe that taking a long-term view is a fundamental component of wealth management, and our success in building enduring relationships is based on a real desire to see things from each client’s perspective. Contact our experts today.
Edinburgh
Glasgow
London
Princes Exchange, 1 Earl Grey Street, Edinburgh EH3 9EE Tel: 0131 228 8111 Sutherland House, 149 St Vincent Street, Glasgow G2 5NW Tel: 0141 441 2111 Follow us on Twitter @TC_Wealth enquiries@turcanconnell.com www.turcanconnell.com Turcan Connell Asset Management Limited is authorised and regulated by the Financial Conduct Authority. Turcan Connell is a Partnership of Scottish Solicitors regulated by The Law Society of Scotland.
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Best Fund of Hedge Funds - MAYIBENTSHA GROWTH Fund 94 Novare Investments
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Best Holistic Financial Planning Firm - UK 96 Nurture Financial Planning Ltd
Best Securities Software Solution Provider - USA 58 Computershare
Best for Energy Investments - Connecticut 98 Parker Global Strategies
Best for Financial Planning & Retirement Planning 60 Cornerstone Investment Services
Best Global Fund Accounting Software - Penny® 100 Penny-It Works
Best Multi-Strategy Program - UK 62 CrescoCap Multi-Strat Program
Highly-Specialized Investment Service Provider of the Year - USA 102 Presidium Partners
Award for Innovation in Emerging Market Investment Strategy 64 Emerging Wealth Equity
Award for Excellence in Strategic Portfolio Development - USA 104 Protege Partners
Award for Excellence in Capital Management - Bermuda 66 Equilibria Capital
Best Industrial Property Specialist - Western U.S. BKM Capital Partners Award for Excellence in Alternative Capital Raising Services Capstan Capital Partners
Best-in-Class Hedge Funds - UK 106 PwC
Best Assurance & Advisory Firm in Alternative Investment - Luxembourg 68 Ernst & Young
Best for Hedge Fund Market Data Integration 70 FASCET LLC
Award for Excellence in Private Equity - New York & Sustained Excellence in Secondary Investments - USA 110 Second Alpha
Best for Futures and Options Portfolios & Best Risk Adjusted Returns 72 Finex LLP
Best Managed Futures Program-Global Capital Allocation Fund - Australia 74 Global Capital Allocation Fund
Best Investment Industry IT Provider - USA 76 Halcyon Financial Technology
Award for Innovation in Online Money Management 78 Investment POD
Best Long-Term Absolute Return Fund (2 Years) 80 The Kriya China Fund
Global Macro Strategy Fund of the Year - Switzerland 82 LCJ Investments S.A
Best Performing Multi-Asset Hedge Fund, 2004-2014 Top Performing Opportunistic Capital Management Firm, 2014 84 Melkonian Capital Management
Best Financial Adviser - Missouri 86 MonetaGroup®
Best SEC-registered Investment Advisor - Kentucky 88 Navin Advisors LLC
Sustained Excellence in Fund of Funds Investments - USA 90 Northern Trust Asset Management
Award for Innovation in Foreign Direct Investment Strategies, Nova Scotia - Canada 92 Nova Scotia Business Inc.
Best Infrastructure Focused Investment Manager 108 RARE Infrastructure (UK) Ltd.
Best Software Services for Regulated Businesses 112 Sentronex Limited
Best Tech, Media & Entertainment VC – USA & Full Service Venture Capital Firm of the Year - North Carolina 114 SierraMaya360
Best Asset Manager in South Korea 116 SPARX Asset Management Korea Co., Ltd
Best Private Equity Manager - Minnesota 118 Spell Capital Partners, LLC
Best for Trust & Trustee Services - UK STM Fiduciaire Limited
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Award for Innovation in Quantitative Investing Sunrise Capital Partners, LLC
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Best for Absolute Return Derivative Based Solutions & Best Newcomer in Managed Futures Synchrony Capital
Best Independent Asset Manager - France Syquant Capital
Award for Innovation for Insurance-Linked Securities & Independent Insurance Investment Manager of the Year - Switzerland Twelve Capital
Award for Excellence in Capital Preservation - New York Varadero Capital, L.P.
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Best for Emerging Market Alternative Asset Management
BlueBay Asset Management Company: BlueBay Asset Management. In the United States contact RBC Global Asset Management (U.S.) Inc. (RBC GAM-US) RBC Global Asset Management (U.S.) Inc. (RBC GAM-US) Name: Mike Refojo Email: mike.refojo@rbc.com Web Address: www.rbcgam.us.com RBC GAM-US Boston Office Address: 225 Franklin Street, Boston, MA 02110 Telephone: 617.722.4740 Name: Matthew Appelstein Email: matthew.appelstein@rbc.com Web Address: www.rbcgam.us.com RBC GAM-US Boston Office Address: 225 Franklin Street, Boston, MA 02110 Telephone: 617.722.4711 BlueBay Asset Management LLP Web Address: http://www.bluebayinvest.com Address: 77 Grosvenor Street, London, W1K 3JR
BlueBay Asset Management is one of Europe’s largest fixed income specialists with strategies comprising traditional, total return and alternative products. As winners of “Best for Emerging Market Alternative Asset Management,” they spoke to us about the many challenges and opportunities that lie in emerging markets.
www.wealthandfinance-intl.com
We have been investing in emerging markets since 2002. Since then, we have offered active long- only, total return and hedge fund solutions in sovereign and corporate debt, in hard and local currency. We have chosen to operate in this area because as investors, we believe the higher secular growth rates and spread pick-up in emerging countries and corporates can offer a compelling risk/return profile relative to developed markets. With our hedge fund heritage and by staying true to our specialist fixed income roots, we pioneer new investment strategies using our broad range of sub-asset class expertise, with a focus on absolute returns and capital preservation. We invest for our clients across the fixed income spectrum on a global scale, from active long-only (benchmark aware) portfolios to hedge funds/private debt. We also blend investment styles and use a range of sophisticated tools in an effort to exploit all factors of return. Due to the sophisticated level of investments and securities we employ, our investment teams are held to a rigorous standard of education and training and have experienced track records. The challenges in dealing with emerging markets include currency fluctuations and heightened political and economic instability. The global macroeconomic backdrop, such as recent swings in oil and commodity prices adds additional layers of complexity. In addition, there are risks associated with liquidity as well as the lack of robust legal, political and business frameworks to support capital markets. In order to overcome the challenges of dealing with emerging markets we utilise a comprehensive top-down approach to assess the broader macroeconomic environment to help us navigate the issues mentioned above. As part of this process we formed the Asset Allocation Committee (‘AAC’) in 2009. The AAC is made up of the leaders from each integral part of our investment team, pooling our best ideas and innovations. Also as part of this process, we meet with policy makers and governments to help us determine our views on countries’ sovereign debt markets. Within corporate debt we also conduct a bottom-up analysis of each company in which we invest and crucially we do not invest in corporates in countries in which we are not comfortable. The factors that distinguish BlueBay from its competitors include our deep industry experience in emerging markets, which goes back to our inception; one of the reasons BlueBay was founded in 2002 was to capitalise on strong growth trends in global emerging debt markets. We have been investing in emerging market debt since 2002 and in local currency debt since 2005. We became a wholly-owned subsidiary of Royal Bank of Canada in 2010 with full investment autonomy and substantial operational independence. We believe we are next generation fixed income specialists. For us, that means working together across teams and specialisms. Where we see an opportunity for our clients it is about blending different skills and investment tools with the aim of generating higher returns. We have a history of approaching
investments this way and innovating to meet client needs. In an increasingly uncertain world we believe this to be more important than ever. We follow a rigorous investment process, driven by high-quality proprietary research emphasising capital preservation and fundamental credit analysis, while operating within a practical risk management framework. We do not own securities where we have credit quality concerns, regardless of market positioning. Additionally we put liquidity at the heart of all our investment decisions and assess each market based on underlying liquidity. The emerging market team comprises 34 investment professionals comprising portfolio managers, analysts and economists, all of who are London-based and with an average investment experience of 14 years. This team-based approach results in collaborative best ideas from a team that has a long tenure in investing in emerging market debt. Furthermore, we are innovative and collaborative in product development. Within the emerging market corporate debt market, we worked with JP Morgan to develop the Corporate Emerging Markets Bond Index (CEMBI) and were one of the first to launch a dedicated emerging market corporate strategy, an asset class which remains underinvested despite being circa $1.7 trillion. Additionally, we worked alongside Bank of America Merrill Lynch to develop its EM Non-Sovereign Indices and we were one of the first to launch an EM corporate local currency strategy. Within the sovereign space we were among the first managers to separately analyse FX and rates in local markets and were one of the first to set up a combined hard and local currency strategy managed against a blended benchmark. When working in emerging markets, we focus on both sovereign and corporate debt. Within our sovereign debt strategy, we have dedicated EM-focused long-only and alternative strategies. Our EM total AUM is circa $16 billion of assets under management (as at 31 March 2015). The team have established relationships with issuers and counterparties across the EM universe. BlueBay’s alternative emerging markets sovereign debt strategies look to capitalize on potential mispricings and inefficiencies that may arise across the emerging market universe including in the areas of local currency, hard currency and corporates. Through our proprietary, bottom-up research, we develop forecasts for sovereign credit spreads, interest rates and currencies. Taking into consideration how these forecasts interact, we develop a broader proprietary picture of the potential outcomes across the asset class. In the area of Emerging Market Corporate Debt, we have been investing in this area since our inception. In 2008, the firm was an early-mover in being one of the first to adopt a
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dedicated emerging market corporate strategy. In 2011, we viewed mispricings and volatility within the sub-asset class which prompted us to focus more in this area. In our view, emerging market corporate debt presents a potentially attractive opportunity for some investors by offering access to potentially higher yields and wider spreads than their developed market peers, yet we believe they can operate with lower leverage and simpler capital structures. The emerging market corporate universe is large, heterogeneous and we have observed it to be well diversified with the majority of credits rated investment grade. In addition, by investing in EM corporate debt investors may have exposure to 60 economies, some of which are experiencing higher secular rates of growth than developed markets. Emerging market (EM) corporate debt has been one of the fastest-growing asset classes over the past decade. Indeed, with a total debt stock of over $1.6 trillion in EM hard currency corporate debt alone (not to mention another approx. $4 trillion in local currency-denominated EM corporate debt), the EM corporate debt asset class is now larger than both the US and European high yield markets, as well as the EM sovereign market. Moving further into 2015 and beyond, there are a number of themes that we believe may factor into the performance of EM assets. These include uncertainty regarding the pace and timing of the first Fed rate hike, continued US dollar strength and geopolitical uncertainties, including those between Russia and Ukraine that could reverse the technical rally in Russian assets and commodity price weakness. From an institutional investor perspective, we believe there will likely be continued product innovation. A blended EM strategy may be more reflective of the changing composition of the overall asset class. Ten years ago, the term “EM blended� was defined as a combination of EM hard currency and local currency sovereign debt. Over the last five years, there has been continued growth in the EM corporate debt asset class. We have observed EM investors corporate allocation, in addition to EM sovereign debt. We believe that in the future both varieties of sovereign and corporate debt will define EM blended. Different global macroeconomic environments impact different areas of EM in varying ways and will require the skill and flexibility of a knowledgeable manager in order to be effective in this space.
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Best Liquidity Management Team - USA
RBC-GAM US Name: John Donohue, Managing Director, Head of Liquidity Management Email: john.donohue@rbc.com Web Address: www.rbcgam.com Address: 225 Franklin Street, Suite 2700, Boston, MA 02110 Telephone: 617.722.4728 Name: Matthew Appelstein Email: matthew.appelstein@rbc.com Web Address: www.rbcgam.com Address: 225 Franklin Street, Suite 2700, Boston, MA 02110 Telephone: 617.722.4711
RBC Global Asset Management (U.S.) Inc. (“RBC GAM-US”) liquidity business is comprised of career liquidity managers with an exclusive focus on capital preservation strategies. The team is led by co-heads of fixed income Brandon Swensen and Brian Svendahl. Both have deep experience across multiple market cycles within the Global Cash markets. We spoke to the company about their views on alternative investments, and how they are driven by a ‘client first’ culture.
www.wealthandfinance-intl.com
RBC GAM offers a full range of liquidity solutions for corporations, foundations, endowments, pensions, hedge funds, sovereign wealth funds and other institutions. RBC GAM1 is part of a leading provider of financial services, Royal Bank of Canada (RBC). Operating since 1869, RBC is one of the top 15 largest banks in the world and fifth largest in North America, as measured by market capitalization.1 With a strong capital base and consistent financial performance, RBC is among a small group of highly rated global banks. RBC GAM operates as a global firm and leverages the talent and investment capabilities across the organization to offer relevant solutions for clients. RBC GAM seeks to differentiate itself from other firms by unmatched client service and breadth of high performance investment capabilities. We are guided by principles that place our clients’ interests first. As we further develop our cash management offering to alternative investors we are actively listening to their unique set of needs. In the alternative market, cash is not supposed to be a driver of investment returns but rather a modest enhancer. During the crisis of 2008 it became all too frequent that cash and collateral management presented material problems that hurt the end product. After the crisis many entities simply invested in Treasury bills, or bank sweep accounts. Today, clients have a renewed appreciation for separate accounts that are not bound by their prime brokers operation or balance sheet. Equally important, alternative investors have been paying a significant opportunity cost for liquidity they do not need. In turn, we find that a portfolio with stringent guidelines consisting of collateral eligible securities, which is one of our core strengths, will add incremental return in a safe and liquid fashion. Over the last twelve months we have gained clients with a diverse set of investment objectives, many of which have never had a separate account portfolio before. Our ability to work closely with them on building investment guidelines that suit their needs and ultimately gain investment committee approval is a rewarding experience. Since RBC GAM does not have a large Institutional Prime fund we are not facing material business or investment pressures that our peers may be. Due to regulatory reform, change in investor needs and the shortening of issuance in terms of maturity, we believe that the confluence of these dynamics has made it difficult to find value in the short maturity <60 day maturity range. Our clients are in a favorable position as they maintain the flexibility to avoid being a price taker in the market. Our very short maturity investment needs are limited. As such we add value to our clients as we can be selective and focus on supply/demand dynamics that are in our favor. As clients seek alternatives in cash management they still maintain the three primary objectives: preservation of capital, maintenance of liquidity and attractive current income. Now in addition to these objectives they face an additional
layer of complexity, investment guidelines, risk tolerance, manager evaluations and performance. Many are embracing this market upheaval as an opportunity to move forward and be a strategic cash investor. The primary metrics we have seen that clients and prospects focus on are: • Experience and continuity of the investment team • Consistency of the process and performance • Customization and flexibility As described above, customization is a recurring theme. Clients seek a manager willing to customize a solution to fit their needs, not only at the onset of portfolio creation but must maintain the flexibility as circumstances change. We work with them to develop an in-depth understanding of their business and objectives, and then determine how to most effectively provide value and help them achieve their goals. Achieving goals for our clients is something we strive to deliver. Our liquidity team has consistently demonstrated its ability to provide institutions with customized solutions delivering solid risk adjusted returns across a variety of short term portfolios. The team maintains an unwavering commitment to credit and risk management in order to preserve capital. This commitment is emphasized with our ability to customize actively managed portfolios with finely-detailed client risk profiles. Our emphasis on proprietary fundamental research and quantitative risk management, coupled with a disciplined investment process enables us to deliver consistent and secure returns for our clients. We maintain long standing relationships with our clients and believe that we must maintain a profound and fundamental commitment to their long-term success. RBC GAM’s business is built on the firm’s collaborative culture which emphasizes integrity, customization and high touch customer service. Cash management is best served as a solution rather than a product. Our firm’s success is driven by a ‘client first’ culture. This is not a new approach for the business but rather the foundation as we strive to work closely with clients to exceed their expectations. We believe that we should be viewed as an extension of our clients’ staff; we are here to help them achieve their investment goals. In cash management it is not a one size fits all approach that benefits clients. This approach has enabled us to excel in the prolonged zero rate environments. Each and every day we strive to create value for our clients. We pride ourselves on our ability to meet and overcome complex challenges. We combine the discipline of clearly defined investment process with the power of customization and innovation so our clients can exceed their goals. Our clients expect the highest level for responsiveness and controlled creativity that mitigates investment risk. Thankfully, we maintain high marks on all fronts.
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In terms of investment process and philosophy, we have remained consistent through both the financial crisis and interest rate cycles. We have remained true to the process and philosophy of high quality investments, preserving liquidity and maintaining yields. Our clients seek consistent and safe returns. As such we avoid the more speculative ways of seeking returns via wide duration swings or increasing credit or concentration risks. This diversified and high quality approach enabled us to navigate the financial crisis incredibly well. Contrary to many of our competitors who are faced with potential disintermediation from their large fund complexes and reducing staff, RBC GAM-US is expanding. This expansion is reflected by the addition of John C. Donohue as Managing Director and Head of Liquidity Management. John is responsible for Sales, Distribution and Product Development of our liquidity platform. Ultimately, we believe John’s addition is a key differentiating feature to our firm due to his previous experience as a Global Cash Chief Investment Officer and proven ability to build an industry leading Global Liquidity practice. Another factor in our expansion is that RBC GAM has a distinct competitive advantage by being a key business of the Royal Bank of Canada. Our parent company is the 5th ranked bank in North America and 14th in the world.3 The operational discipline of our parent has created a global trust across the world. One of the key initiatives is to participate in the significant growth of our capital markets and investment banking. Clients are seeking organizations that can provide a wide array of services which go beyond asset management. RBC’s ability to have a shared client centric focus enables us to provide innovative customized solutions for our clients across the franchise. Looking toward future challenges and opportunities, the money market sector is facing a once in lifetime change or as we like to call it “the new Cash Paradigm.” In the past, Institutions treated cash as a commodity where it was difficult to distinguish between money market fund providers and other cash commingled vehicles that maintained a $1.00 net asset value (NAV). The 2008 crisis fundamentally and permanently changed the short term market. The primary change from pending regulatory actions is money market reform that will transform Institutional Prime funds from a Stable NAV to a Variable NAV. The market is also impacted by supply dynamics as Basel III and other banking legislation have required entities to mitigate their reliance on short term funding. This further strains the front end of the market. Furthermore, Institutional Prime funds were previously insulated by amortized cost accounting. With amortized cost, a fund would purchase a money market instrument and use a daily accrual to value that instrument such that it reached par at maturity. A fund could use this value as long as the result did not deviate materially from the estimated market value. Ultimately, any value between $0.995 and $1.005
would be valued at $1.00. The new amendments limit the use of amortized cost to securities with remaining maturities of 60 days or less and require a fund to be priced to four decimal places. Additionally, money market funds will have to maintain weekly liquidity equal to at least 30% of the portfolio value. Under the regulations if a fund liquidity threshold is breached the fund’s Board of Directors may impose a 2% liquidity fee. For example, a typical $200,000,000 investor would face a $4 million penalty if fees were imposed. To put this in context current money market yields are approximately 0.10 or $200,000 annually. In total, when these rules take effect in October 2016, the operational efficiency and portfolio safety that was once the hallmark of Institutional Money Market funds will be placed into question. As Variable NAV funds move forward we feel that investors will no longer want to face interest rate, credit and shareholder concentration risks among a commingled pool. A separate account alternative will allow investors to control their own destiny. RBC GAM is in an opportunistic position to work with clients as they prepare for this dynamic change in cash management. Generally speaking, the tranquil world of cash management is on the precipice of change. The combination of rising interest rates, money market reform and material changes across the short term landscape, means cash investors require a manager focused on customized cash management solutions, rather than those beholden to commingled Prime Money Market funds. Those days are rapidly coming to an end. When working in a constantly evolving and highly competitive market, it is important to be acknowledged for our success. With a constrained cash management environment coupled with zero rate fatigue it is hard to differentiate yourself from your peers. Receiving this recognition is an honour for our firm, investment team and for our clients. In addition, we believe it is important to provide best in class service throughout the client experience. Client service via a dedicated Institutional Portfolio Manager, Operations, Legal, Compliance and Performance are key differentiating factors that can’t go without mention. RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC) which includes RBC Global Asset Management (U.S.) Inc., BlueBay Asset Management LLP, BlueBay Asset Management USA LLC, RBC Alternative Asset Management Inc., and RBC Global Asset Management Inc., which are separate, but affiliated corporate entities. 2 Ratings: S&P: AA-, Moody’s: Aa3 (Bloomberg, 3.31.15). 3 Bloomberg, 3.31.15 1
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Best in Emerging Markets
AppleTree Capital Company: AppleTree Capital Names: Michael Nicoletos - Dimitris Apistoulas Email : info@appletree-capital.com Website: www.appletree-capital.com Offices: In Georgetown and Athens
AppleTree Capital is an awarded independent financial advisor, specializing in Emerging Markets and Absolute Return strategies. The firmâ&#x20AC;&#x2122;s mission is to deliver exceptional value to investors, by strictly adhering to its philosophy of Transparency, Liquidity and Risk Management. This is ensured by the valued services of our top notch business partners as well as the liquid and transparent structure of AppleTreeâ&#x20AC;&#x2122;s fund which offers monthly liquidity and excellent transparency to investors. We spoke to them about their company and their views on the alternative investments industry.
www.wealthandfinance-intl.com
Milan Gonda / Shutterstock.com The company focuses on Emerging Europe, a niche part of the Emerging Markets world, which is often overlooked by the traditional Emerging Markets funds. AppleTreeâ&#x20AC;&#x2122;s flagship, the Violet Emerging Markets Fund, is a long/short equities Emerging Europe fund with monthly liquidity and superior transparency for investors. In 2013, the Violet yielded a +28.9% net return in USD terms. The outperformance continued in 2014 (+9.7%) while so far in 2015, YTD, Violet is up a net +4%. Moreover, since May 2015, we have expanded out product offering with the Metron Absolute Return Fund, a Long/ Short Equities Bonds (Developed Markets) fund which aims at low volatility returns across the market cycle. Our Vision is straightforward: To become a leading investment advisor covering Emerging Europe and Greece, where the team has a competitive edge: long standing relationships and excellent access to companies, investment flows, decision makers and market participants. Clients are partners and their interests are perfectly aligned with AppleTree Capital. This is a common line in our industry, but we believe that few companies truly adhere to this simple but extremely important rule. We believe in communication, transparency and in addressing any requests that clients might have. We are not only the asset managers but their eyes and ears in every aspect of markets and economic activity, assisting them with our experience in a region (Emerging Europe) that we know well. We have built trust which is the pillar of any long standing and successful business relationship. AppleTree investors can expect the maximum in terms of transparency. - Top Five Exposures as a % of portfolio - Geographic Breakdown - Sector Breakdown - Gross and Net Exposure - Risk metrics - And most important of all, direct access with any member of AppleTree Capital. These are provided both by the AppleTree (Newsletter) as well as independently, from the Administrator. Each AppleTree investor is given a monthly key-code which provides access to portfolio statistics via the Administrators secure web portal. At the present moment in time, the Alternative Investments industry is undergoing a significant transformation. Investment flexibility (when compared to more conventional sectors like mutual funds, for example) comes at a price. Regulatory changes across the globe and the emergence of â&#x20AC;&#x153;competitiveâ&#x20AC;? investment products make the landscape challenging. Companies must ensure that they have all the checking/ monitoring mechanisms in place to reduce operational risk. Structure, risk management and transparency become more and more important. We expect Alternative Investment Managers to focus on compliance, and the attraction of new assets via differentiated strategies. We believe that the strong flow of institutional money to alternative investments will continue, especially in liquid, transparent Long/Short Equity strategies. Customers will
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be pushing for liquidity, transparency and tailor made fee arrangements. Despite the changes, we are positive on the industry. Competition is very high but this is of great benefit to investors who have a wide pallet of great products to choose from. As yields reach a historic low across geographies, we believe that the strong flow of institutional money to alternative investments will continue. Even though requirement by customers will become more demanding, AppleTree Capital has positioned itself to address these additional needs so as to accommodate its investors. Fund of Funds will continue to attract assets but investors will be looking for more niche oriented strategies. Moreover, traditional investors like pension funds may be inclined to increase their allocation to alternative investments to enhance returns and reduce downside volatility. This would provide a significant pool of liquidity for hedge funds, however the process should be relatively slow. Most assets will continue to flow to the largest managers as has been the case in the past years. For smaller managers like AppleTree to attract interest they will need to offer strong returns, high quality set ups and a niche market strategies withe high risk-adjusted returns. Our investment team’s experience in the region (Russia, CEE, Southeastern Europe, Greece and Turkey) is a valued asset and allows us to bridge the informational inefficiency/ price action gap in this part of the world via: • Long established relationships with local professionals who provide direct feed on political and financial developments • Out of the box investment idea generation through interaction with local networks in the real economy • Frequent road shows and company visits • In-house research to identify valuation mispricings • Utilizing technology to get a lead view from local feeds. Monitoring and interacting with local reliable sources via Bloomberg and Twitter. Following simultaneously local news feeds allows us to be ahead of the curve and swiftly transform news to strategy and investment positions. Our size and strategy allows us to enter into specific trades based on catalysts/fundamentals irrespective of market capitalizations and index participation. This, however, is implemented in a way that does not compromise the liquidity of the portfolio. Exposure sizes ensure that the whole portfolio can be liquidated within a maximum of three (3) trading days. Information from the ground generates ideas and allows us to enter into thematic trades with attractive risk/return characteristics, beating benchmark returns. Moreover, we are truly a hedge fund, in the sense that we use extensive protection at times of turmoil. We are flexible and have the capacity to change the portfolio’s net position from long to short swiftly according to our conviction. These processes are what really made the difference for us this year and distinguished our performance from the competition. The Violet Fund clocked a 9.69% net return in USD during 2014 vs a -17.55% drop of its benchmark, the MSCI EMEA.
This was mainly a result of the timely and decisive changes made in the portfolio long/short exposure in May 2014. The Violet had started the year with a net long exposure of 60% but as the markets rallied it was reduced drastically. In July 2014 the net exposure of the portfolio stood at -15% (net short) and was kept at very low levels throughout the following 3 months. This protected the portfolio from the significant drop in equity markets during the months of August and September. The Violet outperformed significantly in the months of extreme market volatility (January, September and December) posting positive returns during the market meltdowns. This exhibited the effective hedging policies in place and the results of the active management of portfolio exposures from net long to net short, leading to an outperformance of more than 25% vs. the fund’s benchmark index. We, at AppleTree Capital are very happy to repeat our success for 2015 after being honored with the Best Emerging Markets award last year. Our strong 2014 performance and the award give us strength to continue. Both achievements confirm that focus, persistence an patience are awarded. We are a small team at AppleTree but we all share the same mentalité: Consistent hard work and a perfect alignment of interests with our investors. Our success so far is attributed to the trust of our investors and the hard work of everybody at AppleTree Capital. For 2015 we believe, even though risks persist, that the region will continue to give interesting opportunities. AppleTree Capital has a first mover’s advantage, multi-year expertise and through its fund it provides an easy, liquid and transparent way to do so. We feel its time to put our hardearned goodwill at work and do our best to couple it with a strong 2015 performance to match.
Dimitris Apistoulas and Michael Nicoletos Dimitris Apistoulas and Michael Nicoletos are the Managing Directors of AppleTree Capital, an alternative investments advisor specializing in Emerging Markets. They have a combined experience of more than 20 years in financial markets and they have been working together for the past 9 years. Dimitris and Michael are the acting Portfolio Managers of the Violet Emerging Markets Fund, a Long / Short Emerging Markets Equities strategy, launched by AppleTree Capital in May 2010. The fund’s objective is to achieve returns in Emerging Europe (Russia, CEE, Southeastern Europe, Greece and Turkey), a region with high economic growth potential. This is an area with a population in excess of 400m and with a Market Cap/GDP that stands as low as 20%. Within 2014, the Violet Emerging Markets Fund yielded a net return of 9.69% in US$ terms, outperforming its benchmark by a wide 25% (MSCI EMEA)
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Best Global Due Diligence Firm – 2015
Company: Castle Hall Alternatives Name: Christopher Addy Email: info@castlehallalternatives.com Web Address: castlehallalternatives.com Address: 1850 Panama, Suite 415 Brossard, QC Canada J4W 3C6 Telephone: +1-450-465-8880
Castle Hall Alternatives, a member of AIMA, is an award-winning Operational Due Diligence (ODD) firm helping global institutional investors, fund of funds, advisors, family offices and endowments identify and manage the business and operational risk of asset managers. With nearly 40 professionals dedicated exclusively to operational due diligence, Castle Hall deploys one of the industry’s largest and most experienced due diligence teams. We spoke to them to find out more.
www.wealthandfinance-intl.com
The investment and diversification merits of alternative investments for investors with long time horizons and significant pools of capital are well documented. The opportunities to seek superior return potential and/or reduced risk, volatility and correlation across an investment portfolio are coveted by institutional and private investors. Some of the challenges in allocating to alternatives include: • Finding and gaining access to top managers • Having the time and ability to understand the operating and investment structures and risks • Having the time and ability to monitor changes in the strategies and managers With ongoing and increasing demand for such strategies, and in light of the various risks associated with investing in this space, comprehensive operational due diligence and ongoing monitoring are a necessity. Castle Hall’s diligence services are driven by our next generation, online diligence architecture, OpsDiligence. With the recent launch of our OpsMonitor module, Castle Hall is working to take ODD beyond traditional, “snapshot” due diligence. OpsMonitor offers investors a modular, systematized and real time risk management platform: we call this Due Diligence 3.0. It is generally believed that the following aspects must be aligned in order to ensure that a manager and investment represent a proper fit for an investor: • The investment thesis and historic performance meet the investor’s objectives, risk tolerance, time horizon, and liquidity needs • The client understands the core competencies of, or believes in the abilities of, the investment team to fulfil the investment thesis moving forward • The investment team and operational staff and service providers must be high quality people or firms • The manager must display a sound operational setup and processes and have a commitment to client service excellence Evaluating each of these aspects is the challenge of every investor and Castle Hall Alternatives is pleased to support investors in the evaluation and monitoring of operational risks. Castle Hall’s OpsDiligence and OpsMonitor services provide investors with the means to overcome many of these obstacles. Recognizing that the ability to identify and monitor risk is paramount for our busy clients, we continue to focus on the importance of strengthening and simplifying the client’s ability to identify and monitor operational risks in their portfolio. Evolving our unique online Dashboard and expanding the suite of information available to our clients has been a tremendous undertaking for our firm. Each of these developments is designed to improve the scope, simplicity and quality of our services to our clients. OpsDiligence, our proprietary ODD system, is driven by industry leading technology. In conjunction with our OpsMonitoring service, Castle Hall Alternatives provides a truly modular structure which allows a flexible, risk-based approach to due diligence and ongoing monitoring. As we continually work to streamline, expand and strengthen our service offerings we are pleased to have recently launched a range of powerful new monitoring functions to OpsDiligence, our online diligence system. OpsMonitor service begins with daily media monitoring. Castle Hall’s team carefully curates news feeds to remove the false positives and duplicates that clog standard internet searches. Media alerts are then delivered automatically to each member of an investor’s portfolio, risk, compliance, and diligence teams. On a quarterly basis, Castle Hall uses proprietary questionnaires to update key manager and fund data points and identify operational and business changes across every third party investment. The results of the monitoring process are
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delivered via update Alerts at the individual fund level and through dashboards showing status across the entire portfolio. Investors can instantly see if their funds are “in the green”, or if yellow or red flags have been identified during the most recent quarterly monitoring process. On an annual basis, investors may receive large numbers of audited financial statements issued by the funds in their portfolios. Reviewing those financial statements is, however, a time consuming and challenging task. OpsMonitor now offers investors interactive dashboards to identify potential financial reporting risks. Dashboards highlight OpsMonitor Alerts across 10 categories, including identity of the auditor, whether the audit is qualified and issued on a timely basis, and whether the fund and underlying master fund has a high expense ratio, high leverage, or high allocations too hard to value, level 3 assets. This enhancement allows our clients to build more comprehensive risk management processes into their alternative investment programs, thereby increasing overall investor confidence and comfort. The founding members of Castle Hall Alternatives, Christopher Addy and Anne Coady, have industry leading levels of experience and are among the first operational due diligence professionals in the world. In addition, we have added seasoned industry professionals with deep regional experience in Europe and Asia in Christian Nauer (Switzerland) and Alex Wise (Australia) respectively. There is truly no replacement for direct local market knowledge and the many lessons learned through years of in-depth experience in the field of operational due diligence. In addition, Castle Hall Alternatives has one of the largest due diligence teams worldwide. Our highly experienced team is committed to providing more coverage across all asset classes and more flexibility to assess and monitor operational risks for candidates and managers in our client’s portfolios. In addition we remain unconflicted in our service as we work only for allocators, not managers, and equally avoid the conflicts that arise when operational diligence is combined with investment advice. We are pleased with the growth of our business and the success of our clients. Castle Hall Alternatives is also moving towards its 10-year anniversary, which will be a significant milestone for our firm. Castle Hall Alternatives is once again delighted and privileged to receive this award and recognition. It is an honour to earn the trust placed in us by our clients. It is our vision to create the best diligence and risk management platform possible for the benefit of our clients. We are inspired by the ever-evolving industry, our clients and the passion and commitment our team has to fulfil our vision. These are the keys to our success. Being recognized within our industry with awards such as this are hugely valuable for internal validation of our efforts, reinforcement of the faith placed in Castle Hall Alternatives by our clients and helping to raise awareness within the industry. Each of these fuel continued growth for the recipients, for their peer group and may increase the confidence of the investing public through independent validation of the quality of services offered. Looking to the future, the firm is growing quickly, adding key people and capacity as we expand our services and partnerships to offer ever greater flexibility and service to our clients. Included in these plans is a redesign of our online OpsDiligence portal, cataloguing of historic investment failures for use by our clients and expanding funds covered across all sectors and global regions.
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Award for Excellence in Managed Data Services - UK
RIMES Company: RIMES Name: Alessandro Ferrari Email: marketing@rimes.com Web Address: www.rimes.com Address: 1 Cornhill, London EC3V 3ND
RIMES focuses on meeting the specialist data needs of both asset managers and asset owners. As a pioneer provider of cloud-based managed data services, it delivers highly customized financial data over the internet. We found out moreâ&#x20AC;Ś
www.wealthandfinance-intl.com
RIMES provides a customized, scalable, cost-efficient and fully managed data service. Delivery via the cloud removes all of the typical problems associated with in-house data management – when keeping pace with increasing data requirements presents an unsustainable challenge. Over the past 12 months, RIMES believes that retaining and growing its 250+ customers across 40+ countries has been one of its greatest accomplishments. The firm is absolutely delighted to have won this accolade, which is one of three awarded to the company during the first quarter of 2015 alone. Data management Users of the RIMES Managed Data Service are better able to address key buy-side data management challenges. Benefits include enhanced service levels; higher quality (and pre-digested) feeds for all of the disparate business functions who need to consume data; and needs-based management of TCO (Total Cost of Ownership). Complete and reliable data management provides the business intelligence required to implement effective data governance processes and procedures. By outsourcing all data management aspects to RIMES, customers can improve not only the quality and delivery of their data, but also reduce the unseen costs and operational risks associated with in-house data management. Data governance improving data governance is one of the biggest current challenges facing the industry. Most buy-side firms have invested heavily in effective data processing, but successful data management also requires strong data governance, and many firms are struggling to find the resources or expertise to implement the right measures. There are now more compelling reasons than ever before to improve governance: • Regulators worldwide have an increasing interest in data provenance and use • Firms must manage an increasing volume of data, with a diverse number of complex uses and from a growing number of originators • Commercial pressures demand cost reductions and increased efficiency. Data Coverage Firms seeking a buy-side data management solution are also looking for the most comprehensive, timely and up-todate financial data. The 800+ data sources provided by RIMES are constantly validated and remediated by a team of data experts, to the highest professional standards. The award-winning RIMES Benchmark Data Service®, RIMES Reference Data Service and RIMES Data Governance Data Service simplify in-house data management so end-users can concentrate on their core business. New data sources often come on stream, for example RIMES’ latest alternative asset data comes from ANREV Indices; INREV Indices; Investment Property Databank; National Council of Real Estate Investment Fiduciaries Indices; and Thomson Reuters/GPR Real Estate Indices. In total, RIMES now offers 18 real estate–focused data sources, from 11 different data partners; and four private equity-focused sources, from Cambridge Associates, LPX, PREQIN and S&P Dow Jones Indices.
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Best Tactical ETF Portfolio Manager - USA
AthenaInvest Name: Professor C. Thomas Howard PhD Company: AthenaInvest Email: support@athenainvest.com Address: 5340 South Quebec Street, Suite 365-N Greenwood Village, CO 80111 Telephone: (877) 430-5675 Fax: (303) 721-6294
AthenaInvest is the industry leader in Behavioral Portfolio Management with a patented research process built on a deep academic foundation. Led by C. Thomas Howard, PhD, CEO and Director of Research, the firmâ&#x20AC;&#x2122;s unique investment approach stems from proprietary research developed over 35 years of interaction with leading academics and Institutional managers. We spoke to them about their company and how human behavioral factors influence their business strategy.
www.wealthandfinance-intl.com
AthenaInvest’s innovative investment research process, Behavioral Portfolio Management, can systematically identify and analyze measurable and persistent behavioral factors to build investment products and solutions. This approach has proven very effective with the Athena Global Tactical ETFs Portfolio, which was the number one Managed ETF Portfolio for three-year performance ending 12/31/14, according to Morningstar and received International Wealth & Finance recognition as “Best Tactical ETF Portfolio Manager – USA.” C. Thomas Howard, PhD oversees Athena’s ongoing research which has led to several patents. Dr. Howard’s thought leadership in the Behavioral Portfolio Management arena has also generated significant interest with the publication of his book Behavioral Portfolio Management and his recent presentations at the national conferences of Investment Management Consultants Association® (IMCA®) and Chartered Financial Analyst (CFA). He has published dozens of articles for leading academic and industry publications and has been featured in articles from Forbes, Financial Times, MarketWatch, and Investment & Pensions Europe, among others. “The popular notion in the marketplace is that people are rational and markets are efficient,” Dr. Howard says, “but in reality, there is an overwhelming presence of emotions involved in investment decisions which creates inefficiencies in the marketplace. Those inefficiencies, when systemically analyzed, can generate terrific opportunities for superior investment selection and portfolio performance.” To harness these behavioral inefficiencies, Dr. Howard estimates expected returns in various global equity markets using measures of deep behavioral currents. The Athena Global Tactical ETFs Portfolio uses the strength of the expected market returns to allocate among U.S. large-cap equities, U.S. small-cap equities, international developed equities and cash. In high expected return environments, the portfolio can leverage its equity exposure to 200% but can also go to 100% cash when expected returns are low. This unique combination takes advantage of both market rotation and market exposure opportunities. Dr. Howard is a firm believer in the power of the equity markets for long-term capital growth. “A big opportunity for long-term performance is being in the right market at the right time along with knowing when and how to use leverage,” comments Howard, “and our Market Barometers have been very effective in identifying the strength of the various markets.” Athena’s Behavioral Portfolio Management process is informed by its proprietary database which contains extensive fund and stock data dating back as far as 1980. The survivor-bias free database of managers, holdings and securities allows Dr. Howard to conduct a wide range of investment research on behavioral factors using large datasets over long time horizons. The Athena Global Tactical ETFs Portfolio is one of several strategies managed by AthenaInvest including concentrated equity, high-dividend equity and global tactical equity strategies. For the other Athena portfolios, the investment process is aimed at superior stock selection. Industry players are also recognizing the potential of Behavioral Portfolio Management. AdvisorShares, Princeton Fund Advisors and ICON Advisers have partnered with AthenaInvest to offer an actively managed ETF, a mutual fund and fund strategist portfolios, all using Athena’s patented behavioral research. When asked about what’s next for Athena, Dr. Howard acknowledges that they have only scratched the surface with the use of behavioral factors. He adds that they will continue to work with industry and academic leaders to identify more ways to build portfolios that help investors achieve their investment goals. “When you make the transition to a behavioral perspective, unique investment opportunities become readily available,” says Howard. “We are very pleased that the Athena Global Tactical ETFs Portfolio is getting recognition and increasing awareness and confidence in behavioral investing.” We look forward to watching the evolution of AthenaInvest and their unique investment approach.
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Award for Excellence in Fund Management - UK
Exception Capital Company: Exception Capital Name: Adrian Fairbourn Email: adrian@exceptioncapital.com Web Address: www.exceptioncapital.com Telephone: 310 990 1439
www.wealthandfinance-intl.com
Tell us about Exception Capital, your clients and the services you offer. Are there any specific alternative investments that you specialise in? Exception Capital is a boutique investment firm based in London and Los Angeles. The firm manages The Family Fund, a unique global multi-strategy portfolio that is designed to mimic the asset allocation of a classic Family Office. As such the fund invests globally in public equities, private securities, direct lending structures as well as external managers. Diversified by geography, asset class and positions it has, since inception in Q3 2012, outperformed all benchmarks and indices but with lower volatilities and negative correlations. How does working in alternative investments differ from the more conventional sectors? Are there any specific things you need to take into consideration and how much more difficult is it to keep your finger on the pulse? The founder of Exception Capital, Adrian Fairbourn, has lived and worked around the world his entire career. The bringing together of those experiences and networks and of being based in London, Shanghai, Hong Kong, New York and Los Angeles have all come to bear on The Family Fund portfolio. That is a significant driver of idea generation and of performance. It is exactly the freedoms afforded by working in the alternative , as opposed to long-only sector, that allows us to perform. What specific challenges/opportunities do alternative investments present, both to your business and your clients? It is the opportunities that provide the challenge. When you have a global universe as your opportunity set it is important to develop the skill to rapidly cut the wheat from the chaff. Developing networks, finding and researching opportunities and realising the value in those opportunities is what drives us. A challenge? Maybe but one that we thrive on. What major successes can you point to over the past 12 months that have seen your business stand out among your peers? This business is a performance business and the risk-adjusted returns are how we are all measured against our peers and, where applicable, benchmarks. Exception stands out on all those measures but what has been most satisfying has been our ability to consistently generate returns for our clients from multiple sources. In Q4 last year it was adding to oversold positions in the downturn that got us through a tough October; last summer we took one of our private positions public on the London market; this year our basket of Argentinian ADR’s has produced excellent returns, as have our UK smaller company names and external managers. The generation of strong returns from multiple sources, we believe, has been our main differentiation. What plans does your business have in place to ensure it remains at the forefront of the alternative investment sector for the coming year? Quite honestly more of the same. We have proven over a number of years that our repeatable process works and we will stick with that. The year ahead means more hard work finding and working on opportunities and turning those opportunities into hard performance numbers. What was your reaction to winning this award and to what do you most owe this success? Any award is a privilege and recognition of your skill set is always welcome. We owe our success to our methodology, our
people and the clients who have backed us. How important do you believe awards like this to be, both to individual businesses like Exception Capital and to your wider industry? As a small business anything that can increase your brand awareness in the marketplace and with clients can only be a good thing. For Exception, it is a vindication of our work. For our clients, it is recognition that they backed the right people and for those who are yet to become clients, it is further proof that they should sign the sub docs! What areas have you focused on and what challenges have you overcome to win this award? It is too grand to say we have created a new asset class but the asset allocation we have adopted has never before been wrapped in a fund structure. The Family Fund is truly unique. One of the things that has struck us in this process is how wary people are of anything new and to a degree we understand that. All we can do is keep doing what we do, do it well and prove to people that it works. We know it does but the challenge is to get that message across to other people. Tell us about Exception Capital’s overriding philosophy when it comes to your clients. Two words that are in our Mission Statement: Integrity and Trust. That pervades everything we do. All else falls into place behind that. What should clients be looking for when seeking an asset management company and how does Exception Capital go about meeting these requirements? This is an impossible question to answer as every client looks for something different, be it a big-brand house or a small entrepreneurial boutique. We do believe, however, that whatever the case those companies that fill client portfolios with their own internal product, churn portfolios and look for as large a ‘share of wallet’ as they can should be avoided. They are everything we are not. In terms of alternative investments, what have been the most prevalent trends in your industry over the past 12 months and what have you done to ensure that you are always at the forefront of any new developments? We don’t really follow the industry trends but really concentrate on our own strategy. With the uniqueness of The Family Fund we are setting our own developmental path. Without wanting to be too negative the trend towards Liquid Alts fad really smells like structured notes circa 2005. They are an asset gathering mechanism for firms and the whole term liquid alts, for many strategies, is an oxymoron in itself. Secondly, the trend of larger funds getting larger is, at some point, going to end badly (again). Part of this is down to the weight of money needing to find a home but there is also a degree of career preservation by allocators and that part of it is really sad for our business. What developments or changes do you see having the biggest impact on your business and industry over the coming year and where do you think the biggest opportunities – and challenges – lie? It’s all market related. If there is a sharp market downturn we will see some damage for investors for the reasons alluded to above but that correction will also create a lot of opportunity for those funds who can take advantage. They are the ones who will collect outsized returns on the next upswing. Therein lies the opportunity and the challenge.
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Best Capital Markets Software Provider
Company: Fenergo Name: Fiona McLoughlin Email: fiona.mcloughlin@fenergo.com Web Address: www.fenergo.com Address: Headquartered in Ormond House, Ormond Quay, Dublin 7, Ireland Telephone: +353 1 901 3600
With continued calls for increased regulatory scrutiny on investment funds, the buy-side is beginning to bear the full weight of compliance burdens. Fenergo outlines the reasons for adopting a client lifecycle management approach to regulatory compliance, data management and client / fund onboarding. We spoke to them to find out more. www.wealthandfinance-intl.com
What are the key challenges facing the industry? There are three main challenges facing all financial services firms – across both buy-side and sell-side sectors: unprecedented regulatory change, data management and the impacts of both of these on underlying business processes. Each challenge has a direct impact on subsequent ones. For example: Over the last few years, we’ve seen regulatory compliance obligations multiplying at a phenomenal pace. This includes the introduction of new regulations (such as Dodd-Frank in the US, EMIR (European Markets Infrastructure Regulation), MiFID (Markets in Financial Instruments Directive) II, Basel III and Solvency II in Europe and FATCA, as well as enhancements to existing regulations (e.g. Know Your Customer changes proposed by FinCEN and 4th EU Money Laundering Directive). Each of these regulations drive the need for additional data and documentation for evidencing of compliance with stated regulations. The longer it takes to collect and process this data and documentation, the longer it takes to achieve compliance, therefore, the more time required to onboard new clients / funds or simply to trade. This has serious implications on firms’ time to revenue capabilities.
sifications and risk assessments that pertain to the client, reducing the need to rely on regulatory interpretation. It also identifies all of the client and counterparty data required to be collected to evidence the compliance obligations. Consolidated Data & Documentation Management Together with the Client & Counterparty Data Management module, the regulatory rules engine can determine if any of the data and documentation required resides in the firm’s data repositories and records this against the client / fund. This involves tagging and creating intelligent linkages between data in different repositories. The aim of this is to eliminate the number of data siloes that may exist, to make the data and documentation both useful and re-usable and to create powerful views of the client and/or counterparty. In this way, the firm can re-use potentially up to 80% of existing data to comply with new rules or onboard new products / funds, leaving only 20% to be collected from clients. Not only does this expedite the compliance and onboarding processes, it also has the added benefit of improving client experience. This process in itself can speed up time to revenue and onboarding by up to 30%.
Data management is a particularly thorny subject for most financial firms, especially those with an over-dependency on spreadsheets. Data quality and governance are two of the biggest culprits related to non-compliance in this area. Lack of version control, the necessity to rekey unstructured data and the prevalence of data siloes make this process prone to errors. It’s also a missed opportunity. We estimate that up to 80% of data and documentation required for new or enhanced regulatory obligations can be sourced within the firm – if they knew where it was located.
Onboarding Workflow & Lifecycle Management By having a strong single view of all data and documentation, firms can accurately measure the size of the risk facing their firm, evidence their compliance processes and onboard new clients / funds more efficiently. And it doesn’t stop there. Ongoing due diligence is essential for continued and auditable compliance. We have recently helped a global wealth management firm to centralise their data and documentation so they can undertake more effective KYC periodic reviews to ensure their clients are appropriately risk-rated. While this process involves proactive reviews of data and documentation, it also entails the capability of event-triggered reviews, based on change of circumstance data that may trigger a compliance refresh.
So regulatory change is driving increased data and documentation demands, which are seriously impacting operational capabilities and workflow processes. The more regulations added to the mix, the less capable a firm becomes in complying, culminating in one huge regulatory headache. With such intense focus on regulatory compliance and data collection, it’s a wonder how any firm can get back to the business of managing funds or clients.
What does it mean for Fenergo to win this award? We are absolutely delighted to be recognised as a top class capital markets software solution. We work closely with the industry to ensure that their needs are clearly reflected in the capabilities of our solutions. We run regular Client Advisory Boards and industry roundtable dinners in an effort to keep our ear to the ground and to ensure that our solution roadmap is strategically aligned with those of our clients and prospects.
To avoid compliance falling through the two stools of regulatory obligations and regulatory data, firms need to manage data and compliance in tandem. How does Fenergo solve these challenges? With regulatory complexity increasing year-on-year, it is vitally important to put in place processes and technologies that can manage this process end-to-end. Our Client Lifecycle Management platform helps firms to manage the ever-increasing requirements for regulatory compliance, legal entity data and client / fund onboarding on a single platform. Regulatory Rules Logic Underpinned by a regulatory rules engine, our Regulatory Compliance module determines all of the regulations, clas-
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Excellence in Middle-Market Investment Banking – USA & Best Start-Up Direct Investment for its Capital Formation Work for Energy Distribution Partners
Jordan, Knauff & Company Company: Jordan, Knauff & Company Name: G. Cook Jordan, Jr. Email: cj@jordanknauff.com Web Address: www.jordanknauff.com Address: 200 W. Madison Street, Suite 980, Chicago, IL 60606, USA Telephone: +1 312 254 5901
Jordan, Knauff & Company (“JKC”) was founded in 2001 in Chicago, Illinois, with a clear mission: to provide professional and sophisticated investment banking services to middle-market companies and the entrepreneurs who lead them. The professionals at JKC have personal knowledge of the challenges faced by company management when undertaking a capital event and practical process experience based on the completion of over 200 successful capital events as owners, operators, investors, buyers, sellers and investment bankers. Their services include mergers and acquisitions advisory, debt and equity capital formation and strategic financial services to companies in a variety of industries. Their typical transaction sizes range from $10 million to $300 million in total consideration. We spoke to them to find out more.
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As an adjunct service to our fundamental investment banking practice, we act as a conduit for direct investments to our network of institutions, family offices and high net worth individuals, who are reducing their allocations into private equity and seeking to make direct investments through relationships such as that which they have with our firm. In many cases, this is the preferred outcome for middle-market companies that come to us to raise capital for them. We have built a reputation for developing meaningful investment opportunities in the industries in which we have specializations, including: energy logistics and distribution, flow control (pumps, valves, filtration), real estate, building products, financial services, food processing, plastic injection molding value-added manufacturing, value-added distribution and technology-enabled logistics/warehousing. This involves recognizing an emerging trend or change in the industry, confirming that trend or change with research and assembling a strategy and business plan in partnership with a highly credible management team. When we have completed the development process related to these opportunities, we take them to a network of individuals and family offices to invest along with our firm and build a significant enterprise in that particular industry. In each of these endeavours, our firm takes the initial risk by putting up seed capital to launch the development process and, thereafter, we invest pari passu with our high net worth individuals and family office partners. This year Wealth & Finance magazine awarded JKC the Excellence in Middle-Market Investment Banking in the United States award and the Start-up Direct Investment of the Year award for its debt and equity capital formation work with Energy Distribution Partners (“EDP”). EDP is an example of the type of activity for which we have become known and respected. The strategy that guided the founding of EDP is based on a fundamental investment thesis: apply the firm’s extensive knowledge in energy distribution and exploit the expansion of American hydrocarbon commodity production and its resulting distribution opportunities. EDP is a consolidator of retail propane distribution companies and energy midstream assets in selected geographic regions of the U.S. and Canada. Since its founding in April 2012, EDP has made six acquisitions in the retail and commercial / industrial propane distribution sector generating EBITDA of approximately $10 million. To start the process of building EDP, JKC invested the initialseed capital and, acting as EDP’s investment banker, raised
additional seed capital from two former clients. From that seed grew the following deal financing profile - all raised by JKC and closed sequentially, with the final closing on equity commitments in March of 2014: • Senior Debt = $18.0 million opening credit, in a combination revolver ($3.0) and acquisition term facility ($15.0). Follow-on credit facility closed in August 2014 = $65.0 million / revolver ($15.0) / acquisition term ($50.0). All from Wells Fargo Bank, the largest energy lender in the U.S. • Equipment Financing = Approximately $5.15 million in service equipment financing from Wells Fargo Equipment Finance. • Equity = $31.45 million in stage-funded equity commitments (drawn down as acquisitions are closed) from an insurance company, family offices and high net worth investors. What got EDP the capital can be expressed in two words: First: determination. Second: persistence. We believe the words of Calvin Coolidge are applicable to every investment banking engagement and are JKC’s mantra – “Persistence and determination alone are omnipotent.” The firm’s Co-founder and Managing Principal, Mr. G. Cook Jordan Jr., has over 25 years of private equity and investment banking experience, and seven years of executive and operations experience in middle-market companies. He has closed over 90 transactions as the buyer, seller, investor or investment banker and was previously a Partner at Allstate Venture Capital, the venture capital and private equity division of the investment department of Allstate Insurance Company. Mr. Jordan believes, “Each time an investment banker signs an Engagement Agreement, he is gambling on his intellect, his energy, his determination, his knowledge and his experience, and putting them to work for his client. For JKC, the EDP engagement was a gamble of all those, redoubled by a wager of our capital, in confidence that we could deliver a successful outcome for our client.” In summary, JKC delivers the following value to our clients: • Unmatchable experience, knowledge and understanding of private company transactions; • Identity in the capital markets as a highly reputable representative of credible middle-market businesses; • Extensive network of relationships in all segments of the capital markets; and • Accelerated time to a Successful Outcome – our strategy is developed with execution in mind.
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Best Africa Focused Investment Manager
Mediterrania Capital Partners Company: Mediterrania Capital Partners Name: Albert Alsina â&#x20AC;&#x201C; Founder, CEO and Managing Partner Email: communications@mcapitalp.com Web Address: www.mcapitalp.com
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Mediterrania Capital Partners is a dedicated private equity firm focusing in African and mainly North African growth investments in SMEs and mid cap companies. With offices in Barcelona, Casablanca, Tunisia, Algiers, and Valletta, Mediterrania Capital Partners takes a very intense hands-on and proactive approach to implementing its growth strategy, by leading the governance of the companies and driving the key internal value creation process. The partners of Mediterrania Capital have extensive experience in managing companies including commercial experience, strategy formulation, finance and operations. We spoke to them to find out more. We focus on finding the right asset to ensure that a value creation model can be implemented. Every year we review more than 100 companies and we end up investing in 2-3 assets only. Our approach is extremely specialised, focusing on creating value and making an impact in the community. Thus, providing higher returns for our investors at different levels. Our mission is to generate superior returns for our investors and partners by promoting sustainable and socially responsible investments. We strive to inspire regional industry leaders, attract, develop and retain passionate and talented professionals and uphold the confidence and loyalty of our investors. The biggest challenge we face in alternative investment is to establish a business discipline and achieve operational excellence. Both key to ensure a good performance of our portfolio companies. In terms of opportunities, working in emerging markets, there are many as a large number of companies in Africa require capital to continue to grow. Mediterrania Capital Partners is in the middle of this environment, with many firms open to receive PE funds, but facing the challenge of choosing the right companies where to invest. Since 2008, Mediterrania Capital Partners has been investing in Small and Medium Enterprises and mid-market companies, investments that fulfil the growing needs of the rising middle class in North African Emerging Markets. Our goal is to achieve superior returns by creating world-class companies, implementing highly progressive business strategies and operating according to excellent business, ethical, social and environmental standards. Impact Investing has been the driving force behind Mediterrania Capital Partners’ evolution and performance over the years. A few facts that highlight the development and success of the company include: • We have invested in several companies in North and Sub-Saharan Africa, which have grown by more than 20% year on year • Our capital injections have made it possible to create more 1,000 new jobs. The companies in our portfolio now employ more than 5,000 people, a number that keeps rising as businesses continue to expand and with that, the need for increased workforce • As a result of our investments, the number of female
employees in the portfolio companies has grown by more than 20% • All our portfolio companies offer benefits such as health insurance, vacation pay and pension plans and abide by an official equal opportunity employment policy • In terms of environmental policies, all our portfolio companies pursue at least one environmental objective • Two thirds of the companies have pollution prevention and waste management strategies • Fifty per cent of them have energy and fuel efficiency • Others focus on water resource management, natural resource conservation and sustainable land use • Finally, all our portfolio companies actively verify financial statements and they are all audited by global auditing firms At Mediterrania Capital Partners, Value Creation is at the core of our business model. Since the start of our operations, we have implemented a unique and rigorous model that allows us to deliver on average more than 20% growth on revenues and 30% growth on EBITDA in our portfolio companies on a yearly basis. Our Value Creation model resides on the following fundamentals: • Defining a Social Operating System -or governancewith monthly boards, management meetings, audit committees and strategic sessions • Ensuring to have the right person in the right job • Implementing the 3 Wide Enterprise processes that are essential for a strong and efficient operation (the strategic process, the HR process and the budgeting process) • Identifying each company’s Key Performance Indicators and putting the right elements in place to ensure all the KPIs are achieved on a consistent basis • Diligent and comprehensive follow-up Our firm takes a look at wider issues such environmental impact, social impact and Governance aspects, as we believe these are crucial aspects of our Value Creation Model. We strive to offer investors strong financial returns while creating positive outcomes for communities and for the environment. This award is a great recognition to the team of Mediterrania Capital Partners. Since 2008, the team has worked tirelessly, fully committed to our mission of creating value for our companies and delivering higher returns to our investors. We work following a strong discipline, focusing on execution, and we have built a culture of hard work and persistence towards the company objectives. We owe our success to the fact that we have one mission and one vision, and that we are not working as individuals but as a Team. Awards like this one, well-known in the industry and amongst the investors community, are very important especially for companies like Mediterrania Capital Partners as they help us get in the radar of future investors while giving our current investors extra-confidence on us. We have focused on executing our key objectives around fund raising, investing in new firms and divesting. Managing to succeed in all these areas is an enormous challenge that our team has overcome and we are very proud about it. However, we need to continue working hard and keep focused as this industry is highly demanding and in constant move.
Set a Course by the Stars
The Platinum All-Star Fund. A diversified portfolio of alternative investments, handpicked from an exclusive collection of the top 1% of fund managers worldwide.
With over $250 billion aggregate assets under management, these proven best, brightest, and most successful managers have maintained consistent track records over the past 20+ years through complete market cycles. Platinum’s All Stars are positioned to maintain tactical flexibility and to capitalize on the opportunities taking shape in the evolving global investment landscape. – – – –
Outperformance for 10+ years with superior risk-adjusted returns Access to world-class managers, many of whom are closed to new investment Powerhouse managers with complimentary styles and strategies Monthly liquidity and full transparency NEW 3.2% dividend class, payable quarterly
Platinum Capital Management. Enduring stewardship marked by a commitment to delivering competitive long-term results. Born out of a family office, we are unleveraged and manage your money in the same way as we manage our own. We do this by charting a course with our own investments before we offer products to our clients. Our global structured products, funds of funds, and single-strategy funds represent a heritage of investing in exceptional people and systems.
Platinum Capital Management Ltd · Kingsbury House · 15–17 King Street · St. James’s · London · SW1Y 6QU · UK Tel +44 (0)20 7024 9840 · Fax +44 (0)20 7321 2494 · info@platinumfunds.com · www.platinumfunds.com Authorised and regulated by the Financial Conduct Authority in the UK
NOTE: For professional intermediaries and advisors only. This advertisement is issued by Platinum Capital Management Limited, which is authorised and regulated by the Financial Conduct Authority, and approved as financial promotion for information purposes only. The Investment Fund’/s described within the advertisement are not subject to FCA authorisation and regulation under the Financial Services and Markets Act 2000 (the ‘Act’) and consequently no investor protection is provided by the UK regulatory system. Similarly, benefits available under the UK Financial Services Compensation Scheme do not apply. This advertisement contains information covering a Fund managed and registered in the Cayman Islands. Its promotion or offering in the United Kingdom is restricted to institutions or individuals falling within COBS 4.12 of the FCA Handbook, and the Financial Services and Markets Act 2000 (Promotion of Collective Investment Schemes (Exemptions) Order 2001). The fund is an experienced investor fund and not open to private or retail investors. Investors in certain jurisdictions may also be subject to restrictions on investment. Potential investors should seek professional independent advice prior to making any decision to invest. This advertisement does not constitute an offer to sell or a solicitation of an offer to buy shares in Platinum All Star Fund Limited. There is no guarantee that the Fund’s objectives will be met. Please refer to the Listing Particulars for further details of the financial and other risks involved in connection with investments in the Fund.
Best Fund of Funds – UK
Platinum Capital Management is a global investment firm that manages single strategy funds and funds of funds for investors worldwide. We spoke to them about their Platinum All Star Fund and how they consistently perform for their clients. Company: Platinum Capital Management Email: info@platinumfunds.com Web Address: www.platinumfunds.com
Founded in 1999, Platinum Capital Management Ltd. is based in London, with affiliate offices in Los Angeles, Dubai, and Isle of Man. Platinum funds offer investors a range of investment strategies built on Platinum’s commitment to delivering quality long-term investment success and a culture which embraces the continual enhancement of its investment selection, asset allocation and ongoing risk management capabilities. Platinum distinguishes itself as a boutique asset manager offering investors a premium platform – pedigreed professionals, top-tier counterparties, operational best practice, and seamless multi-jurisdictional regulatory oversight. The company’s signature Platinum All Star Fund is a diversified portfolio of alternative investments handpicked from an exclusive universe of the top 1% of fund managers worldwide. These preeminent brand names — the investment world’s proven best, brightest, and most successful — have maintained consistent track records of success over the past 15+ years through complete market cycles and have more than $250 billion aggregate assets under management. Individually and combined, Platinum’s All Stars are the best positioned to maintain tactical flexibility and to capitalize on the extraordinary opportunities taking shape as the global investment landscape continues to evolve. Significantly outperforming the HFRX Global Hedge Fund Index for the past five out of six years, Platinum All Star Fund’s consistent long-term outperformance provides compelling evidence of the successful implementation of its highly focused strategy. The Fund remains confident that both its targeted diversification among such managers and continuous portfolio optimization will continue to yield superior long-term risk adjusted returns going forward. Peter Sprecher, Founder and Chairman of Platinum Capital Management, commented: “Having significantly outperformed its peers in 25 of the past 30 months, and for the past five out of six years, it is gratifying to see Platinum All Star Fund’s consistent long-term outperformance recognised as a leading performer in the industry. This is a fitting overture to the introduction of Platinum All Star’s new dividend share class, which targets a 3.2% dividend per annum, payable quarterly.” The combination of their long-term approach with the discipline of personal seeding of each of their funds sets Platinum apart. Platinum Capital Management is 100% family and employee owned and values long term relationships with their clients - 75% of investor capital has been with Platinum for more than five years.
It is clear that the experience and expertise brought by the group’s active management of the portfolio brings demonstrable added value to investors. “We have decades of investment experience with hedge fund strategies, and many members of the investment team have worked at these world-class fund managers. Moreover, we are unique in that with our other funds we also directly invest in global equity and commodity markets ourselves. It is not at all unusual for us to discuss investment ideas and themes with our peers at some of Platinum’s All Star shops,” adds Sprecher. “The result is the aggregation of that value: the relationships, the peer-to-peer engagement, all combined with our in-house investment outlook – that is a considerable value proposition for today’s investor.” Platinum’s All Star manager selection philosophy focuses on a sustainable, long-term outperformance, preeminent, world-class managers with returns driven by insight, research and deep understanding of market dynamics. Size, financial strength and operational structure separate these powerhouse managers from the pack and enable long-term investment success. From this focused universe of outstanding toptier managers, Platinum creates a highly-diversified portfolio with superior risk-adjusted returns using their unique access advantage. Platinum has maintained long-term investment with these global leaders, many of whom are closed to new investment. Proprietary selection criteria yields a portfolio assured of first look profit opportunities, primacy of deal flow and market access. In addition, Platinum believes that the highest level of credibility and experience produces the broadest possible array of investment resources, incomparable operational skills, superior execution capability, most sophisticated technology and proven proprietary trading models. Working in alternative investments, Platinum sees significant change in the industry over the past few years. Alternative thinking is vital to delivering robust total returns solutions suited for a wide array of macro scenarios and driven by return streams from differentiated asset classes – and even to obtain the stability and return profile bonds once offered. There has been a fundamental change in investment landscape for fixed income especially. Stay too long and the costs could be massive – capital loss can significantly offset low coupon. Now more than ever, sophisticated investors are seeking alternatives to low-coupon bonds. Given Platinum All Star’s ultra-low volatility and consistent return profile, it’s new dividend class presents a compelling alternative to typical investment grade bonds.
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Equity Market Neutral Hedge Fund of the Year
QQM Fund Management AB Company: QQM Fund Management AB Name: Ola Bjรถrkmo Email: ola@qqm.se Web Address: www.qqm.se Address: Kungsgatan 48, 111 35 Stockholm, Sweden Telephone: +46 70 6183380
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QQM Fund Management AB is a Swedish Financial Supervisory Authority authorised, Sweden-based alternative investment fund manager. We spoke to them on how they manage QQM Equity Hedge, an equity market neutral hedge fund. The investment objective of the fund is to, over time, generate longterm positive absolute returns. We use proprietary quantitative models, trading the relationship between earnings and price. Given limited information processing capabilities, we find that investors tend to underreact to news which may affect a companyâ&#x20AC;&#x2122;s fundamental value which is evident in many stock markets. Our fund is neutral to the equity market, and we generate absolute returns entirely from security selection, not market exposure. Many investors realise today that adding an equity market neutral fund can significantly improve the long term risk-return profile of a conventional asset allocation. Both the fund managers and owners of QQM have made significant investments in the fund, ensuring that the interests of the management team, owners and investors of the fund coincide. There are many different approaches to the construction of an institutional investment portfolio. Our approach is proactive and risk management is integrated at each step of the investment process. The fund is constructed to target pre-defined levels of expected risk in the medium term. It is also monitored against a number of risk measures to ensure these remain within prescribed limits. We believe it is hard to find good investment ideas, and good fund managers. We remain focused on our mission to generate performance, and to stand out from the crowd. Over the past 12 months, we have been able to generate positive performance, despite some tricky trends in the market. In 2014, the fund gained in 10 months out of 12. We are thrilled to have been officially recognized for the fund´s track record of delivering solid returns. We believe it is important for the hedge fund industry that skill and performance is recognized. Fund managers do not get better when they get bigger. We believe this award is down to our risk-oriented approach to fund management, where risk management is integrated at each step of the investment process. Looking ahead, the Alternative Investment Fund Managers Directive will impact managers in a variety of ways. It will have effects in all areas of business strategies, investment strategies and operations, but it will also open up opportunities.
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Best Indian Credit Fund
Samena India Credit Fund Company: Samena Capital Name: Akash Mehta Email: ir@samenacapital.com
Samena India Credit Fund was launched in November 2013 to capitalise on a vast and under-penetrated opportunity presented in the Indian credit markets.
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A combination of high nominal rates, a compressing rate cycle and vastly enhanced prospects for currency stability presents a unique opportunity to realize mid-teens returns through the Indian fixed income universe. The Indian debt market has only recently become meaningfully accessible to foreign institutional investors (FII) as the government has expanded foreign investor debt quota limits from US$15 billion to US$85 billion over the past five years. The corporate debt market is large at approximately US$260 billion and growing at just under 20% annually. Foreign investors have historically concentrated on the larger and more liquid US$1 trillion Indian G-Sec market leaving the corporate debt market relatively under-penetrated. The latter has now evolved to better absorb foreign investor participation as issuances have more than doubled over the past three years while daily turnover has quadrupled in the past five years. Additionally, stringent restrictions by the RBI on bank lending to key credit segments such as holding company borrowings, domestic acquisition financing, and real estate development has created a large opportunity set which has thus far been filled by domestic Non-Bank Finance Companies (“NBFCs”) but at a higher cost of capital. Wholesale NBFCs typically borrow at 10-11% and onward lend at 14-15% average yields. Foreign investors can now participate in this same opportunity universe. Samena Capital, in partnership with Reyl & Cie S.A, launched the Samena India Credit Fund in November 2013 to capitalize on the superior risk-adjusted returns offered by the under-penetrated and fast growing Indian fixed income market. The Samena India Credit Fund is a high yielding, long biased, total return fund that aims to achieve superior risk adjusted returns through investing in senior and secured Indian corporate credit opportunities. The fund targets a net annualized return of 12% (USD) with moderate volatility. The fund follows a fundamental, bottom-up, research driven investment approach with a core emphasis on deep credit analysis. The fund invests across an array of local currency and USD denominated Indian credit and credit linked instruments including non-convertible debentures, foreign currency convertible bonds, Indian government securities and foreign listed bonds of India issuers. The fund seeks to manage volatility through a tactical application of macro-overlays based on currency and rate views. Indian credits currently offer equity like returns (mid to high teens) on a fully secured basis. Highlighted below are some of the key features of this opportunity: • We are seeing senior secured credits for blue chip Indian issuers yielding in excess of 14% INR yields. This is due to the restrictions placed by the Reserve Bank of India on bank lending to key corporate segments such as holding companies, domestic acquisition financings, and real estate development financing. • The Indian interest rate cycle has peaked and rates are expected to fall as inflation in India begins to come under control. The Reserve Bank of India has already initiated its rate cuts as of this year. • The renewal of the capex cycle since the Indian elections will further augment the demand for corporate credit. The local INR corporate credit market has only recently opened to scalable participation by foreign institutional investors and remains relatively under-penetrated. As an early mover in this segment and aided by an experienced team on the ground, we are seeing a very attractive funnel of credit opportunities. We firmly believe that credit has emerged as one of the most compelling ways to allocate to India.
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Best for Energy Infrastructure Investments - USA
Company: Starwood Energy Group Global, LLC Name: Bradford T Nordholm, CEO Email: bnordholm@starwood.com Web Address: www.starwoodenergygroup.com Address: 591 W Putnam St., Greenwich, CT, USA 06831 Telephone: (203) 422 7721
Starwood Energy Group specializes in value-added energy infrastructure in North America. More specifically, the firm develops and constructs, or acquires and operates, power generation and transmission projects, and other energy-related investments. We spoke to CEO Brad Nordholm about the company as well as the challenges and opportunities in the industry.
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Working in alternative private investments, and energy infrastructure in particular, requires us to be experts in the power generation markets. Our team, which includes engineers, has a keen understanding of energy commodity markets, regulation, various generation and transmission technologies and operations, as well, of course, as finance. The opportunity for investment in energy infrastructure has developed during the last two decades as the natural gas pipeline and wholesale power markets have been deregulated, fostering more competition and private – non-utility – ownership of assets. Because of the dependence of regulated utilities on the capacity and energy associated with these investments, there is an opportunity to secure intermediate and long-term contracts that provide an interesting opportunity to craft differing levels of exposure to energy commodity prices and, conversely, structured “bond-like” dividends. Over the past 12 months, we have successfully brought to financial close, construction and early operation wind projects valued at nearly $1B, successfully acquired four natural gas-fired power plants and continued development of four major transmission systems in the western U.S. Our clients are our limited partners, who are some of the most sophisticated wealth funds, pension plans and insurance companies across the globe. We work hard to provide them with transparency in all that we do. Our business model nicely aligns our interests so that we only do well when they do well on a sustained basis. Meeting our clients’ requirements is all about the team. To be successful in energy infrastructure investing requires a large, experienced team that has demonstrated its ability to work together for the limited partners’ interests over many years. To remain at the forefront of our industry, we are continually developing a first-rate team of professionals. In our business, the quality of the team and the use of our time is the “premium” in the market, and I believe that our investors invest with us for that distinguishing capability. Currently, there are a number of new entrants, some experienced and some not-so-experienced. The greatest challenge will be to maintain discipline in assessing and properly pricing risk. We are very pleased to be acknowledged for our expertise and success as a leading energy infrastructure investor. I know our entire team appreciates the recognition, especially when we’re in the midst of protracted negotiations on new projects. Every day, we simply try to be creative, thoughtful and disciplined in pursuing new power generation opportunities. This award really does not change that, but it does help reinforce our good habits.
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Best Fund in Asia - Tarascon Asia Absolute Fund
Company: Tarascon Capital Management (Hong Kong) Limited Name: Jonathan Iu Email: jonathan.iu@tarasconcapital.com Address: Level 15, Nexxus Building, 41 Connaught Road, Central, Hong Kong Telephone: +852 3757 9423 Tarascon Asia Absolute Fund was setup in 2007 by Jonathan Iu who previously was a fund manager at UBS Asset Management and a top ranked Internet analyst at SG Securities. Mr Iuâ&#x20AC;&#x2122;s investment philosophy is value driven and he adopts many principles from the prestigious Value Investing course where he studied for his MBA at Columbia Business School. Tarasconâ&#x20AC;&#x2122;s rigorous research driven bottom-up stock selection process enables the firm to hone in on specific investment opportunities where they have an edge over other market participants. This intensive fundamental research approach leads to portfolio exposures which they can establish with the highest conviction.
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Tarascon’s long-standing client base has encompassed high-net-worth-individuals (HNWIs) and professional investors such as family offices who have the investment profile, risk appetite and time horizon that span full investment cycles. Moreover, Tarascon Capital’s clients, who have been with them since the firm’s inception eight years ago, are those who fully understand and genuinely appreciate their investment approach, philosophy and strategy. Speaking about alternative investments, Tarascon’s CIO Jonathan Iu commented: “As compared to more conventional sectors, the alternative investments sector is charged first and foremost with generating absolute returns rather than relative returns to a target benchmark. In order to generate absolute returns on a consistent basis over time, alternative managers must conduct their own in-depth extensive research to seek out those investment opportunities which may not be so readily apparent to the more conventional industry players.” Despite the advantages of alternative investments, Iu is also aware of the many challenges facing this industry. “As globalization continues apace, the constant challenge for alternative managers is to discover and qualify genuine investment opportunities from those which in the end do not add value. Additionally, due to ever more efficient communications and the increased application of technology across the global investment industry, it is critical for alternative investment managers to capture as early as possible such investment opportunities in order to maximize the return potential. “Upon evaluation of potential investment opportunities, it is critical for alternative managers to mitigate downside risk through an assiduous and analytical assessment of risk/reward prior to the establishment of new portfolio positions. When new investments are finally established, a systematic and disciplined portfolio construction process is then applied to ensure overall risk levels remain within pre-determined limits.” Regulation in this industry is in a constant state of flux and, according to Iu, presents a tough challenge for smaller firms such as Tarascon. “Over the last few years, the key business challenge has been posed by the constantly changing regulatory environment worldwide as it presents varied complexities and new uncertainties to all players in the marketplace,” says Iu. “For smaller firms, the challenge is that much more acute to meet unanticipated regulatory demands for new processes, incremental infrastructure, and additional resources (headcounts) and revised operational frameworks that significantly expand the overall cost structure of the business. “Greater market volatility has also presented genuine challenges to the alternative investment community as risk management frameworks are regularly challenged,” added Iu. “As investment results may fluctuate within wider ranges than previously experienced, it is incumbent upon alternative managers to continuously upgrade their risk management systems and enhance communications to their clients to better manage their expectations.”
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Tarascon Capital’s major success over the past 12 months has been the ability to slightly diversify its strategy to selectively capture a few attractive investment opportunities within the technology related private market space. “With the marked slowdown in China and its ripple effects across the global economy, it made eminent sense especially from a prudent risk management perspective to search out investments that bear minimal correlation to the Asia-Pacific equities market.” In the long term, the major success of Tarascon Capital has been its ability to navigate different investment cycles and generate investment results that enabled their firm to retain most of its client base from the firm’s inception in 2007. “This remarka¬ble achievement reflects our firm’s dedicated adherence to its core competencies as well as a client base that fully appreciates our investment approach, philosophy and strategy.” To remain at the forefront of the alternative investment sector, Tarascon Capital intends to continue to explore investment opportunities that align with the firm’s investment approach, strategy and expertise. “Depending on the state of the global economy and investment markets, we will look to possibly diversify further into the technology related private market space. Additionally, we also want to carefully manage business growth as our success has been predicated on bringing on primarily those clients who understand our investment strategy and have the appropriate risk appetite and time horizon.” As for the award, Tarascon Capital’s reaction to winning this award can be best described as genuine satisfaction and elation since this accolade represents official recognition of a “job well-done”. “Our firm has kept its nose to the grindstone since its inception so this has been a long time in waiting. We owe this success solely to Tarascon Capital’s long standing team members who have deployed an unwavering focus on its core competencies and indefatigable commitment to deliver attractive investment returns to the firm’s clients. “Due to ever increasing challenges and complexities posed by the fast evolving alternative investment universe, it is perhaps not difficult for smaller alternative investment managers to become somewhat engrossed and self-absorbed in the daily challenges of managing their business and lose sight of how much has been achieved. The industry and peer recognition that comes with an Alternative Investment Award enables alternative investment managers like Tarascon Capital to take a moment to appreciate its recent accomplishments as well as its achievements over the years.” Tarascon Capital prides itself on its longevity which has been underpinned by its ability to generate attractive investment returns over different investment cycles. “Being a smaller firm, the team remains nimble to effectively adapt to the fast changing global investment environment. The firm’s long-term success has been driven by its focus on its core competencies which has enabled us to win this award. However, at the same time, it is important to note the firm also does not hesitate to apply its know-how and expertise within new investment arenas when it is confident such a move will add meaningful value. “In terms of the philosophy behind Tarascon Capital, I believe one of our prime brokers said it best when he stated “Tarascon Capital is not for everyone”. As evidenced by our long-standing clients who have been with us since inception, it is paramount to an alternative investment manager’s business success to have clients who fully understand and genuinely appreciate the firm’s investment approach, philosophy and strategy. “When clients are seeking to hire an investment management company, it is imperative for them to find a manager who provides a strategy that is inherently and completely compatible with their investment profile, risk appetite and time horizon. “Furthermore, with the advent of social media and increased role of technology within the global investment industry, all alternative investment managers must establish effective and timely communications with each and every one of their clients.”
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Best Absolute Return Fund - Australia
Agora Asset Management Company: Agora Asset Management Name: Rod Ebsworth Email: rode@agoraam.com.au Web Address: www.agoraam.com.au Address: Level 5, 60 Collins Street, Melbourne, Vic 3000, Australia Telephone: +613 965 297 05
Agora Asset Management is a boutique, specialist equities manager with an Absolute Return focus. They have one fund - the Agora Absolute Return Fund II â&#x20AC;&#x201C; and are totally committed to the performance of this one fund. It is a long biased fund but can short, gear or be in cash and utilises futures to hedge and otherwise manage exposure. Their clients are sophisticated High Net Worth investors. We spoke to them to find out more.
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Agora gives significant priority to protecting capital rather than just generating enhanced beta or beta returns. Accordingly, we have a highly flexible strategy implemented under a textbook investment process by well qualified, experienced managers. The process requires diligence and skill. The Fund successfully protected capital during the global financial crisis and is therefore earning significantly larger absolute dollar returns than other managers as well as outperforming the market in the past 12 months. The Fund is recognised by a number of databases as a top performing fund in its peer group. Agora is constantly evolving our research and screening process to incorporate new and more accurate data and to reflect unusual global macro-economic conditions and dynamic and variable asset pricing relationships. As for the award, Agora was very pleased to be awarded the Best Absolute Return Fund in Australia and would attribute our success to an evolving proven process implemented by a qualified, experienced team. Awards such as this are very important in validating our approach as an organisation and in keeping the funds management industry competitive and progressive to the benefit of clients. We are focused on the performance of one fund and are not distracted by business development of other products such as additional fund launches, research publications or unnecessary newsletters. We also avoid bureaucracy and have highly streamlined decision making. Our overriding philosophy with clients is to have aligned interests through co-investment in the Fund. The focus is to provide a sensibly priced product that is economically fair to the organisation, employees and clients and represents outstanding value when performance is taken into account. Looking towards the future, we envision that equity market conditions will have a big role to play, particularly the risk of dislocation in equity markets as QE comes to an end and monetary policy is normalised.
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Best Alternative Investment Portfolio Manager, Most Innovative Fund Managers & Best Performing Fund of Funds (1 Year) – USA
Company: Altß Partners LP Email: info@altb.com Web Address: www.altb.com Address: 30 Rockefeller Plaza Suite 5440, NY, NY 10112 Telephone: 212 589 5200
Altß Partners is the winner of three awards including: Best Alternative Investment Portfolio Manager, Most Innovative Fund Manager as well as Best Performing Fund of Funds (1 Year) – USA. We spoke to them about their company and learned about the team members’ wealth of experience.
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Altß Partners offers the first investible, diversified portfolio of hedge funds with a low management fee (43 bps), and zero performance fees. They use a disciplined, systematic and consistent methodology to select managers and to create alternative beta with low correlations to traditional markets. Altß Partners’ philosophy is based on three core principles. First, a well-diversified portfolio of hedge funds offers attractive risk adjusted returns. Second, the best measure of a manager’s risk management ability lies in the history of returns. Third, due diligence by experienced industry veterans produces an insightful understanding of a manager’s business model. Hans Hufschmid, Managing Partner, commented, “The Altß Partners team is honored to have received three Alternative Investment Awards in 2015 from a judging panel comprised of highly respected alternative investment industry professionals, including pension funds, consultancies and fund of hedge funds managers. Industry awards such as these are a proud mark of distinction for our commitment to our investors.” What separates Altß from most competitors is their unique quantitative model to systematically rank a large pool of hedge fund managers. They differ from traditional multi manager funds in a number of ways including: • Approach: systematic and analytical manager selection supported by experienced and focused due diligence. • Objective: a diversified, low volatility, low beta portfolio • Experience: A team consisting of six partners with over 200 years of combined Wall Street expertise • Technology: A proprietary hedge fund database with quantitative performance analytics, ranking and monitoring tools Moving into 2015 and beyond, Altß will pursue asset growth by providing a scalable solution for institutional investors who require: • Representative and diversified portfolio of hedge funds • Low volatility • Low Beta to the markets (virtually zero) • Low management fee • No performance fee • Pooled purchasing power • Weekly online estimate reporting Sustained growth in hedge fund investments from institutions creates the opportunity for Altß to provide improved methodology and automation to assist its clients in making smarter, more cost efficient hedge fund choices. MEET THE TEAM The Altß Partners team includes individuals with very broad and pertinent experience: Hans Hufschmid Founded Altß in New York and London in 2012. Prior to founding Altß Partners, Hans was a founder, chief executive officer and member of the management committee of GlobeOp Financial Services from 2000 to 2012. Before founding GlobeOp, Hans was a principal at Long-Term Capital Management and co-head of its London office for five years. Previously Hans spent 10 years with Salomon Brothers in London and New York; the last four as global head of foreign exchange sales and trading.
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Vernon Barback Is a Partner of Altß Partners. Prior to founding Altß Partners, Vernon was president and chief operating officer and a member of the management committee of GlobeOp Financial Services from 2004 to 2012. Vernon worked at Citigroup asset management from 1999 to 2004 and was the global head of operations and technology. Previously, he spent 22 years at Bankers Trust/Deutsche Bank in a series of senior management positions. He worked in proprietary trading for 11 years where he became a managing director. In 1988 he started the first US bank operated hedge fund business, taking it from a start-up to $1 billion in outside capital by 1992. Cinta DelMonaco-Kemp Cinta DelMonaco-Kemp is a Partner of Altß Partners. Prior to founding Altß Partners, Cinta was a portfolio manager for Graham Capital and Galtere International Master Fund within their discretionary macro strategy. Prior to that, she held various senior positions at Merrill Lynch from 1998 to 2006, including most recently as Managing Director and CIO of global markets and investment banking’s alternative investment business managing a 1 Billion dollar diversified portfolio of hedge funds. Prior to joining Merrill Lynch, Cinta spent 10 years with Salomon Brothers in New York and Tokyo; the last three as Managing Director and head of New York Foreign exchange trading. She started her career at Bankers Trust as a currency trader. Cinta graduated from NYU, Stern School of Business, with a BS in 1982. She serves on the board of the USTA Investment Committee and is also a board member of the Harlem Junior Tennis and Education Program. Andrea Dulberg Is a Partner and General Counsel of Altß Partners. Prior to founding Altß Partners, Andrea was General Counsel at GlobeOp and a member of its management committee from 2006 to 2013. She was Chief Counsel, Securities and Governance at International Paper Company from 2003 to 2006. From 1992 to 2003 Andrea served in various legal positions at Merrill Lynch including debt markets, governance and compliance and corporate secretary of the parent holding company. Previously, Andrea was senior counsel at Citibank from 1987 to 1992. She started her career in private practice at Cadwalader, Wickersham and Taft. Ira Rosenblum Is a Partner of Altß Partners. Prior to founding Altß Partners, Ira was a founder and a member of the management committee of GlobeOp Financial Services from 2000 to 2012. Before founding GlobeOp, he served as director of security operations and treasury management at Long-Term Capital Management (LTCM) from 1993 to 2000. Prior to LTCM, Ira managed operations at the New York offices of Salomon Brothers from 1987 to 1993 and L.F. Rothschild, Unterberg, Towbin from 1983 to 1987. Ron Tannenbaum Is a Partner of Altß Partners. Prior to founding Altß Partners, Ron was a founder, head of sales in Europe and member of the management committee of GlobeOp Financial Services. Before founding GlobeOp, Ron served as managing director and global head of hedge fund coverage at Rabobank International in London from 1998 to 1999 and at Union Bank of Switzerland (UBS) in London from 1991 to 1998. He also managed bonds, capital markets and structured derivatives teams at Salomon Brothers in New York, London and Tokyo from 1981 to 1991. From 1988 to 1991, Ron served as head of European capital markets.
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Best UK Real Assets Fund
Architas Diversified Real Assets Fund Company: Architas Name: Caspar Rock, CIO, Architas Email: Broker.Desk@architas-mm.com Web Address: www.architas-mm.com Address: 5 Old Broad Street, London, EC2N 1AD Telephone: +44 20 7562 4900
www.wealthandfinance-intl.com
The aim of the Architas Diversified Real Assets fund is to democratise access to investments previously inaccessible to retail investors. Many of these assets were previously restricted to family offices with more than £100m to invest. They are now opening up a wide range of assets for investors to diversify their portfolio. We spoke to them to find out more. Architas identified an opportunity and a gap within the alternative assets space to help those looking to provide diversification through asset classes with lower correlation to bonds and shares. Assets currently used for diversification purposes, such as emerging market debt and high yield fixed income have a high correlation to traditional bond and equity markets. The use of real assets on the other hand can potentially provide significant diversification within portfolios. The structure of the fund also makes it very different to most in the alternatives space as it holds no hedge funds and operates on a daily dealing basis. The fund is designed as a one-stop shop for investors seeking real assets exposure for client funds and portfolios. The Architas Diversified Real Assets Fund is a fund of funds, which means that instead of directly investing into real assets, we invest into funds managed by specialist real assets fund managers; we call these the ‘underlying funds’. The advantage of this approach is that it further spreads your investment by not only investing in different types of real assets but also different real asset funds that are managed by a range of specialist, expert fund managers. This fund of funds offers exposure to real assets such as infrastructure equity and debt, commodities, forestry, aircraft leasing and specialist property. Through these investments the Architas Diversified Real Assets Fund aims to provide a return that is less correlated to equities and bonds and targeting at least a 3.5% yield.
Based on feedback, we’ve developed this fund for those who are looking for a combination of diversification, income and an element of inflation protection. First, we expect this fund to be a diversifier within portfolios. Second, we expect the demand for a range of income producing assets to grow as a result of the current changes to the pension rules. Finally we believe it is right to be prepared for inflation in the future. Importantly the fund will also help combat the complexity and difficulty of researching this sector. Many of the best opportunities are in investment trusts, UCIS funds, LLP’s, and offshore funds. Operational due diligence, is crucially important especially in the light of the issues surrounding Arch Cru, EEA life settlements and Brandeaux. We look at the legal structure of an investment, its governance, liquidity provisions and valuation policies. Architas can demonstrate considerable experience in research in this area and this fund of funds offers a diversified, ‘all in one’ solution. Value of investments can fall as well as rise. Investors could get back less than they invest.
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Best Industrial Property Specialist - Western U.S.
BKM Capital Partners Company: BKM Capital Partners Name: Brian Malliet Email: info@bkmcapitalpartners.com Address: 111 Theory, Suite 250, Irvine, CA 92617 Telephone: (949) 566 8800
BKM Capital Partners acquires multi-tenant business parks and builds value through strategic upgrades, hands-on management, and adaptive repositioning. We spoke to their CEO Brian Malliet about the opportunities and challenges in their industry, and their steady growth since their inception two years ago.
www.wealthandfinance-intl.com
As an industrial real estate fund management firm, we are raising a fund to acquire multi-tenant industrial business parks in the Western U.S. As opposed to the big-box warehouse industrial space that is typically seen in the industrial category, multi-tenant industrial is a very specific niche in the commercial sector, and that niche is what sets us apart from other funds. Our platform is an operator model, which is to say we perform acquisitions, asset management, construction & property management, and disposition all in house. The product type we are targeting ranges from 100,000225,000 square feet, with an average of 20-100 tenants per property. These tenants are typically small, entrepreneurial firms that occupy 1,500 - 3,000 square-foot spaces and sign leases in the 1-3 year range, giving investors a dynamic opportunity for value creation, as rents can be increased frequently with much needed capital improvements. Itâ&#x20AC;&#x2122;s also important to note that we are in the value-add space, as opposed to core. Everything that we buy is broken, giving us a chance to achieve strong yields for our investors. Our firm was launched in 2013, and we spent the first six months proving our thesis in the marketplace. We took the time needed to establish that these broken, multi-tenant properties were available and poised for growth. In the next six months we built an execution team, and also assembled a strong Board of Directors to fuel our strategic growth. We also took the time to set up fund structuring from a legal and accounting perspective, and we successfully generated all of the fund documentation within the first 12 months of the companyâ&#x20AC;&#x2122;s creation. Over the subsequent 12 months, we went out and put our money where our mouth is. We assembled a friends and family fund and purchased six assets, with a total capitalization of just under $100 million. Through this strategy we have been able to demonstrate to our investors that we know how to raise capital, and we know how to execute. BKM kicked off our first institutional raise in January of 2015, and we are five months into an institutional capital roadshow. We have been all over the U.S., and have had meetings with approximately 60 different LP investors, including major foundations, endowments and pension plans. We currently have approximately 10 interested investors who have conducted tours and onsite visits, and another 8 are scheduled. This is a tremendous success when you look at the statistics. In North America, roughly 400 funds attempt to launch each year, and only about 10% of those funds make it. We are pleased to be in that top 10%, as we are well on our way to closing our first fund. This is a challenging endeavor and it takes a tremendous amount of hard work. Being recognized for that work is what separates us from the pack.
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Award for Excellence in Alternative Capital Raising Services
Capstan Capital Partners Company: CAPSTAN CAPITAL PARTNERS LLP Name: Konstantin Krebs Email: kkrebs@capstan-capital.com Web Address: www.capstan-capital.com Address: 57 Grosvenor Street, Mayfair, London W1K 3JA Telephone: +44 20 7101 7530 Seestrasse 195a, 8802 Kilchberg-Z端rich, Switzerland Telephone: +41 43 377 57 59
www.wealthandfinance-intl.com
Capstan Capital Partners is an independent, privately-owned financial services firm, based in London. The two principal activities of our firm comprise bespoke corporate finance services and arranging capital for special situations from our investor clients. We are very pleased to receive this Award for Excellence which is a nice recognition of our efforts and successes over the last 12 months. The focus of our alternative capital raising services has been very much on middle market companies in Western Europe. Mid sized corporates in Europe often donâ&#x20AC;&#x2122;t find access to institutional capital beyond their regional boundaries. Capstanâ&#x20AC;&#x2122;s highly international team has connected our corporate clients with capital providers in foreign jurisdictions, from North America to the Far East. Bringing together European corporates and sophisticated international investors, such as private debt investors, family offices and private equity funds is where we continue to excel. Our firm has extensive and senior experience in managing private placements gained from large- and mid-cap transactions at leading investment banks. The major differences between arranging conventional debt funding from banks and procuring capital from alternative sources in the private debt market are in the financial and legal structures. Our private debt transactions are bespoke structures to suit the very specific requirements of both, lenders and corporate borrowers. The key to our successful closings was to devise capital structures that fit in well with the business plan and financial model of the borrower while satisfying the required risk return-profile of the financier. Clients appreciate that we not only procure alternative sources for their capital needs but can also advise on the optimal capital structure of a transaction and help avoiding pitfalls in the documentation. Our comprehensive service in connection with our proven ability to find capital even in more difficult areas, such as project finance and higher risk loans, put us in a good position to continue our success in the coming year.
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Best Securities Software Solution Provider - USA
Company: Computershare Name: Joan Dromey, Vice President Email: joan.dromey@computershare.com Web Address: www.computeshare.com/privatesecurities Address: Computershare 250 Royall Street, Canton, MA 02021 Telephone: +1 781 5752582
www.wealthandfinance-intl.com
Computershare provides shareholder recordkeeping for private non-traded companies and real estate investment trusts (REITs). We spoke to them to find out more. Computershare is the largest transfer agency service provider for publicly traded companies and has tailored its product offering to address the needs of the alternative investment markets; including share valuation, subscription processing and periodic statements with valuation disclosure. As an industry leader we are involved in many industry organizations, maintain over 6,000 client relationships and assist in the client journey from privately held to publicly-listed. This spectrum gives us a unique insight into what companies need within their business lifecycle and believe we are well positioned to keep our finger on the pulse of this market. We apply our transfer agency public market practices and standards to our services for private issuers, both operating companies and funds such as REITs to minimize the risk private issuers may face. Computershareâ&#x20AC;&#x2122;s significant ongoing investment in technology and processing improvements benefits both public and private issuers that we service. We listen to our clientsâ&#x20AC;&#x2122; needs and then invest to develop helpful products and services geared to non-traded private companies and REITs. Today, there is higher demand for online services and electronic processing and we are committed to delivering innovative solutions to meet the needs of our clients. Client companies should look for a registered transfer agent that has a mature and stable foundation, as well as flexible service solutions. Computershare is a registered transfer agent with a long history â&#x20AC;&#x201C; we have over 21 million shareholder records on our platform and a stellar reputation. We provide peace of mind to clients and their investors that their corporate data and account information are secure and accurate. Computershare currently maintains records for hundreds of private issuers. We anticipate increased activity as issuers seeking to raise funds using Reg A+ recognize that a registered transfer agent such as Computershare is required by the SEC. What sets us apart from competitors is that we tailor our services to meet the needs of our clients at an affordable price. Computershare has the expertise to service clients large and small with any level of complexity. We are uniquely positioned to support non-traded private issuers and REITS in all aspects of the corporate lifecycle; from private, to IPO, merger/acquisition activity and corporate governance obligations. We are pleased to be recognized for our leadership role within the non-traded private company and REITs marketplace.
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Best for Financial Planning & Retirement Planning
Company: Cornerstone Investment Services Name: John J Riley. AIF Email: jr@cornerstoneri.com Web Address: www.cornerstoneri.com Address: 245 Waterman St, Ste 301, Providence, RI, 02906 Telephone: 401-453-5550
Established in 1999, Cornerstone was founded to provide risk management. Their strategy is open to virtually any asset class, giving them the flexibility to utilize a variety of alternative investments. Their portfolios were allocated into metals, commodities, emerging markets and inverse investments long before these investments became popular. We spoke to them to find out more.
www.wealthandfinance-intl.com
Everything has a cycle, but we find that alternative investments can be more volatile and impacted by different external forces than stocks and bonds. We believe our top-down approach gives us a more complete overview of various asset classes allowing us to take a uniquely holistic approach to investing. Wall Street tends to dismiss many investment options outside of mainstream stocks and bonds. We help our clients stay informed and point out biases where necessary. Ongoing communication with our clients, through weekly updates, regular whitepapers, an extensive website, as well as face-time with brokers and staff helps to keep our clients up-to-date. We want to be an alternative to Wall Street; giving investors personalized service with sophisticated, risk managed strategies. Utilizing well-known custodians gives clients the safety of a big firm, while we provide the personalized attention and refined strategies only a boutique firm can. Our unique strategy combines both fundamental and technical analysis. For example: our long term outlook on oil (based on fundamental analysis) is very positive, however our technical analysis gave negative indicators in early 2014; so we were able to lighten up our exposure to oil well before the price collapse. Alternatives have always played an integral role in our flexible strategy; this keeps our performance from being solely dependent on stocks and bonds. In addition to our exclusive strategy, our research and people also set us apart. I am a Registered Research Analyst (Series 86/87) which means we do our own in-house research. Many other money managers rely on outside sources exclusively. Our operational staff is efficient and caring. Our brokers work to meet the investorâ&#x20AC;&#x2122;s needs and develop investment plans that work for the client. In our industry, investors should look for a firm that does not limit their portfolios along with an understanding of risks and how to management them. The importance of a fully flexible asset allocation and risk management strategy was made obvious in the 2000 -2002 and the 2008 â&#x20AC;&#x201C; 2009 bear markets. As for the award, I appreciate that this is a peer/industry driven award and to be recognized alongside some of these other excellent firms from around the world is humbling. We focus on market research, managing portfolios, and providing excellent client services â&#x20AC;&#x201C; not on winning awards. If someone recognizes us for what we do, we appreciate it. Since 2008, the correlation among many asset classes has risen. We anticipate that as the impact of Quantitative Easing subsides, these correlations will return to their historical levels. Our strategy allows us to adjust to the changing environment. Investors that limit their choices to only stocks and bonds may be missing out on the potential benefits alternative investments have to offer.
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Best Multi-Strategy Program â&#x20AC;&#x201C; UK
CrescoCap Multi-Strat Program Company: Cresco Capital Management (UK) Limited Name: Paul Bennett Email: paul@crescocap.com Web Address: www.crescocap.com Address: 21 Arlington Street, London, SW1A 1RN Telephone: 020 7952 6820
www.wealthandfinance-intl.com
London-based CrescoCap provide investment solutions to institutional and sophisticated professional investors seeking enhanced returns in alternative investment strategies. It offers a slate of Foreign Exchange (FX) strategies traded through Managed Accounts. The philosophy at CrescoCap is to focus exclusively on the global currency markets and strive to provide a tailored service that fits its clients’ needs, using accomplished and verified investment solutions. We spoke to them to find out more. Our clients are largely accomplished HNW investors, who often tell us what we’re doing is unique. We relish being able to provide a product that few firms out there offer. Many of our competitors place too much emphasis on trading volumes and the commissions thereon which inevitably lead to greater volatility, whereas our primary focus is on risk-managed, solid, steady returns coupled which results in lower volatility. We employ between four and eight separate, uncorrelated trading strategies, bundled up into one product within a rigorous risk-management framework. Our aim is to deliver a bespoke solution which invariably involves spending time getting to know our clients and understanding their needs. We then tailor the product to suit the individual investor. We are constantly looking at ways to improve our internal processes and risk management. We are also looking at different ways of distributing our product. The project we are most proud of from the past twelve months is establishing the Cresco Foundation, an initiative that offers support through sponsorship specifically to young women in sport. I’d say the most important area in our field of trading is the risk-management and trading controls. With the FX markets being highly volatile, it is incredibly important that these systems are in place and more importantly function correctly. We were delighted to receive this award. It’s testament to the work that we have put in over the last twelve months to complement our trading results; in improving our research and analysis together with our risk-management framework. The awards are important to us, as it shows that the market recognises the work we have put in.
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Award for Innovation in Emerging Market Investment Strategy
Emerging Wealth Equity Name: Mark Archer Email: Marcher@trilogyadvisors.com Web Address: www.trilogyadvisors.com Address: 23 Austin Friars, Room 2.19, London, EC2N 2QP Telephone: 0203 170 8057
Trilogy Global Advisorsâ&#x20AC;&#x2122; goal is to build an enduring, independent and profitable firm by consistently helping its clients achieve superior investment results. The firm strives to exceed its clientsâ&#x20AC;&#x2122; expectations and maintain a reputation for excellence by managing all aspects based on the following core values: client focus, integrity, process orientation, teamwork, and continual improvement. Over the past 12 months, the firm has raised over $2bn in the emerging wealth asset class and helped raise the profile of this asset class in the investment community. We spoke to Head of Marketing, Mark Archer, to find out more about the great work that has seen his firm named among our 2015 award winners.
www.wealthandfinance-intl.com
Our Emerging Wealth Strategy is designed to capture the growth in emerging markets by focusing on companies that are well positioned to generate returns for equity investors regardless of their domicile. It is an ‘unconstrained’ approach which can invest in Developed Market companies as well as in Emerging Markets so long as the significant drivers of their profit and revenue growth are derived from emerging markets. Our clients in the strategy include Sovereign Wealth funds, endowments, multi-managers, high net worth investors and pension funds. We offer a Dublin-based UCITs fund, a US mutual fund and separate account management. Working in alternative investments is unlike any other industry, bringing with it its own unique set of challenges. For example, there is currently an information advantage in researching which developed market companies have a meaningful exposure to EM growth as not of all this is made public at present. This does, however, make for an exciting and ground-breaking product. We also face the challenge of how to invite prospective investors to ‘think outside the box’ as this strategy crosses over conventional asset allocation divides between ‘Developed’ and ‘Emerging’ stock universes – we think it’s more like how the investment world will look in 5-10 years’ time. And speaking of keeping one eye on the future, we continue to invest in research and in our investment processes to stay ahead of the game. As our portfolio managers are both shareholders in the firm and co-invested in the strategy they have a major incentive to stay focussed on performance. Of course, having our work recognised with awards such as this is also a great incentive. We are thrilled to have won this award as it’s a great credit to the partnership efforts of the whole firm. Researching, developing, managing, launching and servicing the Emerging Wealth Strategy has been a great team effort and its success is down to the fact that the approach intuitively ‘makes sense’ to a great many investors who lack the resources to implement it themselves. Prior to winning this award, the key area of focus has been relative valuation comparisons between developed and emerging companies as well as, crucially, their relative competitiveness. Revenues fail to tell the whole story. Through fundamental research and meeting over 1,200 companies a year, we focus on margins, free cash flow, market share and management expertise, return on invested capital and top line and bottom line growth rates to understand who are the true winners across DM and EM companies competing in the same sector.
Plus, we believe that much of this success is down to the philosophy we adopt when dealing with our clients. We believe in providing as much transparency as possible. We want to take clients ‘under the hood’ (‘under the bonnet’ in English) so they can fully understand our philosophy and process and how that is reflected in their portfolio. Clients have said how much they appreciate the regular updates and detailed level of monthly reporting we provide. Then, of course, there’s our bottom-up process with global sector analyst teams researching both developed and emerging companies rather than regional research teams looking at the two asset classes separately. Our approach is also genuinely unconstrained. Other managers might allocate up to 20-30% to developed market companies outside an emerging markets mandate but our strategy has no limits on the ultimate domicile of the companies in which we invest. The underlying revenue exposure in the portfolio currently is 70% from emerging markets but the split between developed and emerging companies is currently 53%/47%. Most importantly, we believe that we are a company whose culture and objectives are aligned with those of our clients. That is easier to achieve at a boutique in which the employees still control the economics of the firm. Specifically, an approach such as emerging wealth requires a global research discipline and one which avoids any ‘silo mentality’ of looking at Developed and Emerging Market companies separately but which instead can look across the whole investment universe. As we move into 2015 and beyond, there are a number of changes and challenges facing our industry and we must ensure that we are prepared. Emerging Markets have still been very popular, partly because many institutions are still underweight in this important area. Emerging Wealth has been designed to offer an alternative way of investing in this area which addresses the shortcomings of the conventional MSCI EM Index. The Index has less than 2% in Healthcare, for example, even though we know that healthcare will be a major beneficiary of increased spending as household incomes rise in emerging economies and as, unfortunately, western-type diseases such as diabetes respond to changing diets. And yet it is an area dominated by the big Developed Market companies. Also, there is still a trend towards passive investing, toward ‘de-risking’ and toward alternatives to equity. Emerging Wealth is a great showcase for why genuinely global active management unconstrained by benchmarks and with a high ‘active share’ can still have a place in client portfolios.
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Award for Excellence in Capital Management - Bermuda
Company: Equilibria Capital Management Name: Daniel Tafur / Fabio Lopez Ceron Email: info@eqcapm.com Web Address: www.equilibriacapital.com Address: O’Hara House, One Bermudiana Road, Hamilton HM08, Bermuda Telephone: +1 441 295-2233
Equilibria Capital Management is an asset-management firm based in Hamilton, Bermuda and Geneva, Switzerland. The firm was launched in 2011 by Daniel Tafur and Fabio Lopez Ceron, tested industry veterans who had previously spent over 15 years with Morgan Stanley’s Investment Banking and Wealth Management divisions in London. Equilibria Capital manages investment funds and separate accounts for private and institutional clients globally. The firm’s edge resides in its strong macro investment focus combined with a philosophy of capital preservation.
www.wealthandfinance-intl.com
The firm’s flagship fund is Avance Global, which has been managed by Tafur and Lopez Ceron since 2003 when they were at Morgan Stanley. The fund invests globally in equities, fixed income and currencies and follows a value approach designed to both achieve superior returns and to protect capital. Avance Global (which has Euro and $US share classes as well as UCITS and offshore versions) has delivered annualized returns of +6.9% since its launch in 2003 and has an annualized volatility of approximately 4.6% over the last 3 years. These returns are significantly better than those of major equity, fixed income and hedge fund indices over the comparable period– both in absolute terms and on a risk-adjusted basis. In managing Avance Global, Equilibria strive to achieve superior returns by selecting 40-50 high-conviction and deeply researched investments – which they are happy to hold for the long-term. The company tends to stay away from index-tracking strategies and are focused on buying securities that are attractive on both an absolute and relative valuation basis. Avance Global’s superior track record has resulted in the fund being rated with Four Stars by the prestigious Morningstar rating system in the categories of Overall Performance, 10-Year Performance, 5-Year Performance and 3-Year Performance. Equilibria Capital has grown steadily since its launch and currently manages over $250 Million of assets. Over the last 12 months, the firm has launched two new funds: the EQC Private Markets Fund, which invests in special situations, and the EQC Agrifund, which focuses on the agriculture space. The EQC Private Markets Fund, launched in early 2015, invests in special situations such as activist, illiquid and off-market opportunities. The Equilibria team is no stranger to such a strategy, given both its prior investment-banking track record as well as the high-profile activist campaign of 2013-2014 which pitted them against the Board of RHJI. Equilibria aggressively campaigned on behalf of shareholders to unlock value in RHJI by pushing for a number of tactical and strategic initiatives. The campaign led to substantial changes at RHJI which eventually led to the implementation of the majority of Equilibria’s requests and recommendations and an important recovery in RHJI’s share price. The EQC Agrifund was launched in Q1 of 2014 and invests globally across asset classes in the agriculture space. Unlike other agriculture-themed funds (which tend to trade only in the futures space), the EQC Agrifund invests in the shares and bonds of agricultural companies as well as in niche strategies such as trade finance for agriculture crops or real assets such as farmland. In 2014, Equilibria added a highly experienced portfolio manager with a unique agriculture background to manage the EQC Agrifund. The results have been very positive: the Fund has delivered net returns to investors of 6.5% in its first 13 months. Tafur and Lopez Ceron believe that the agriculture space offers unique opportunities for achieving superior long-term returns combined with limited correlation with traditional stock and bond markets. The Fund fits perfectly with Equilibria´s value approach and investment in the long-term themes that can deliver attractive longterm returns combined with capital preservation.
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Best Assurance & Advisory Firm in Alternative Investment - Luxembourg
Company: EY Luxembourg Name: Kai Braun, Luxembourg Alternatives Advisory Leader, EY Luxembourg Web Address: www.ey.com/lu Email: Kai.braun@lu.ey.com
EY is a global leader in assurance, tax, transaction and advisory services. With 190,000 people based in over 150 countries EY is the most globally integrated professional services organization. This article provides an overview of EY Luxembourgâ&#x20AC;&#x2122;s global presence and its differentiating factors, which make the firm a recognized leader in alternative investments.c
www.wealthandfinance-intl.com
How does EY position in Luxembourg? In Luxembourg, with over 1,100 professionals, we combine our European and global capability with our local knowledge to deliver a full range of services to meet our clients’ business needs. With over 300 private equity and real estate professionals, EY Luxembourg has the largest specialized and dedicated Private Equity and Real Estate practice as well as the broadest range of services in the industry among local assurance and advisory firms. Our team members provide assurance, advisory, valuation and tax services to both fund promoters and service providers. We are one of the leading local transaction tax experts. Our Private Equity advisory team has led the most significant Private Equity advisory engagements in the local market and abroad. In the context of the Alternative Investment Fund Manager Directive (AIFMD), our advisory team assists Private Equity houses, custodians and administrators in a strategic as well as operational set-up of their business platforms in order to align their organization, products and distributions with new requirements. How do you differentiate yourselves in the area of Alternatives compared to UCITS? Comparing private equity and real estate to the traditional fund sector is like comparing apples and pears. Even though they are both fruits, they are clearly distinct. While in the UCITS world, back- and middle office processes are highly standardised and automated with multiple transactions every day, Alternatives require more manual input or highly specialised systems in order to analyse highly complex transactions at certain moments. Having a clear focus and understanding of Alternatives is how EY aspires to speak the same language as our clients. What is your philosophy to client service? In a world even more complex and dynamic than ever before, clients expect to be served by the right teams of professionals, regardless of their service lines or geographies. It is not enough to be technically excellent — our clients want to be served by professional service providers who are connected to their business, responsive to their needs and insightful about their sector and the challenges they face. In that respect, we have united all our people to deliver services around the concept of “exceptional client service”. Exceptional client service is all about our EY professionals being the most connected, responsive and insightful in the marketplace. Connected means bringing all of EY to our clients with the right people in the right locations, building trust and enriching relationships. Responsive means the desire and commitment of every person at EY to be proactive, visible and timely. Insightful means sharing EY experiences and a point of view tailored to our clients’ situations, thereby advancing their thinking. To be successful, exceptional client service has to be more than something we say we do, we have to demonstrate it every day. Exceptional client service is a fundamental part of how we operate, both strategically and tactically. EY aspires to create the highest-performing teams, delivering exceptional client service worldwide, which differentiates us from our competitors. Our teams use cross-cultural strengths to tackle globally-dimensioned problems and they bring together diverse perspectives to create solutions. As we bring great people into our organization, we enable them to perform at their best within the teams in which they work.
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Best for Hedge Fund Market Data Integration & Best for Middle Office Data Management Solutions
FASCET Company: Fascet LLC Web Address: www.fascet.com Address: 224 West 30th Street. Suite 203. New York, NY 10001 Telephone: 888 327 2381
Fascet provides middle office data management solutions, application hosting, and professional services that simplify investment operations for the worldâ&#x20AC;&#x2122;s leading Investment Managers, Fund Administrators, and Prime Brokers. Founded in 2002, Fascet is based in New York, NY with offices in Dallas, TX, Saudi Arabia, and India. We got in touch with them to learn more about their company.
www.wealthandfinance-intl.com
The global investment management community is leveraging Fascet’s middle-office data management platform to assert control, accelerate scale, and reduce operational risk within their trading and operational workflows. The platform provides clients with the following benefits: • Real-time transparency into front-to-back operational processes via an intuitive dashboard • Centralized control over interoperability of disparate systems and integration points • On-demand resolution of data integrity and data accuracy-related issues • Reduced errors with automated straight-through processing (STP) • Flexible and rapid deployment – enterprise install or software as a service (SaaS) model Fascet Communicator provides a single, centralized platform to aggregate and integrate data between any disparate sources internal or external to your operations. For transaction processing, Communicator incorporates trade capture, trade compression, validation, options assignments and exercises, custodial transactions and positions, as well as trade reporting and uploads. As for market data processing, this includes securities data updates (static and schedules), corporate actions, and pricing. Communicator features include the following: • Business process management and business activity monitoring • Aggregation and normalization of any data format or standard • Comprehensive integration links • Secure File Transfer Manager • Real-time FIX message processing • Data validation rules ensure data accuracy • Easily consolidate trades from numerous internal and external sources • Message-based integration with internal systems and counter parties • Proactive user notifications and alerts Fascet is also a hosting alliance partner of Advent Software Inc. and its award-winning solutions for portfolio management, reporting, accounting, trading, compliance, margin and finance management. Fascet’s advanced private cloud hosting model and a 13-year track record of successfully supporting Advent clients ensure a turnkey, highly scalable trading and operations infrastructure that helps maximize the value of your Advent environment. Its features include: • Advent hosting alliance partner • Scalable private cloud that grows with your needs • Secure remote access • 99.999% guaranteed uptime • Replication between SOC 2 data centers An intimate understanding of front, middle and back office business processes, as well as an extensive track record of technical expertise, position Fascet as a strategic partner. Fascet offers a range of Professional Services to help control costs and manage growing complexities that include: • Project management • Data conversion and reconciliation • Systems analysis, integration & testing • Custom reporting (e.g., RSL, REP, SSRS) • Migrations and upgrade management
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Best for Futures and Options Portfolios & Best Risk Adjusted Returns
Company: Finex LLP Name: Andrew Gebhardt Email: group@finexlondon.com andrew.gebhardt@finexlondon.com Web Address: www.finexlondon.com Address: 50 Cannon Street, London EC4N 6JJ Telephone: 0044 0203 008 2536
Finex is an asset manager specialising in Multi-Asset futures portfolios. After over a decade of designing, implementing and trading technical analysis models for Tier 1 institutions, Andrew Gebhardt, Marcello Bugnoli and Michael Carney created Finex LLP in 2010. We spoke with Andrew Gebhardt, Managing Partner, to find out more.
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We specialise in the application of completely distinct Technical Analysis methods in Managed Futures through a Multi Strategy approach. The purpose of this approach is to have a highly liquid strategy with low volatility, low correlation and steady returns in all market conditions. We offer this strategy through Managed Accounts and our Navigator UCITS IV fund (launched in November 2013). At Finex we do not attempt to predict which phase the market will be in next, rather we built a robust method that tries to be involved in any identifiable pattern. Our Three Portfolio Managers have each designed profitable independent models and, by combining them, we reduce volatility whilst maximising performance. Research and Development and Intellectual Property are at the core of our business. We build and deploy all our own systems, placing a high emphasis in the R&D of new models. We know the cap at which our strategies remain nimble and agile enough to deliver to our investors. Investing in Finex gives the potential for diversification through low correlation to traditional asset classes and also to other Managed Futures strategies. Full compliance with UCITS IV regulation provides European investors with transparency and liquidity. Finex Navigator maintains an average 1.45 Sharpe, despite the low performance for CTA strategies in 2013 and the volatility of returns seen by the industry as a whole in Q4 2014. The Best Month returned 2.59% whilst our Worst Monthly Return was only -1.59%. We are confident in our potential to perform in all market conditions, so we have built up a strong team whose focus is the raising of visibility and assets both in Europe and the United States. We have recently extended our product range to include a Fund tracking program for our newly formed Chicago based CTA. We believe that it is crucial to be clear and transparent with investors; we approach current and prospective clients with real expectations of risk and returns. Our clients like the candid approach we have towards investments. We have a very humble, approachable culture and realise that the only reason why Finex exists is because of the confidence and trust of our investors. The whole team firmly believes that we should treat others (and their money) as we would like to be treated. We are very happy to have won two awards, Best Risk Adjusted Returns and Best Futures and Options Portfolios. As an emerging manager, it is a great satisfaction to be publicly recognised for the extraordinary efforts made by the whole team behind closed doors. These awards are important to raise our profile in an industry where it is sometimes difficult to be recognised for the true return on risk when the focus is often on AUM. In addition both awards are consistent with our philosophy of investment and the design of our Multi Strategy approach.
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Best Managed Futures Program-Global Capital Allocation Fund - Australia
Global Capital Allocation Fund Company: Global Capital Allocation Fund (Hobereau Investments Pty Ltd) Name: Adam Tomas Email: adam@gcaf.com.au Web Address: www.gcaf.com.au Address: 1206/31 Spring Street, Melbourne, VIC 3000, Australia Telephone: +61 407 996 764
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Victor Maschek / Shutterstock.com
The Global Capital Allocation Fund is a managed futures program that provides investors with an exposure to all major global assets. The program aims to profit by capturing the long-term price trends that are characteristic of all markets from time to time. We spoke to them to find out more about this process. The fundâ&#x20AC;&#x2122;s trading activities are directed by a proprietary automated trading system, called the Global Positioning System (GPS). GPS monitors a basket of 130 futures contracts across all major exchanges and takes risk controlled positions as potential upward or downward trends emerge. Managed futures funds such as these and particularly funds that generate returns by following price trends have seen spectacular returns over the past 12 months. The Global Capital Allocation Fund has been at the forefront of the industry, generating 89.85% for the 2014 calendar year and continuing on with a further 44.67% for the first quarter of 2015. Our compound annual return since inception (July 2011) is running at 24.02%. We find that there are three conceptual features differentiate us from other managers competing within the managed futures space: 1. We target trends occurring in longer timeframes and as a consequence we do not periodically change or evolve the core trading logic that underpins GPS. By trading on a longer time horizon, we increase the likelihood that our return distribution be characterised by long periods of underperformance punctuated by shorter periods of high performance. The source of our edge, the tendency for market prices to trend from time to time, becomes more psychological and less technical as you increase the time horizon in which you operate; in short, our edge is more stable and reliable than that targeted by managers operating in shorter time frames (who must continually evolve in order to stay ahead of the curve). Moreover, our trade execution costs are reduced. 2. We trade a large universe of futures contracts; and, given our longer-term horizon and small fund size, are able to access markets that may be considered illiquid to managers operating on shorter time horizons and / or with larger funds under management. 3. We manage all risk at the individual trade level and do not apply portfolio or asset class limits. In effect, we do not assume that the collection of trading positions held at any one time are a portfolio, and are not reliant on correlations for risk management; we assume that all correlations can go to one and manage individual trading positions accordingly. This means that at any given time we tend to hold a larger basket of active trading positions than our peers. An increase in inter-market correlations tends to be associated with an increase in the prevalence of price trends; our volatility will tend to increase during these periods, however so will our returns and the likelihood that we capture large price trends.
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Best Investment Industry IT Provider - USA
Company: Halcyon Financial Technology, L.P Managing Partner: Rodric Oâ&#x20AC;&#x2122;Connor Email: info@halcyonft.com Web address: www.halcyonft.com Addresses: 423 Washington Street, San Francisco, CA 94111 100 Bayview Circle, Newport Beach, CA 92660 135 East 57th Street, New York, NY 10022 Telephone:(415) 683 0740
Halcyon Financial Technology provides tailored Information Technology services for private equity, hedge funds, and investment management firms. We spoke to Managing Partner Rodric Oâ&#x20AC;&#x2122;Connor about their award, as well their innovative approach to providing their clients with the best service.
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Halcyon Financial Technology’s (“HalcyonFT”) clients range in size from the brand new investment managers with $50 million AUM, to large alternative investment firms with an excess of $30 billion AUM. All of their clients are regulated by the SEC or FINRA. They currently provide service in the major US domestic financial metropolitan areas with offices in San Francisco, New York and Newport Beach. They offer four main product lines: 1. Tailored outsourced IT service 2. Consulting, Infrastructure and application projects 3. Salesforce consulting for investment management firms 4. Technology cost reduction for clients, and their portfolio companies Their services range from helping clients to leverage cloudbased services, such as Salesforce.com and BOX to enhance employee productivity and improve collaboration, to implementing converged compute and storage infrastructure from Nutanix to replace legacy and complex SAN environments. On winning the Alternative Investments Award, CEO Rodric O’Connor comments, “From our inception five years ago, our goal has always been to deliver the highest quality IT service to our clients in the investment management industry. We have not waivered from that vision. It is very exciting to be awarded this recognition for our efforts from our clients. We thrive on working hand in hand with our clients to help them grow. Our business succeeds when they succeed.” Major client successes of the firm over the past 12 months have included: n Delivering a 4.93/5.0 average user satisfaction rating for outsourced IT services. For their outsourced IT clients, HalcyonFT provides contractual SLAs where they give a credit if the client satisfaction level falls below 4.0. In HalcyonFT’s five years of operation, they have never had to pay out to a client. n Upgrading the compute, storage, and security infrastructure for a $32 billion AUM firm using Nutanix and Palo Alto Networks equipment n Implementing Salesforce.com for investment pipeline management in a $12 billion AUM private equity firm n Integrating Salesforce.com CRM and Addepar portfolio accounting for a $13 billion AUM wealth manager n Providing cyber security gap analysis, and strengthening clients’ security postures with the implementation of security best practice, application aware firewalls, intrusion detection, and hybrid two factor authentication Customers attest to their experiences working with the HalcyonFT team: “We have a business partner who understands the financial services industry and helps us address not only our most pressing issues, but also what we should be concerned about. I’m extremely happy with the service provided by the HalcyonFT team.” – CFO at a $4 billion AUM asset management firm. “I felt that HalcyonFT was money well worth spending, especially since we wasted so much with the previous firm
implementing solutions we subsequently had to replace. Honestly, there was no comparison. We should have hired HalcyonFT in the first place. I don’t think we could have done all this without them. They were strategic in our success, and we haven’t looked back. We’re extremely satisfied. Going with HalcyonFT was the best decision I ever made as a CFO.” - CFO at a $1 billion AUM private equity firm. “I’m the one that gets beat up if something goes wrong. And we don’t get many chances to fix things that go awry. So it’s important to me that I’m dealing with knowledgeable professionals. The team at HalcyonFT definitely know what they are doing, and document their work clearly. They’re really good at what they do. ” – VP of IT at a $30 billion AUM asset management firm. Says Mr. O’Connor, “We consistently honour and meet our commitments. By providing a proactive, white glove service experience to our clients, we reduce the amount of time that they have to worry about IT.” When asked what changes he sees coming to the industry in the next twelve months, Mr O’Connor responded, “We believe that each client should have the appropriate technology to meet its business needs, and that the optimum point to maximize function and value is in the use of best-in-breed commodity cloud-based solutions, supplemented with specific technology when needed for competitive advantage. Within the industry we are seeing a simplification via the adoption of cloud technology, balanced by an increase in complexity due to regulatory and competitive pressure.” When looking to the remainder of 2015 and beyond, he sees three main technology trends affecting the industry: 1. The rise of cloud services at all layers of the technology stack: n Application layer – e.g. Salesforce for CRM, BOX for content, Addepar for Portfolio Accounting and Microsoft 365 for Email n IT utility layer – e.g. Duo for two-factor authentication, Symantec Cloud for Anti-malware and Cisco Meraki for mobile device management n Infrastructure layer – e.g. Cisco’s Meraki hybrid network cloud, and DR solutions leveraging Infrastructure as a service from such as VMware’s vCloud, Microsoft’s Azure or Hosting.com 2. The death of the SAN for on-premise high demand workloads n The emergence of converged compute and storage solutions such as Nutanix that simplify operations, improve performance, and allow for linear scaling 3. The increased focus on security at all levels within client firms n Regular employee security education in reaction to the increase in frequency and sophistication of spear phishing attacks n Adoption of best practices and procedures for cyber security n Implementation of advanced firewalls to provide visibility of application traffic and greater threat prevention n Two factor authentication to protect remote access and cloud services
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Award for Innovation in Online Money Management
Investment POD Company: Investment POD Name: Jacqueline Ko Matthews Email: Jackie@investmentpod.com Web Address: www.investmentpod.com Address: 46175 Westlake Drive, Suite 100, Potomac Falls, VA 20165, 20165 USA Telephone: 703-773-7006
Investment POD is a disruptive online money management platform designed for wealth advisors, family offices and individuals. We spoke to Investment PODâ&#x20AC;&#x2122;s Founder & CEO, Jacqueline Ko Matthews, about this exciting new platform.
www.wealthandfinance-intl.com
Investment POD was created to provide a comprehensive wealth management solution allowing investors to achieve better long term risk-adjusted returns by diversifying across assets and strategies. It provides a platform menu of both traditional and alternative/hedge fund investment strategies at a fraction of the cost of paying external single strategy hedge fund/alternative managers. The Investment POD (Passive, Opportunistic and Defensive strategies) enables wealth advisors/investors to easily customize and execute advanced portfolio solutions for their clients. We believe that working in alternative investments allows us to take a broader view of the strategy choices and enables us to use complementary methods to reduce major risk exposures. By using entirely quantitative rules we can easily keep up with market movements across assets and strategies. The major challenge in alternative investments is to convince investors that it can be safer to diversify into quantitative alternative strategies rather than just rely on passive holdings that could decline a lot in bear markets. Human tendency is to feel more comfortable in “herds” but what they don’t realize is that it’s a false sense of security. If the Titanic sinks, everyone goes down. It’s often difficult to convince people to think “outside the box” as they tend to be comfortable only with the very generic passive buy and hold strategies. What they really should have in their portfolios is a diversified set of strategies where some zig while others zag with low to negatively correlated strategies. However, achieving this can be costly, expensive and time consuming. The Investment POD creates a user friendly online solution at disruptive prices. Over the past 12 months, we have demonstrated that our technology works seamlessly in both the creation and execution of customized strategies for individual clients without human intervention. We also have shown that it is possible to provide hedge fund quality investment strategies and diversify across strategies and asset classes at a much lower cost than traditional methods of allocating out to external managers. Our ability to provide a 100% online money management experience above and beyond the generic robo-advisor and creating a niche market between expensive hedge fund managers and traditional wealth advisors/ advisors competing on a commoditized product is our differentiator and key edge. At the moment, we are continuing to develop new strategies to add to our POD menu such as the POD Sector Rotation strategy recently made available to our existing clients. We are also continuing to upgrade and expand our user experience on the technology side. We do believe we are at the forefront of a new paradigm shift towards strategy diversification and bringing sophisticated alternative strategies into the online money management space. Although we have been featured in Barron’s, Wall Street Journal, Benzinga and other financial media, this award validates the advances we have made in the fintech/ alternative asset management space.
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Best Long-Term Absolute Return Fund (2 Years)
The Kriya China Fund Company: Kriya Capital Name: Choong Han Ching Email: info@kriyacapital.com Web Address: kriyacapital.com Telephone: +852 398 312 00
The Kriya China Fund is an investment fund implemented by Kriya Capital. We spoke to them about their investment process, and the investment landscape in their region of China.
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“Kriya” in Sanskrit means following a path of discipline and deep exploration towards achieving perfect mental clarity and high-quality action. This is the basis for our investment process. Asset prices, especially listed assets, are volatile and in the short-term, may not reflect any commensurate change in fundamental trends. With today’s multichannel modes of communication, it’s easy to get distracted by and react to headlines, losing focus on critical investment considerations such as what drives long-term returns. The discipline that an automated process instils helps to keep the investing brain (and action) on the ‘optimal’ path. But critical as it is, this is only one part of the investment process and it is important to ensure that the process overall has an adequate degree of dynamism, given that change overtime is a certainty. So we are grounded by our process and investing experience, but are on our toes for changes that may be necessary. The Kriya China Fund looks for multiyear landscape shifts in China and the winners and losers that are most leveraged to those changes. Historically, such changes have created anomalies that persist for a period of time, typically years, and at the right price and under the right conditions, these can create abnormal returns. We believe that the most sustainable returns are generated by a portfolio of such positions. For example, the effect of a shift in China’s economic growth leadership away from “bricks and mortar” towards higher quality, more sustainable drivers and the trend of capital being no longer free – the impact of these are significant and lasting, across many different industries from commodities to retail, affecting corporate and consumer behaviour overtime. Based on historical and continued dissection of the success and loss biases of the investment strategy, the Fund is concentrated in large-cap and ‘value’ names, where long exposures typically have a demonstrated history of pricing power under the right circumstances and the reverse is true for short exposures. The proprietary “Dashboard” model that grew from this process ensures there is a book of research that substantiates every position and that a core but dynamic matrix of criteria have to be satisfied before the position is initiated. This ensures that the investments are as asymmetric as possible in terms of their payoffs, where the downside risk is calibrated appropriately. Not surprisingly, very few positions “tick enough boxes”, as a result of which the portfolio is concentrated, with generally no more than 20 positions. The Fund aims for a meaningful bottom-up hit-rate and to-date, winners and losers have been in China and non-China markets, in different industries. We do not look for or invest based on market direction.
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Global Macro Strategy Fund of the Year â&#x20AC;&#x201C; Switzerland
LCJ Investments S.A Company: LCJ Investments S.A. Name: Leonora Kerry Keane Email: leonorakerrykeane@lcjinvestments.com Web Address: www.lcjinvestments.com Address: 118 Rue Du Rhone, 1204 Geneva, Switzerland Telephone: +41(0) 22 849 6640
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LCJ Investments S.A. is a specialist investment management company. LCJ manages the LCJ FX Strategy, a fundamental and discretionary global macro strategy expressing both directional and non-directional views on currencies. We spoke to their CEO Leonora Kerry Keane about her company and the strategy behind their success. LCJ is based in Geneva, Switzerland, and was founded in 2007 by Conor MacManus, Jonathan Tullett and Leonora Kerry Keane. The portfolio managers, Conor MacManus and Jonathan Tullett, have between them over 37 years of working and trading in FX markets and conceived the strategy back when working together in the late 1990s. The investment universe includes major currency pairs, non-traditional crosses, and emerging market currencies. Utilizing a wide and diverse range of market data and analysis, and extensive experience of FX, we identify medium-term and long-term themes, for which we seek to find attractive risk-reward opportunities within a well-defined risk and volatility mandate. Since inception the strategy has been managed through a variety of different economic and market conditions, and has consistently produced long term class-leading risk-adjusted returns utilizing a robust risk management framework. Looking back at 2014, we are happy to report that despite difficult trading conditions in the first two quarters, we finished the year up 10.80% net, maintaining our consistent long term performance track record during what has been a challenging period for the asset class over the past few years, and we were again nominated for an EuroHedge Award (Commodity & Currency), following our previous nomination in 2012. Looking forward into 2015, we think the environment has the potential to be better suited to our Strategy, with the increase in volatility and macro factors further driving divergence between currencies, which allows the Strategy to further capitalize on medium term trends. Despite a volatile start to the year in January, we are pleased to report that we successfully navigated recent market developments such as the removal of the CHF floor, and returned +6.82% net for Q1 2015 with our YTD number as at mid May 2015 an estimate net +7.97%.
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Best Performing Multi-Asset Hedge Fund, 2004 -2014 Top Performing Opportunistic Capital Management Firm, 2014
Melkonian Capital Management Company: Melkonian Capital Management (MCM) Name: Marty Harmon Email: marty@melkoniancapital.com Web Address: www.melkoniancapital.com Address: 1 Bryant Park, 39th Floor, New York, NY 10036 Telephone: (212) 300-6006
Melkonian Capital Managementâ&#x20AC;&#x2122;s core fund, LTE Partners (the Fund) has generated 13 consecutive positive years. Their unique investment approach incorporates opportunistic multi-asset class investing, a value-driven selection process and a firm belief that patience is a virtue. We spoke to Marty Harmon, Senior Managing Director, in an effort to try and understand the secret to their success.
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MCM’s unique investment strategy actively allocates capital across multiple asset classes: Public Equity, Real Estate, and Private Equity -- very similar to the way Family Offices, Endowments, Foundations and Pensions invest. By implementing an opportunistic multi-asset class approach, Melkonian Capital has reduced drawdowns and generated returns which have significantly outperformed both long-only equity and various hedge fund benchmark indices for over a decade. Since 2001, Fund returns have outpaced the S&P 500 and the Credit Suisse Composite HF Index by over 300%, with considerably less volatility. Furthermore, the Fund has never generated a down year. In short, MCM has successfully protected capital by allocating away from overvalued asset classes (e.g. Real Estate in ’07 & ‘08) and into asset classes which are potentially undervalued (e.g. Private Equity companies in ’10 & ’11). MCM focuses on two key elements in its efforts to increase investor net worth: reduce or eliminate negative returns and have the patience to wait for asymmetrical investment opportunities. Part of MCM’s success can be attributed to their extreme attention to downside risk analysis. As value investors, MCM’s research focuses considerable attention to ‘what can go wrong’ scenarios. MCM has not only protected investor capital, but has never generated a negative return (including ’02, ’08 and ’11).
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Making difficult investment decisions is never easy. In 2008, MCM was slowly reducing equity exposure and, immediately after Lehman’s collapse, the firm decided to liquidate its remaining equity positions and move to cash. By hedge fund standards, this was out-ofthe-box thinking. This decision increased the firm’s liquidity and allowed us to slowly allocate capital into Private Equity and Real Estate investments at very attractive levels.
A strong dose of investment patience has served MCM well. Given their broad investment mandate, MCM rarely feels the pressure to invest in a specific deal, asset class, or within a predetermined time frame. Since MCM is never forced to invest, they have the luxury of time and need only target quality assets which are mispriced or undervalued. Once an investment has been made, the firm actively monitors and manages the position through high touch research (e.g. company visits) and board participation. MCM’s core advantage is derived from its opportunistic multi-asset class investment approach. Generally speaking, conventional or single-asset class managers are required, via their investment mandates, to allocate capital within a specific sector or asset class – regardless of underlying valuation metrics (e.g. many equity managers were required to continue to invest in equities in the ’07 & ’08 period). Occasionally, those valuations reach extremes (e.g. Real Estate in ’06 & ’07). When this situation arises, single-asset class managers have limited options because their mandates restrict investment flexibility. Importantly, when faced with similar scenarios, MCM can alter its investment focus and rotate capital away from overvalued asset classes into asset classes it feels are more appropriately valued or provide a better opportunity for profit.
In 2014, the value of MCM’s Real Estate, Private Equity, and Public Equity positions increased significantly, generating the Fund’s highest returns since inception. Melkonian Capital continues to build on its historical success with a strong start to 2015 as several of its portfolio companies are strategically positioned for growth. In today’s climate, MCM continues to research opportunities in several asset classes, but more specifically in Private Equity and some distressed sectors within U.S. equities. MCM is seeing numerous investment opportunities to evaluate and plans to increase research personnel in 2015 focusing on individuals with significant industry expertise. According to Mr. Harmon, the fact that Melkonian Capital has posted many years of consistent returns demonstrates the success of its investment model. Real Estate and Private Equity investments often have slightly longer investment periods and investors like to see a full cycle play out. MCM has successfully executed their investment philosophy for the past 13+ years, through two major corrections and one financial meltdown, and investors have greatly benefitted from the firm’s unique investment strategy.
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Best Financial Adviser - Missouri
Moneta Group Company: Moneta Group Investment Advisors, LLC Name: Gene Diederich, CFP速, CPA, CEO Email: info@monetagroup.com Web Address: www.monetagroup.com Address: 100 S. Brentwood Blvd., Suite 500, Clayton, MO 63105 Telephone: 314-726-2300
Most successful businesses have a Chief Financial Officer to help coordinate its financial affairs, Moneta Group believes successful families need the same kind of financial support, and this is exactly what they do. We spoke to them to find out more.
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At Moneta, our role is to do one thing: provide clients with completely customized services that take the stress and complexity out of managing personal financial affairs. This gives our clients the freedom to enjoy the life they worked so hard to achieve. Of course, providing a sense of wellbeing requires more than a little work. As Family CFOs, we take it upon ourselves to provide each client with unique advice on how to manage, grow and protect their assets. Investment management is obviously a piece of this and our approach to alternative investing is comprehensive—essentially, we will consider any non-traditional investment and evaluate its merits, risk/reward qualities and its potential role in our clients’ portfolios. But, investments are not the end-all be-all for our services; the complexities of retirement planning, estate and philanthropic strategies, tax planning, money management, risk management and business succession also require a wide range of expertise. This expertise can be found in Moneta Group principals and professional consultants who hold more than 195 professional designations, including CFP®, CFA®, AWMA®, AFI®, PFS, J.D., CPA, CLU and others; credentials that give the firm an incredible depth and breadth of expertise across a broad range of topics. Not only does our firm have a vast array of credentials, but we are led by a board of directors, headed by Chairman Tom O’Meara and CEO Gene Diederich, that provides solid leadership and a robust infrastructure that allows Moneta principals to focus exclusively on the needs of clients. Plus, we have an immediate and onsite professional service platform, including accounting, investments, human resources, marketing and communications, information technology and operations, further supports our professional advisors and their teams. Ultimately, this provides our diverse clientele with a boutique style advisor that can accommodate for all of their unique needs. Moneta Group serves a diverse client base ranging from the emerging affluent, philanthropists, business owners, and beyond. As an independent RIA (Registered Investment Advisor), we manage more than $14.1 billion in assets (as of December, 2014), which ranks us among the top RIAs in the country. In addition, Moneta’s Institutional Consulting business serves the business community, providing customized, fiduciary advice and managing more than 250 retirement plans with more than $3 billion in assets. We truly believe that no other firm can provide the “Moneta Experience” in the way that we do. We are committed to foraging our industry for the very best investment choices for all or our clients. Furthermore, we are completely independent and always will be. Our principals have the freedom to be entrepreneurial and run their businesses as they see fit, taking care of their clients in the way that best serves each unique individual—independence means that we will never be pigeon-holed into following a stringent guideline or think inside the box. This meaningful experience has led Moneta to have major success in growing our firm over the last 12 months. We hired nearly 100 people in the last year and plan to grow another 50 in the coming 12 months. We have promoted several consultants to principals (owners) and are experiencing organic, quick growth due to the exceptional care that we take of our people and our clients. All in all, the level of care that we provide our clients is what makes us the “Best Financial Adviser – Missouri;” above everything else, providing Raving Fan service makes our work meaningful and impactful, and it will always be our goal, first and foremost.
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Best SEC-registered Investment Advisor - Kentucky
Navin Advisors LLC Company: Navin Advisors LLC Name: John Navin Email: johnnavin@nextdoorfinancial.com Address: 523 West 3rd Street, Lexington, Kentucky Telephone: 393-819-7126
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Navin Advisors LLC is a Lexington, Kentucky-based, SEC-registered investment advisor created by John P. Navin and private equity. It is registered for accredited investors in Kentucky, North Carolina, Nevada, California and New York. Focused on equities both long and short, the firm conducts extensive research, technical and fundamental, designed to uncover what may be profitable opportunities with an eye toward mitigating risk and volatility. We spoke to them about their company and winning their award. Can you tell us about Navin Advisors LLC, your clients and the services you offer. Are there any specific alternative investments that you specialise in? At Navin Advisors LLC , we trade stocks, ETFâ&#x20AC;&#x2122;s and ETNâ&#x20AC;&#x2122;s â&#x20AC;&#x201C;but only those that have huge volume and liquidity. Generally, we stick with large and mid-capitalization stocks and skip small and micro-caps. How does working in alternative investments differ from the more conventional sectors? Are there any specific things you need to take into consideration and how much more difficult is it to keep your finger on the pulse? When working in alternative investments, we enjoy much greater decision-making flexibility as compared to working within a conventional corporate-style arrangement. What specific challenges/opportunities do alternative investments present, both to your business and your clients? To keep on top of our game in our industry, we work hard at communicating clearly with our clients and with our service providers. What major successes can you point to over the past 12 months that have seen your business stand out among your peers? Over the past year, we have enjoyed a very good performance versus peers and benchmarks. What plans does your business have in place to ensure it remains at the forefront of the alternative investment sector for the coming year? Our plan is to pay close attention to the markets every minute they are open. What was your reaction to winning this award and to what do you most owe this success? Navin Advisors LLC is delighted to win the award. Our success is the result of many years of careful study and of direct experience trading the markets.
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Sustained Excellence in Fund of Funds Investments â&#x20AC;&#x201C; USA
Northern Trust Asset Management Company: Northern Trust Investments Contact: Northern Trust Investor Relations Email: NTHFInvestorRelations@ntrs.com Web Address: www.ntrs.com Address: 50 S. LaSalle Street â&#x20AC;&#x201C; MB12, Chicago, IL, 60603 Telephone: (312) 630-6869
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Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of asset management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide. Asset management is delivered through the multi-asset class investment management business of Northern Trust Corporation, Northern Trust Investments, Inc. (NTI). We spoke to them to find out more. Northern Trust’s global, multi-asset class investment manager serves institutional and personal clients worldwide. They take a consultative approach in assessing client needs and implementing innovative investment solutions, ranging from specific investment product mandates across the capital market matrix to total investment program management. As one of the largest and fastest-growing investment managers in the world, they follow a highly focused business strategy that has earned Northern Trust distinction as an industry leader. Their thoughtfully developed business approach, which emphasizes excellence in investment performance, exceptional client servicing, innovative product management, global distribution and effective branding has provided them the ability to serve clients well, resulting in outstanding growth and increasing market share. Northern Trust Asset Management has the right individuals in place to grow the business and successfully provide solutions to clients and investors, and to continue generating strong risk-adjusted performance. Their team consists of senior investment professionals with deep expertise and experience in the hedge fund space. By listening to its clients, the firm is developing unique products and solutions to meet the growing demand for alternative solutions. One of Northern Trust’s competitive advantages is their qualitative ability to evaluate whether a manager’s past performance is due to luck or due to skilled individuals applying a consistent investment process with the potential for continuing successful performance in the future. Investment professionals are active participants in the manager research and selection processes and emphasize using quantitative analysis not as a primary research method, but as a secondary method used to confirm an understanding of the manager’s investment process and portfolio risks. Additionally, the team’s focus on seeking small to mid-sized managers has provided unique exposures and diversification to investors throughout various market environments. The nimbleness of the hedge fund program has allowed them to invest where they see the best opportunities. Northern Trust’s success in the Alternative Investment Awards comes after sustained hard work in the alternatives field, adhering rigorously to procedures and unyielding standards.
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Award for Innovation in Foreign Direct Investment Strategies, Nova Scotia - Canada
Nova Scotia Business Inc. Name: JP Robicheau Company: Nova Scotia Business Inc Email: info@nsbi.ca Web: www.novascotiabusiness.com Address: World Trade & Convention Centre, 1800 Argyle Street, Suite 701 Halifax, Nova Scotia, Canada B3J 3N8 Telephone: 902.424.6650
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The Canadian province of Nova Scotia is a great place to do business, and Nova Scotia Business Inc. (NSBI), exists to help companies make the most of all the opportunities the province has to offer. We spoke to them to find out more. Located on Canada’s beautiful east coast, Nova Scotia continues to gain global attention through its ongoing success in attracting top-tier hedge fund administrators, insurance firms, and banking institutions. With a strategic geographic location and time zone, cost savings, competitive incentives, and access to a talented, educated workforce, Nova Scotia’s advantages continue to drive value for international businesses like Citco Fund Services, Mitsubishi UFJ Fund Services, and Marsh Captive Solutions. Companies continue to choose Nova Scotia as their strategic nearshore location to service global internal and external clients. Through the efforts of Nova Scotia Business Inc. the province’s private-sector-led business development agency, Nova Scotia has recently welcomed another two new international firms – CNS Solutions (BDO Cayman Ltd.) and San Francisco-based Conifer Fund Services. “What especially differentiates us in the eyes of our clients is our approach to facilitating long-term partnerships between industry, academia, and government.” said Mr. Robicheau, Director of Financial Services & Nearshore Solutions. “Our job is to understand the client’s needs when selecting a location. We understand that time is money when it comes to making critical decisions and we respond with real-time information that matters most to their needs.” In 2012, KPMG recognized Halifax, the province’s capital city, as the fastest growing hedge fund administration centre in Canada. And according to fDi intelligence, Financial Times Ltd., Nova Scotia was the best-performing region in North America in attracting inward investment in 2012. Nova Scotia attracted more FDI projects per capita than any other state or province, with three of the four largest job-creating FDI projects in Canada going to Nova Scotia.
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Best Fund of Hedge Funds - MAYIBENTSHA GROWTH Fund
Company: Novare Investments Name: Eugene Visagie, Portfolio Manager Email: eugene@novare.com Web Address: novare.com novareinvestments.com Address: Third Floor, The Cliffs, Office Block One, Niagara Way, Tygerfalls, Carl Cronje Drive, Bellville, South Africa Telephone: +27219147730
Novare was founded in South Africa in October 2000 as an independent investment advisory business. In 2001, the management of Novare identified opportunities within the alternative investment space, and Novare Investments, an independent, multi-manager was established providing investment solutions to both institutional and retail investors. We spoke to them about their region and their ambition of being the multi-manager fund provider of choice.
www.wealthandfinance-intl.com
Over the years, Novare Investments has been nominated for and has received several prestigious national and international awards. Our goal is to be recognised by our clients as the multi-manager fund provider of choice. We follow a focused, specialist approach to investment management and have developed an innovative research framework incorporating traditional and alternative asset classes into our unique product offerings. Our approach and philosophy combine to provide clients with superior multi-manager products that are based on risk-cognisant investment performance, exceptional service delivery and ethically sound and sustainable investment decisions. We are pioneers in the construction and management of fund of hedge funds products, having managed the award winning Mayibentsha Moderate Fund of Hedge Funds since April 2003. Other fund of hedge funds products include a suite of risk-profiled portfolios for both the institutional and retail market that enables investors to target a specific risk and return profile. Robust portfolio construction combined with in-depth research and reporting systems enable the team to blend different asset classes and hedge fund strategies in an optimal way. All products are multi-manager, multi-strategy funds of hedge funds and are designed to reduce risk, enhance returns and preserve capital over the longer term. Assets are allocated to experienced hedge fund managers, diversifying risk and gaining exposure to a broad range of investment strategies. The Mayibentsha team proactively reallocates among managers and strategies based on an ongoing assessment of both quantitative and qualitative factors, combined with economic factors. As specialists in the field of hedge funds in South Africa, Novare has published the authoritative annual Novare Investments South African Hedge Fund Survey since 2004. Mayibentsha Growth is focused on a concentrated blend of South African domiciled hedge funds with the emphasis on more actively traded strategies, predominantly equity long/ short. The fund maintains low volatility in monthly returns â&#x20AC;&#x201C; lower than JSE All She Index, combined with low correlation with JSE All Share Index and the All Bond Index Looking ahead, our intention is to remain at the forefront of product development in this new era of hedge fund regulation in South Africa.
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Best Holistic Financial Planning Firm – UK
Nurture Financial Planning Ltd Company: Nurture Financial Planning Ltd Name: Simon Linstead Email: simon.linstead@nurturefp.co.uk Web Address: www.nurturefp.co.uk Address: Yare House, 62-64 Thorpe Road, Norwich, NR1 1RY Telephone: 0844 800 3370
Nurture Financial Planning Ltd is a financial planning firm that combines a desire to constantly improve with the ability to truly listen to what its clients want. The firm has built its proposition based on service and its clients truly value the time Nurture’s advisers spend with them, explaining exactly what financial decisions need to be made, and the options and implications of each. We caught up with Nurture’s Simon Linstead to talk about his company’s award win.
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At Nurture, we do things slightly differently to a lot of our competitors. Our advisers do not pick direct stocks or unit trusts, but instead a comprehensive fund panel is in place, grading available ‘risk constrained’ multi-manager, multi-asset funds. As per our regular fund panel, we have put in place an Alternative Investment panel. Of course, naturally these types of investments may be released in ‘tranches’, some with shorter closing dates than others. Indeed, as well as these time pressures, there is also the need for additional due diligence, paying particular attention to HMRC investigations or defaults. Of course, we are still subject to many of the same challenges facing others in our profession, particularly when it comes to ensuring that advice is timely and appropriate. This area of advice can involve other professional connections and with the additional due diligence required, lead to, sometimes, strategic delays in recommendations being provided. However, as the marketplace grows, more and more solutions are available all year round. A big part of overcoming this and many other challenges within the alternative investment arena is the quality of our professional connections. These relationships are the key to providing clients that suit this area. We offer regular seminars to our professional connections, in order that they too are kept up to date with the marketplace and any changes in legislation. By improving their understanding, it is far more likely that they will be able to identify scenarios where Nurture Financial Planning can offer assistance. In a profession as intensely regulated as the financial services, awards provide solid evidence of worth that can be demonstrated to professional connections and clients. The fact that this award was given to us as a result of multiple nominations from those that offer their products and solutions to us, it is a true compliment. Naturally we were very pleased that our efforts in this marketplace have been recognised. Amongst these efforts has been a constant striving for better education of our advisers, professional connections and clients. The main challenge where this is concerned comes when providing advice to clients in this area where they wish to take their time making a decision, yet the recommended solution may have an impending closing date. This is inextricably linked to our philosophy of giving our clients time: time to explain clearly their current situation; to identify their ambitions and goals; to discuss and develop strategies; to educate and explain solutions. By doing this, we always put our clients in the best possible position to make fully informed decisions. We see this as the start of the relationship as ongoing service is vital, not only to keep on track with changes to legislation and markets, but to adapt the plan to take into account any changes to the clients circumstances. At Nurture Financial Planning Ltd, we firmly believe that, when it comes to selecting a financial planner, a proven track record is vastly important. Our experience shows that a client would rather be part of a consistent investment journey than be exposed to huge peaks and troughs. Again, this forms a major part of our overall philosophy. We are confident enough to state that we are not investment specialists and we do not need to build complex investment portfolios to justify our fees. Instead, we draw on the true expertise of our professional investment partners. Given the inherently changeable nature of our profession, this expertise is also invaluable when it comes to ensuring that we stay firmly at the forefront of any new developments within the profession. For example, it was interesting to note the mention of ‘deeds of variation’ to be receiving attention from HMRC soon. We anticipate that this may lead to further investment in the alternative arena, following the introduction of inevitable restrictions.
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Best for Energy Investments - Connecticut
Parker Global Strategies Company: Parker Global Strategies, LLC Name: Virginia Reynolds Parker Email: virginia.parker@parkerglobal.com Web Address: http://parkerglobal.com Address: 9 W Broad St #300, Stamford, CT 06902, USA Telephone: 203.358.4000
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barbsimages / Shutterstock.com Parker Global Strategies LLC (PGS) was founded by Virginia Reynolds Parker in December 1995 to specialize in providing alternative investment strategies for institutional and private investors. Today, PGS specializes in US energy infrastructure investments where the Firm manages customized accounts, a Cayman fund and a UCITS compliant fund. PGS has developed the PGS MLP Top 20 Trax Index® which is currently available in Japan. Additionally, PGS manages FX manager indices which are available through major global banks. PGS is registered in the US as an Investment Adviser, a Commodity Trading Advisor, a Commodity Pool Operator and a Woman Owned Firm (Connecticut). PGS has 14 employees with its corporate headquarters in Stamford, Connecticut. Michael R. Parker serves as President of PGS. Virginia Reynolds Parker serves as Chief Investment Officer. Ms. Parker has a strong background in equity, foreign exchange, energy and commodity markets and risk management. In 1995, her book, Managing Hedge Fund Risk was published and later became one of the top selling risk management books globally. In 2009, Ms Parker was inducted into the FX Hall of Fame. In 2010, Ms. Parker was selected as one of the 50 Leading Women in Hedge Funds in association with PriceWaterhouse Coopers. Craig Weiland serves as Senior Vice President and Assistant Portfolio Manager. Mr Weiland had over 8 years’ experience as an Analyst for energy and refinery companies before joining PGS. Mr. Weiland leads PGS’ energy research and analysts. PGS strives to deliver excellence and high touch service to all of our clients. PGS’ energy funds target both the capital appreciation and attractive yield available through investing in Master Limited Partnerships (“MLPs”). MLPs are publicly traded securities with a long history of growth and attractive yields. The strategy allows investors to participate in the growth of the US energy revolution by investing in MLPs owning and operating US energy infrastructure including pipelines, storage facilities, processing and transportation. MLPs have been popular with individual investors in the US; more recently pensions and insurance companies have begun investing, attracted by the yields and growth of the distributions over time. Today, the market cap of listed MLPs is approximately US$630 billion. PGS’ strategy is based upon a “Best Ideas” portfolio with a strong “value” bias. PGS combines a top down view of the MLP sectors with a bottom up search for the most attractive names according to its fundamental screening process. PGS also assesses overall market risk and the expected impact on the portfolio to determine its ongoing allocations to the core, thematic and hedge components of the portfolio. The portfolio typically holds 25+ MLP positions whose initial position size may range from 1% to 8%. PGS may build the position over time during market pullbacks or with additional confirmation that our investment thesis for the holding is intact. Within a specific MLP sector, we generally have a bias towards the higher yielding MLPs that have a compelling story. PGS’s strategies provide for daily liquidity. Risk management is an integral part of the Firm’s portfolio management. PGS funds have won numerous awards over the past several years including Best Performing Fund-Energy for 2013 and 2014.
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Best Global Fund Accounting Software - Penny速
Penny-It Works Web: www.PennyItWorks.com Email: info@PennyItWorks.com Tel: (914) 358 0016
The acclaimed software, Penny-It Works, is a registered Microsoft Partner that offers specialized partnership and shareholder accounting solutions for the financial industry. Penny is used to manage more than 950 funds with more than $490 billion in AUM, providing automated and instant access to detailed investor data.
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Penny’s open architecture and proven features easily integrate with portfolio accounting and CRM systems, data warehouses and in-house proprietary solutions. Penny is tailored to the specific needs of leading hedge funds, fund of funds, PE firms, fund administrators and management companies with assets under management ranging from $100 million and up. Distinguished from Competition Our organization is comprised of a remarkable group of alternative investment accounting veterans that give us the expertise to develop software in a way that cannot be matched by our competitors. Our staff’s deep understanding comes from real-world experience – a CFO of a large hedge fund group, controller of a private equity organization, lead developer for a major fund administrator and more – and gives our team an unrivaled ability to create flexible, user-friendly, automated solutions for the demanding back-office alternative investment environment. In Depth Design A big factor in our continued success is the deep analysis that goes into the product design process that starts with a constant review of regulatory literature, as well as ongoing communication with clients. When we uncover a need, we gather our experts together to determine what the underlying purpose of the request is and how that might morph in the future. This deep analysis allows us to create a more holistic solution that goes beyond superficial answers. We endeavor to enhance our product so that it not only solves today’s needs, but is flexible enough to handle tomorrow’s anticipated problems. Statistics: • • •
Over $490 billion assets under administration 7 of top 25 funds flow through Penny 3 of the top 4 administrators use Penny
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Highly-Specialized Investment Service Provider of the Year â&#x20AC;&#x201C; USA
Presidium Partners Company: Presidium Partners, LLC Name: Steve Farrell Email: steve.farrell@presidiumpartners.com Web Address: www.presidiumpartners.com Address: 2400 Camino Ramon, Ste. 178, San Ramon, CA 94583 Telephone: 925 790 0300
Steve Farrell and his business partner, Frank Newsom, are veterans of the alternative investment industry. Steve graduated from Harvard Business School in the mid-90s and worked on Wall Street for 10 years before launching Presidium Partners in the mid-2000s. Frank graduated from the Wharton School in the early 90s and started and built his own company before joining Steve to form Presidium Partners. The pairâ&#x20AC;&#x2122;s business school associations provide deep resources for accessing private investments in the alternative space and they have a very hands-on approach to client relations and are very comfortable in the high-net worth space. Following the pairâ&#x20AC;&#x2122;s award win, they told us a little more about their business and philosophy.
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Presidium can help you whether you are looking for a high-level multi-family office offering a full range of services or just the ability to gain access to bold, fresh ideas to complement your existing investments. Our firm offers a new level of client advocacy, rigorous due diligence and access to global investment ideas. Investment success, while built on sound principles and proven tenets of investment management, is not found by following the herd. It comes from hard work, discipline, research, a willingness to test assumptions and the sourcing of new ideas. We firmly believe that the best ideas are born and acted upon, not recycled. Bold, new investment ideas rarely come to market. Instead they are shared among our closest associations, accessing ideas and sourcing opportunities from personal networks lead to investment success. We source proprietary, direct, real assets, private debt and equity investment opportunities worldwide. Many wealth advisors adhere to recycled allocation models â&#x20AC;&#x201C; a one size fits all approach. In reality no two people are alike. Investors often hear the same story and buy the same widely marketed, overpriced investment products. These are not premium products but commodities. Traditional allocation should be done with the broadest diversification and the lowest cost possible. At Presidium, our investment decisions are built on the principle of capital preservation--and we take this stewardship seriously. Multi-generational wealth creation requires one to look beyond the noise of the day and is created by focused and persistent effort. Keeping that wealth requires no less concerted an effort. We know our clients intimately and create unique portfolios to meet specific needs and goals.
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Award for Excellence in Strategic Portfolio Development - USA
Company: Protege Partners Email: info@protegepartners.com Address: 25 West 53rd Street, 15th Floor, New York, NY 10019 Telephone: 212 784 6300
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Protege Partners, LLC (“Protege”) is a specialized asset management firm that was founded in 2002 to focus exclusively on investing in established smaller hedge funds and select emerging managers. We spoke to them to find out more. Differentiated from the broader universe of hedge fund investors that principally focuses on large, widely held funds, Protege is recognized as an industry expert in what it believes is the highly attractive, less efficient, and under allocated universe of smaller hedge funds. By deploying its expertise through a unique model of investing, one that blends seeding and arms-length investments, along with thematic and tactical opportunities, Protégé works with some of the most sophisticated institutional investors in the world to complement and complete a robust hedge fund program. In addition to Protégé’s commingled investment strategies, Protege constructs customized portfolios that focus on the Fund’s core competencies in order to address a broad range of needs faced by its investors. Customization can range from very concentrated portfolios to strategic portfolios that have a specific strategic or regional focus. One of the areas of focus of Protégé’s customized efforts is Asia. Six years ago Protégé’s founders returned from the region excited about the opportunities they saw and decided to open a research office in Singapore. What they viewed as an evolving market dynamic, high levels of stock dispersion, inefficient research coverage, and the emergence of a new generation of talented investment managers, provided for a ripe opportunity for hedge funds. The decision to establish a presence there proved rewarding and Asian managers now comprise approximately 20% of Protégé’s flagship portfolio. The firm is currently working with investors to help them find opportunities in the region. At the core of everything Protégé does is its proprietary technology system, ASPN (AltShare Private Network). ASPN is a total front, middle and back office system that Protégé’s has used since inception to run its manager of manager business. Protégé now offers this technology to institutional investors to help them build, execute and monitor their own direct, multi-manager hedge fund portfolios. The ASPN system combines state-of-the-art portfolio management technology with the ability to selectively share information and collaborate with like-minded investors to improve every aspect of the hedge fund investment process. Protege is 100% employee-owned, maintains a substantial co-investment alongside clients and proudly cultivates a culture that thrives on innovation, transparency, technology, and alignment of interest with investors. Headquartered in New York with an office in Singapore, Protégé currently employs 34 professionals.
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Best-in-Class Hedge Funds â&#x20AC;&#x201C; UK
PwC Company: PwC Name: Lachlan Roos Email: lachlan.j.roos@uk.pwc.com Web Address: http://www.pwc.co.uk/ Address: 7 More London Riverside, London, SE1 2RT Telephone: +442072131309
PwC offer an all-in-one service where any deal can be catered for and any territory is serviced by local subject matter experts. We spoke to them about their process when dealing with clients and how they keep at the forefront of their industry.
www.wealthandfinance-intl.com
We’ve invested a lot in our network and our pools of expertise reflect market trends. At the moment, for instance, we have very deep talent in the real estate and illiquid credit space. As for alternative investments, there’s been a significant branching out from conventional strategy and capital market investment in recent years. We find that keeping up to date is not hard when you can treat your client relationships as business partnerships. At the moment, our clients are increasingly looking at new ways of guaranteeing total return so we’re constantly flexing our solutions to match non-homogeneous business structures. Keeping an open dialogue with industry, regulators, authorities and the service sector is key to ensuring longevity. The economic climate of recent years forced everyone to look at where value could be derived most efficiently. We have brought this mentality with us into a very positive period of growth and helped our clients to meet the expectations of increasingly sophisticated, yet cautious, investors. Over the past 12 months, we’ve been leading the effort in bringing Chinese fund managers to London and lately we helped Harvest to set up their UK manager. The coming together of UK and Asian markets will be a key growth area over the next few years, with a focus on long-term sustainability. To ensure prolonged success, we find that nurturing our upcoming talent and promoting relationships to the top of the agenda will be critical to staying ahead of the competition. Technology and operational efficiency will be key to our clients’ margins, so we are working hard to develop new solutions all the time. Being passionate about providing the highest possible quality service is central to how we behave, both within PwC and in the market. Individuality is celebrated and new ideas are given the help they need to grow. We have the best advisors in the industry and we continue to ensure that talent is deep-rooted at every grade. Our clients recognise that the strength of our support is underpinned by the depth of our team. We offer the best of both talent and networks in the industry and we ensure that every engagement is given market-leading input. As for the award, it is always satisfying to see that people recognise where investment has been made and value conferred. Success has and always will depend upon working together with our clients to provide a bespoke service. It’s important to celebrate success and it helps to remind people that open competition is a good thing. The more competitive PwC and its counterparts are, the better served the wider industry is.
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Best Infrastructure Focused Investment Manager
RARE Infrastructure (UK) Ltd. Company: RARE Infrastructure Name: Kate Hudson Email: Kate@rareinfrastructure.com Web Address: www.rareinfrastructure.com Address: 84 Brook Street, London, W1K 5EH Telephone: 07720 738636
RARE was established in 2006 as an investment management company focused exclusively on global listed infrastructure. Their philosophy is to provide investors with a high quality portfolio of listed infrastructure securities managed by an experienced team of investment specialists. RAREâ&#x20AC;&#x2122;s clients include government, corporate and industry pension funds, sovereign wealth funds and other large institutional investors. Additionally, RARE operates large retail businesses in Australia and Canada. We spoke to Kate Hudson, Head of Institutional Business, UK and Europe, to find out more.
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RARE was initially founded to provide investors with the opportunity to access the risk/return profile available in unlisted infrastructure assets from portfolios of listed securities. Our approach to investment builds on this heritage, and at the same time reflects the key differences and opportunities that are available to investors in listed equities. Kate explains that RARE is a benchmark unaware manager and as such is not focused on the generation of an index. We are entirely focussed purely on identifying and investing in high quality infrastructure assets and as such we are not distracted and do don’t digress from this focus. Our ambition is to be recognised as the preeminent infrastructure investment firm globally. To achieve this RARE is focused on delivering; excellent investment outcomes for our clients, meeting or exceeding our clients expectations and creating a high performance culture. To assist us to achieve this RARE’s team of 16 investment professionals is one of the largest and experienced in the listed infrastructure space. In terms of what opportunities we have in our industry, we find that an infrastructure asset’s ownership structure (listed or unlisted) does not change its underlying characteristics and operating cash flows. Therefore, whilst listed infrastructure assets will mostly trade with listed equities characteristics in the short term, in the long term, they should revert to reflecting their underlying infrastructure characteristics. This discrepancy between stock fundamentals (value) and its daily market pricing presents significant opportunities for investors. For clients looking for a firm in our industry, we believe there are 3 key features every investment manager needs. These include: Team – RARE encourages all members of the investment team to participate actively in investment matters, apply critical thinking to constantly challenge the status quo. The aim is for all members of the team to be empowered to undertake deep analysis and for this process to be collaborative. This ensures that assumptions are socialised across the team and are more consistent across sectors and regions, allowing for greater comparability of outputs (returns, risks and valuations). Experience – The RARE investment team are first and foremost infrastructure specialists. Breadth and depth of experience is vital to understanding and managing risk and making considered and informed portfolio decisions. Experience includes: relevant buy and sell-side equity research; investment and advice for unlisted investors in infrastructure; advising regulated and other infrastructure companies; work in infrastructure company operations; and advising regulators and governments on regulation. Process - Excellence in research is at the heart of RARE’s investment process. Research is the key determinant of portfolio decisions at RARE. As a global investor, it is essential to have a consistent framework for the way research is done (use of financial models, company meetings, analysis) and, making appropriate comparisons between companies in different industries and sectors, and reflecting expectations of future changes in the macro environment. Our absolute return approach to portfolio construction then gives us flexibility to build a portfolio that delivers strong Risk Adjust-ed Returns to Equity (RARE).different industries and sectors, and reflecting expectations of future changes in the macro environment. Our absolute return approach to portfolio construction then gives us flexibility to build a portfolio that delivers strong Risk Adjust-ed Returns to Equity (RARE).
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Award for Excellence in Private Equity - New York & Sustained Excellence in Secondary Investments - USA
Second Alpha Company: Second Alpha Web Address: www. secondalpha.com Address: 276 Fifth Avenue, Suite 901, New York, NY 10001 Telephone: +1 (212) 446-1600
Second Alpha provide innovative capital solutions for private companies and their shareholders. They spoke to us about how the times have changed, and that building private companies takes more effort, dedication and capital than ever before.
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We find that achieving company exits by trade sale or IPO takes more than double the time that it did a decade ago. As a result, founders, executives and investors face tremendous challenges maintaining a collective focus on corporate aspirations while also pursuing their own individual return objectives. Here Second Alpha Partners can help. Second Alpha crafts innovative capital solutions that allow founders, managers and investors in private companies to achieve liquidity prior to company sales or IPOs. Second Alpha buys shares and convertible securities on a secondary basis and also invests capital directly into growth companies. We think in terms of relationships not transactions. So we are willing to do more than just write a check. The firm is able to leverage its team’s extensive experience in the venture industry to better position the companies in which it invests for long-term success. Our team has structured numerous types of secondary-linked, special situations and traditional equity investments in private companies, from the simplest to the most complex and exotic. Regardless of the specifics of a given situation, those who approach Second Alpha can expect a response that is knowledgeable, constructive, friendly and discrete. The Second Alpha investment team brings more than fifty years of combined venture capital, company operations and dedicated secondary investment experience to their daily work. The team has extensive industry knowledge and private equity expertise. Second Alpha is different than most private equity firms. We make secondary investments in private companies, purchasing shares from existing shareholders – founders, executives, angels, VCs or corporate investors. In addition, the firm invests capital directly in private companies that meet its investment criteria, usually in tandem with making secondary purchases of shares from existing investors, but also in situations involving debt conversions, restructurings, recapitalizations or pay-to-play financings. We were founded on the conviction that ten years is a long time for any shareholder to wait to receive some liquidity for an investment. Beyond their direct effects on investor returns, the long holding periods that have developed since the Dotcom Era have also threatened to disincentivize entrepreneurial risk taking and limit innovation. Second Alpha sees itself as a pioneer in the type of value-added secondary investing that is a natural and highly complementary component of the evolving venture cycle. Behind the scenes, we rely on a great deal of careful data analysis to identify the types of companies in which it invests. The work that the Second Alpha team puts into its research helps to create more efficient due diligence processes, facilitate faster investment decisions and drive better results.
Furthermore, we serve a vital new function in the innovation community. The firm enables entrepreneurs, VCs and other investors to achieve partial or full liquidity within a reasonable time frame without having to force a company into an exit process before it is ready. Second Alpha takes on a supportive role in investor syndicates, providing capital, advice and energy to companies at key moments in their life cycle, and its team members leverage extensive industry experience when active board participation is required. Second Alpha focuses its investment activities on private companies with proven business models, solid product offerings and good prospects for future growth. Companies that fit Second Alpha’s maturity criteria include: • Mature venture-stage, growth equity and middle market firms • Companies with at least $5 to $10 million in LTM revenues • Companies with a defined path to profitability and the ability to become cashflow positive within 18 months. Second Alpha is particularly interested in companies that have a large portion of their businesses based on highly-recurring revenue models (e.g., subscriptions, term licenses, highly-recurring transactional models, etc.).While officially sector-agnostic, Second Alpha primarily invests in companies with a TMT (Technology, Media and Telecommunications) orientation. Second Alpha primarily invests in companies headquartered in the United States and Canada. Occasionally, Second Alpha will consider investments in private companies headquartered in other countries. Second Alpha is very interested in the following types of transactions: • Purchases of partial or full shareholder positions from founders or company management • Purchases of partial or full shareholder positions from angels, VCs, corporate investors or private equity firms • Purchases of convertible debt • Leading or participating in rounds of fresh capital in tandem with a purchase of shares from existing investors • Recaps, pay-to-plays and restructurings In addition, Second Alpha will consider purchasing portfolios, partial portfolios or specific strips of direct venture investments from investors seeking short-term liquidity.
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Best Software Services for Regulated Businesses
Sentronex Limited Company: Sentronex Name: Joe Sluys Email: joe.sluys@sentronex.com Web Address: www.sentronex.com Address: 42 Southwark Street, London, SE1 1UN Telephone: +44(0)20 7397 7400
Sentronex delivers reputable and personalised managed IT services to London-based, FCA regulated firms in the financial sector. We were in touch with them about their award and the workings that contributed to their success.
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At Sentronex we believe in offering bespoke IT solutions that are tailored to our clientsâ&#x20AC;&#x2122; needs. The core services that we offer are application and software development, disaster recovery, infrastructure, IT support and financial systems consultancy. These can be cross-sold, giving Sentronex clients the opportunity to take as many or as few as they require. Within alternative investments Sentronex has a strong presence working with futures and options. We find that there is a wider diversity of activities in alternative investments, with more variances in business models and new complex regulations which require a deeper understanding. In order to be able to best advise our clients, it is necessary to keep up with these nuances. Keeping up to date with financial technologies and their impact, as well as regulatory changes, will be paramount to staying at the forefront of this sector. Our range of software solutions will continue to evolve to meet regulatory needs. We make it our absolute priority to understand the exact needs and requirements of a Financial Services (FS) businessâ&#x20AC;&#x2122; systems and platforms, as well as the pressures they face, before building the right solution and delivering the necessary IT services. When delivering our services to a different sector, such as Media and PR for example, we apply the same rules. In 2014 Sentronex acquired software house Factonomy, a business focussed on solutions for the FS market, with an impressive client base and award-winning technology. This acquisition allows Sentronex to provide a bespoke user experience to our customers through a personalised software platform that considerably improves the application development process. As for the industry, the OTC trading requirements present both challenges and opportunities. Sentronex is increasing the range of software products in our portfolio to deal with some of these issues. There are also opportunities within these investments for clients who want to have a competitive edge. Sentronex is really pleased to be the winners of the Alternative Investment Awards for Best Software Services for Regulated Businesses. Our acquisition of Factonomy allows us to offer a platform which empowers business analysts to deliver enterprise class applications in a browser-based environment without requiring programming skills. Given the reputation and reach of the Wealth and Finance awards, we are incredibly thankful to them for recognising our efforts, and to our clients for their continued support. As we move further into 2015 and beyond, Sentronex plan to expand our services internationally, with the challenge of building a brand that is as well recognised and trusted as it is in London, and adapting to the different regulations of different countries. Competitive price pressure and commoditisation from global players are challenges that we, and the IT services sector as a whole, face; as are unanticipated technological changes.
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Best Tech, Media & Entertainment VC â&#x20AC;&#x201C; USA & Full Service Venture Capital Firm of the Year - North Carolina
SierraMaya360 Company: SierraMaya360 Name: Amish Shah Email: amish@sierramaya360.vc Web Address: www.sierramaya360.vc Telephone:201-452-8496
SierraMaya360, previously know as Sierra Maya Ventures, are an early-mid stage investment venture capital firm that is bridging Hollywood, sports, technology and beyond. Some of their investments include Lyft, Mattermark, Wefunder, Sidestep, Liquidspace, TopFan and top drone company Skycatch. We spoke to them to find out more.
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Venture Capital is the top performing alternative investment class of the last 20 years, providing an average of 30% IRR for the top tier. Since we’re smaller we expect to provide larger returns to our LPs. We differentiate ourselves through a focus on Hollywood and sports, not just technology-based investments, and we have a strong hold in the media/entertainment industry in the Los Angeles (Silicon Beach) scene. We’re also connected with A-listers, celebs and key influencers in the sports world, giving us an unfair advantage when it comes to helping early-stage start-ups get the right celeb/ athlete behind their company as an investor, advisor or endorser. We feel everyone should have 10-20% of their portfolio in alternative investments and in a venture capital firm that they feel is unique and different and which offers co-investment opportunities on specific deals. At SierraMaya360 we have access to top deals from early-late stage deals for our LPs and a co-investment vehicle setup, which is one of the main reasons they invest into our fund. Our first fund has a 5x ROI and 150%+ IRR (unrealized returns) in less than two years. We’ve also established ourselves in a unique way, bridging Hollywood, sports and technology. We have a partner in LA that’s been on TV 6,000 times and has trusted relationships with major celebs, which gives us an unfair advantage. One of our partners also owns a top high-tech recruiting firm so we know how to help the companies we back with top-tier talent, which is crucial for them to scale. Nevertheless, we were one of the first early-stage investors in the drone industry in a company called Skycatch which is leading the way in the energy/construction commercial industry focused on the data that’s raising a large Series B. We added the Sports Vertical Focus a few months ago, as we believe that Hollywood and sports are one degree of separation. We have always worked closely with top level athletes, agents, managers as we’ve consistently seen the incredible synergy between Hollywood and the sports world growing stronger while the technologies of Fanduel, DraftKings, SeatGeeks and others emphasize the importance of our Sports Vertical focus. In fact, we are now on track to more than double the Venture Capital in that industry in 2015. We’ve signed partnerships with major sports groups, teams just as we did with celebs in Hollywood and are one of the first to break the code and bring Silicon Valley (tech) and celebs/sports together in the correct manner. We were very excited to win the award as a follow up to our Top Newcomer in Venture Capital award in 2014 for North America. It shows validation of our value proposition after all the hard work put in by everyone at SierraMaya360 and all the amazing founders we back in our portfolio.
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Best Asset Manager in South Korea
Company: SPARX Asset Management Korea Co. , Ltd. Name: Jae-Ha Jang Address: 19F, Two IFC, 10 Gukjegeumyung-ro, Yeongdeungpo-gu, Seoul, 150-945, Korea, Telephone: 822-570-1600 Overseas Marketing: Julie Kang Email: julie.kang@sparxkorea.com Telephone: 822-570-1672
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SPARX Asset Management Korea (previously Cosmo Asset management) established in June 1999 (“SPARX Korea”) as an investment advisory and turned to the asset management company in 2011. The firm has been the subsidiary of SPARX Group, the Japanese independent asset management group which is well-known as one of top hedge fund managers in Asia, since the SPARX group acquired the Korean investment advisory in 2005. SPARX Korea started with USD 60 million under management serving five domestic-based institutional clients. Today, the firm manages approximately USD3.5bn as of the end of April, 2015 for diversified clients from large public and private institutions, insurance companies to high-net-worth individuals. SPARX Korea is domestically renowned for managing a mandate for one of the world’s largest pensions for over 13 years. SPARX Korea’s mission is to be the centre of Korea investment intelligence while sharing with the group a vision to be the most trusted investment firm in the world. We believe successful investing requires discipline and a consistent strategy. When one or both are missing, emotional investing occurs and sub-par returns are likely. Our primary discipline focuses on identifying value gaps. We believe buying companies when there is an arbitrage opportunity (a value gap) between a company’s fundamental value and its market price offers a high probability of significant investment returns over time. Believing that investing is more art than science and thus, generating long term significant returns is not confined to a single method, we have crafted a number of strategies - all of which are applied in a consistent and disciplined manner - to appeal to a broad investor base. SPARX Korea offers clients three core strategies through a bottom-up fundamental approach to investing in Korean equities: Equity Active (Index Relative), Absolute Return (Long-Only/Long-Short), and Strategic Investment. Equity-Active is index relative long-only strategy with the objective to outperform the benchmark KOSPI. The strategy is currently offered as a segregated managed account. Absolute return strategy offers two types: i) Long-only strategy with the objective to seek absolute returns through stock picking and active management; ii) long-short strategy with the objective to seek absolute returns through fundamental long/short and technical pairing. Both are currently offered as a segregated managed account. Strategic investment is long-only strategy with the objective to seek long term capital appreciation through annualized above market returns by identifying undervalued opportunities utilizing a concentrated portfolio with limited trading. The strategy is currently offered to overseas investors through SPARX Strategic Investment Fund (Korea), an open-ended fund domiciled in Cayman Islands. Besides these strategies, SPARX Korea launched Value Power strategy early this year, which seek to look for a company which can be a survivor in a low growth economy, showing a sustainable growth. The uniqueness of this strategy is mapping approach. For example, studying investment cases in the past recession and the low growth era of Japan and selecting out similar companies among the listed stocks in Korea, which can be the winners in a low growth environment in Korea.
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Best Private Equity Manager - Minnesota
Spell Capital Partners, LLC Company: Spell Capital Partners Web Address: www. spellcapital.com Address: Spell Capital Partners, LLC 222 South Ninth Street, Suite 2880, Minneapolis, MN 55402 Telephone: 612 371 9650 Fax: 612 371 9651
Spell Capital Partners, LLC is an established manager of private equity and mezzanine capital based in Minneapolis, Minnesota. We got in touch with them about their company as well as their strategy of maintaining stable relationships they build with their clients.
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Founded in 1988, Spell Capital has over 25 years of successful industry experience. The principals of Spell Capital Partners are widely regarded as accomplished, experienced professionals with diverse backgrounds and successful investment track records. Currently, we are investing our fourth private equity buyout fund, Spell Capital Partners Fund IV. Additionally we are investing our first mezzanine fund, Spell Capital Mezzanine Partners. We enjoy solid, established relationships with both senior and mezzanine lenders and have well-established networks within accounting and law firms. Both our Private Equity and Mezzanine funds are overseen by executive advisory boards comprised of accomplished business and financial experts. We have the knowledge and skills to analyze performance, assess the strength of management teams, obtain the necessary financing and consummate transactions. Spell Capital Private Equity is engaged in the acquisition of controlling interests in well-managed, historically profitable industrial manufacturing businesses. We use our deep expertise in acquisitions and financing to collaborate with management and grow the businesses in which we invest – both internally and through add-on acquisitions. Spell Capital Mezzanine Partners provides subordinated debt and non-control equity to businesses in a variety of industries across the United States. We finance leveraged acquisitions backed by lower middle-market private equity sponsors, management and family driven ownership transitions, add-on acquisitions, recapitalizations and growth initiatives. In terms of Private Equity, Spell Capital is engaged in the acquisition of controlling interests in well-managed, historically profitable industrial manufacturing businesses. Our professionals leverage their extensive networks of industry relationships to identify promising acquisition opportunities and, with knowledge from decades of collective experience, analyze performance and management strength, obtain financing and consummate transactions. Drawing upon the strength of Spell’s experienced professionals, we are able to complement a management team’s capabilities and advise our portfolio companies in the areas of strategic planning, business and financial management, investment banking and strategic merger and acquisition opportunities. We function as management’s partner – taking the lead in structuring and capitalizing investment transactions and providing financing for growth, but maintaining only an advisory role in the management and operations of the business. We also provide mezzanine financing to lower middle-market companies throughout the United States, targeting businesses with EBITDA of $2 million and above. We invest in a variety of industries in companies with high-quality management, adequate revenue diversification, stable and growing end-market demand, defensible market positions and sustainable free cash flow. Our mezzanine partners benefit from Spell Capital’s: Experience: Spell’s investment professionals have long track records of successfully investing in lower middle market companies across a wide range of economic cycles. Responsiveness: Working directly with Spell’s decision makers ensures open communication and timely feedback, both before a transaction closes and when dealing with post-closing matters such as amendments and add-on acquisitions. Confidentiality: Spell understands and respects our partners’ need for confidentiality. We safeguard our partners’ private information, handling it with the utmost discretion.
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Best for Trust & Trustee Services - UK
STM Fiduciaire Limited Company: STM Fiduciaire Limited Name: Linda Nicol Email: linda.nicol@stmjersey.com Web Address: http://stmfiduciaire.je Address: P.O. Box 203 3rd Floor, Windward House, La Route de la Liberation, St Helier, Jersey JE2 3BQ Telephone: 01534 837600 Registered in Jersey Number: 32613 Regulated by the Jersey Financial Services Commission
STM Fiduciaire Limited is a Jersey based trust company providing trust and company services. It is part of the STM Group plc which is a diverse financial services group with offices across 5 European jurisdictions. We spoke to them about their company and how they place the client at the centre of their organisation.
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We maintain a geographically diverse client base providing administrative services to both private and corporate clients. The senior management have had a broad range of experience across various alternative investment classes to assist our clients in their investment objectives. From a trustee perspective, we have to make sure that we understand the investments we are making and the risks associated with that approach. This requires good working relationships with the investment advisors supporting the investment process. Through continual review and close working relationships with investment advisors we keep up-to-date on current trends. Also from the trustee’s perspective, we have to continually maintain our knowledge in respect of the additional ongoing reporting complexity with alternative investments as by their very nature have limited markets and prices when compared with conventional investments which do have readily available markets and pricing information. Even with the higher levels of complexity we are seeing that our clients are taking a keener interest in alternative investments as the more conventional markets are not delivering the returns that they are seeking . Our aim is to build a long term relationship with our clients. The key in this approach is having the right staff to do the work. We have managed to retain a strong team of professionals to ensure a consistently good service to our clients. We place the client at the centre of our organisation. Quite simply we never forget that it is our client’s wealth that we are looking after and this means that every decision we make with regard to their assets is focused on the client, their family, future generations, and their businesses. Importantly, we work closely with our client’s advisors to ensure that there is transparency and a clear understanding of what is happening and what the benefits will be. We pride ourselves on maintaining three key characteristics that enable us to deliver exactly what our clients need: • Strong, focused client relationships • Superb levels of knowledge and professionalism • An independent approach Winning this award is fantastic news. We owe our success to our people who are at the forefront of the business on a daily basis, finding the best solutions for our clients. Awards recognise professionalism ability and integrity amongst its peer group. Moreover, our clients gain comfort and confidence with a company that has demonstrated the ability to be recognised for its professional standards. At STM we are a highly professional team offering excellence in our service levels and believe that these levels should be both recognised and celebrated.
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Award for Innovation in Quantitative Investing
Sunrise Capital Partners LLC Company: Sunrise Capital Partners Web: www.SunriseETF.com
Sunrise is a pioneering alternative asset management firm that is now in its 36th year of investing. Founded in 1980, Sunrise has generated over $1 billion in wealth for its investors since inception and it continues to offer a range of compelling investment programs for individual and institutional investors alike in the form of on and offshore fund vehicles, separately managed accounts, and an actively managed ETF on which Sunrise sub-advises.
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Sunrise’s prestige comes not only from its compelling 35 year track record of successful investing and outstanding client service but from its ability to continue to stay on the leading edge of the alternative investment industry and remain valuable and relevant to global investors in 2015. This latter point is evidenced by the many awards Sunrise has won recently (contact Sunrise for details), the firm’s outstanding investment performance over the past 24 months, and the fact that the firm’s asset base has grown significantly over the past 12 months. A key to Sunrise’s longevity has been continually adapting and evolving all aspects of its business to ever-changing markets and client needs and improving its firm substantially since its 1980 inception. In the last several years, Sunrise has been particularly active in terms of modernization and as part of that process it has: substantially enhanced the investment strategy of its legendary flagship investment program, Sunrise Evolution (contact Sunrise for details); launched several new innovative investment programs including Sunrise U.S. Equity Optimized Growth (“EOG”) and Sunrise U.S. Equity and Bond Optimized Growth (“EBOG”) (contact Sunrise for details); launched a new website and a range of communication tools to increase the transparency of the firm and allow for better, more timely interactions between Sunrise, its investors and the investment industry generally; and more. The response to these modernization activities has been tremendously positive from both Sunrise’s investors and the industry-at-large. Another major development for Sunrise was when in July 2014 the firm began sub-advising on a first-of-its-kind actively managed ETF on Nasdaq in partnership with AdvisorShares (a prospectus and other details are available at www. SunriseETF.com). This offering, along with EOG and EBOG, has broadened a platform upon which Sunrise can now apply the tactical investment expertise it has developed over its rich 35 year history for a “retail” financial services industry sorely in need of innovation. In so doing, it is Sunrise’s goal to allow all investors to benefit from smarter, better diversified, alternative investment solutions that will enhance long term return by increasing overall portfolio returns and reducing overall portfolio volatility. This latest recognition is one of many awards Sunrise has received over the past 5 years. Sunrise believes that these awards are a testament to the firm’s strong investment performance and its ongoing commitment to excellence and even greater success in the future. Other recognition Sunrise has received includes: • Two nominations at the 2015 CTA Intelligence U.S. Performance Awards, one as “Best Diversified CTA Under $500M” and one as “Best Emerging CTA Strategy” • Two 2014 awards from Wealth & Money Management, one for “Best for Portfolio Diversification – USA” and one for “CTA Management Firm of the Year – USA” • Two nominations at the HFM U.S. Hedge Fund Performance Awards, one as the “Best Newcomer Equity Strategy” and another as the “Best Newcomer CTA Strategy” • Two nominations at the 2014 CTA Intelligence U.S. Performance Awards, one as the “CTA Management Firm of the Year” and on as the “Best Newcomer CTA Strategy” • A “Top 10 Ranking Award” from BarclayHedge for 2013 • A “Top 5 CTA Challenge Award” from Altegris for 2013
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Best for Absolute Return Derivative Based Solutions and Best Newcomer in Managed Futures
Drawing upon the unique synergistic backgrounds of the founders, Synchrony Capital has emerged as a leader in the alternative investment space. Wealth & Finance caught up with Founding Partners, Eric Lyons and Paul Lyons to discuss their investment management firm and how they stay ahead of the competition.
Synchrony Capital was “honored” to be named Best Absolute Return Derivative Based Solution and Best Newcomer in Managed Futures, says Eric Lyons, co-founder of Synchrony Capital. The firm, which was founded in December of 2012, invests on behalf of their clients from high net worth individuals, parents and grandparents to doctors and teachers. Synchrony Capital is a boutique investment management firm with a multi strategy investment focus. The firm maintains positions both long and short, primarily in equity, equity derivatives and managed futures. Synchrony Capital’s commitment to this strategy has generated returns of 91% within the last three years, while at the same time reducing risk due to the uncorrelated
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“We set out to find the most compelling opportunities, placing our wealth right next to yours.”
nature between asset classes within the portfolio. This approach within the context of a boutique firm perseveres focus, specialization and integrity. “The success of this fund is steadfast, disciplined commitment to the investment strategy; focusing on merging classic economic domain knowledge with the strength of quantitative measures. This has allowed us to create a portfolio that maximizes returns within a given risk budget. “We believe the best protection of principle and consistent growth across a broad time horizon is achieved by a multi strategy approach. Our successful investment strategy draws upon the synergistic backgrounds of the founders. In
addition, we take advantage of our tractable size, which affords us the agility to capture unique opportunities not always available to larger investment firms. “We find that the most distinct difference between the alternative investment space and the more traditional managers is identifying opportunity sets, which enhance returns beyond that of traditional strategies.” Synchrony Capital believes that asset size plays an important role in performance. Because Synchrony Capital is a boutique fund, the firm is uniquely positioned to gain exposure to non-traditional opportunity sets. This has placed Synchrony Capital among the top performing investment managers. “Our ability to be agile affords our investors a wonderful opportunity to earn returns that not only meet objectives and are riskadjusted, but that are among the highest available in the capital markets.” One of the principle advantages that alternative investments present over traditional mutual funds is their unconstrained nature. In the world of alternative investments, managers have the ability to pursue the highest risk-adjusted returns. However, the alternative investment space is changing in fundamental ways. The rise of institutional capital flowing into alternative investments has created mega firms that struggle to outperform many of the smaller management firms. Due to this, many of the investment management firms with a smaller asset size continue to generate real alpha for their investors. This is perhaps one of the greatest strengths of Synchrony Capital. “We employ proprietary algorithms for our risk management strategy. This approach helps us reduce transaction costs and hedge against direct or indirect tail risks to the portfolio. Additionally, our focus on trade execution enables us to lower trading costs for the benefit of our clients.” The core achievement of the fund has been the development and validation of investment strategy along with the unique backgrounds in mathematical finance and medicine held by the founders. Additionally, “we aim to deliver superior, long-term results for our clients by seeking to filter out market noise and focusing on what matters most.”
Contact name: Eric Lyons, Paul Lyons Website: www.synchronycapital.com Tel: + 1 (857) 265 6753 Address: 5 Gildersleevewood Charlottesville, VA 99205
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Best Independent Asset Manager - France
Syquant Capital Company: Syquant Capital Website: www.syquant.com Name: Carl Dunning-Gribble Tel+331 42 56 56 28 Email: carl.dunning-gribble@syquant.com Julien Vanlerberghe Tel:+331 42 56 56 32 Email: julien.vanlerberghe@syquant.com
Founded in 2005, Syquant Capital is an independent asset manager based in Paris, France and accredited by the French regulator AMF. The firm focuses on ‘absolute performance’ exploiting arbitrage opportunities in equity markets (US, Europe & Canada) and offers its investment style through the Helium Opportunities, the Helium Performance and Helium Selection funds. The firm handles a total of US$ 790million AUM across the different funds, focusing on equity arbitrage strategies: merger arbitrage, event driven and some complementary quantitative long/short strategies. Strict risk management and a strong attention to maximum draw down are part of the firm’s DNA and 85% of the investor base are institutional investors (incl. Family Offices).
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Profile theFunds Funds Profil ofofthe Return Targeted
> 12%
Helium Selection
> 6%
Helium Performance Helium Opportunities Volatility Targeted 1% to 2%
≈ 4%
≈ 8%
The various Helium funds have different performance objectives & Risk profiles: (see table above)
The Helium Opportunities Fund offers a strategy mix of different equity arbitrage strategies to achieve a high Sharpe ratio. With a performance target of L+300bp / L+400bp and a realized volatility of 1%, the Helium Opportunities fund is now in a ‘sweet spot’ for investors looking for low volatility / low risk alternatives in their ‘Cash+’ allocations. With a historic Sharpe of 3, this fund is now solidly anchored in the ‘Cash+’ with many institutional investors. The Helium Performance fund offers a different strategy mix to offer a Sharpe ratio > 1.5 with a performance target >6% and an average volatility of 4%. As compared to the Helium Opportunities Fund, the fund manager will apply leverage to each of the equity arbitrage strategies (average x1.75) and has added a complementary systematic Long / Short strategy ‘Stock Selection’. All funds are UCITS regulated and have consistently achieved their risk adjusted return targets and/or Sharpe ratios.
Main distinguishing features Helium Opportunities
Helium Performance
Helium Selection
EONIA +3% to 5%
> 6%
>12%
Volatility Targeted
1% to 2%
≈ 4%
≈ 8%
Inception Date
Sept. 2009
May 2013
Oct. 2014
4.27%/y
6.30%/y
11.40%/y
Leverage
-
x1.75
X2.5
Net Equity Beta
-
0.15 avg
0.3 avg
AUM April 2014
$ 604M
$ 166M
$ 3.4M
Targeted Return
Perf. since inception
Equity Strategies Merger Arbitrage
Event Driven
Systematic L/S: - Mean Reversion - Stock Selection
Nine investment professionals (including five senior portfolio managers with over 15 years professional experience each) have a specific strategy focus and the CIO (Henri Jeantet) and the Co-CIO (Xavier Morin) share the responsibility of weighting the different strategies and the leverage in the different Helium funds.
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Award for Innovation for Insurance-Linked Securities & Independent Insurance Investment Manager of the Year - Switzerland
Twelve Capital Company: Twelve Capital Name: Joshua Rosen Email: joshua.rosen@twelvecapital.com Web Address: www.twelvecapital.com Address: 23 Hanover Square, London, W1S 1JB, United Kingdom Telephone: +44 203 693 5265
Twelve Capital is an independent investment manager with an exclusive focus on insurance investing. Twelve Capitalâ&#x20AC;&#x2122;s investment capabilities range from liquid and private transactions in collateralised reinsurance (Cat Bonds and Private Insurance-Linked Securities (ILS)) to debt (including public debt, private placement bonds and bilateral loans). The firm offers access to these comprehensive investment opportunities through fund solutions or tailor-made mandates. Twelve Capital was founded in 2010 and is majority owned by the partners of the firm. Its client based includes public and corporate pension funds, family offices, banks, corporations and fund of funds.
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Twelve Capital is a leader in insurance investing and the largest dedicated investor in insurance debt. As Twelve invests a significant amount of assets on behalf of our clients across the balance sheets of insurance and reinsurance entities, we are a major facilitator of financing for these organisations and therefore not only help to drive convergence of (re)insurance and capital markets, but also bridge traditional and alternative investments in the insurance space. Leveraging our dedicated expertise and broad access to investment opportunities supports the team’s constant efforts to extract superior and sustainable risk-adjusted returns for our clients. Working in this industry also presents a number of unique opportunities. Insurance-Linked Securities provide returns with low correlation to wider financial markets, complementing traditional and other alternative assets. In addition, the asset class exhibits favourable characteristics like low duration, contained counterparty risk and unrivalled intra-asset class diversification potential among various perils. As in the traditional space, alpha generation is largely driven by our proprietary analytical capabilities. Despite a challenging market environment, Twelve has enjoyed a considerable amount of success over the past 12 months. First and foremost, the firm has seen strong absolute and relative performance across all portfolios and, on the back of such strong performance generation, we have experienced continued and substantial growth in assets under management. As well as this, Twelve has completed the successful launch of our Insurance Private Debt strategy and the proof of concept and launch of our Best Ideas strategy, which aims to leverage the team’s insurance investing expertise across the whole (re)insurance balance sheet to exploit best relative value in the insurance space. And, of course, winning this award is also substantial recognition for the hard work of the whole Twelve Capital team. We are grateful for the award and very much appreciate the recognition. Such success is only possible thanks to the trust of our clients and the dedication of our highly skilled people. Furthermore, we view these successes not only as the result of hard work, but also as a platform to move Twelve Capital forward. Given our skills-based approach, we continue to expand the team’s capabilities, and through innovation we continue to explore structural inefficiencies in insurance-related assets whilst, at the same time, making these investment opportunities accessible to our investors. At Twelve, we constantly strive to ensure that our firm offers clients the best possible service at all times to enable them to reach their goals. When looking for a firm such as ours to work with, clients should obtain a clear view of the added-value from partnering with such an asset manager. Specifically, the capabilities of the asset manager and how those are translated into tangible-results should be a key criterion in the selection process. At Twelve Capital, we pride ourselves on being exclusively focused on the insurance sector and, as such, we offer unique and carefully selected investment opportunities yielding systematically attractive returns. Our added value is Twelve’s pool of talent which focuses on generating superior returns for our clients via a multi-pillar, well-governed and repeatable investment process. Agility is particularly important within our industry, given the changes we see occurring over the coming months and years. The overall macro environment is a low-yielding one and, as a result, investors will continue searching for investment managers that are able to deliver superior returns over the next 12 months. For us, this is yet another excellent opportunity to prove to our clients that through Twelve’s unique access in the insurance sector and intellectual capacity, we can achieve such returns in excess of market expectations.
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Award for Excellence in Capital Preservation - New York
Varadero Capital, L.P. Company: Varadero Capital, L.P. Name: Fernando Guerrero, Managing Partner and CIO; Jonah Lansky, Portfolio Management Email: IR@varaderocapital.com Web Address: www.varaderocapital.com Address: 1095 Avenue of the Americas, 26th Floor, New York, NY 10036 Telephone: (212) 715-6800
Varadero Capital, L.P. is an alternative investment management firm that seeks to capitalize on investments across the specialized credit markets. The Firm has directed value-driven investments across a wide variety of sectors in these markets since its inception in 2009. Based in New York and employing 16 individuals, the firm invests on behalf of a global investor base that includes pension funds, endowments, foundations, insurance companies, HNW/family offices and private banks. The firm currently manages over $1 billion in discretionary capital. We spoke to the firmâ&#x20AC;&#x2122;s Jonah Lansky about their award win and the challenges and opportunities facing the firm in 2015 and beyond.
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At Varadero, the team actively searches for differentiation by identifying niche opportunities across the credit market sub-categories. The firm invests in commercial and residential mortgage-backed securities, asset-backed securities and whole loan pools including consumer, mortgage, and small business loans. The firm utilizes a variety of derivatives as a means to hedge interest rate, credit and volatility risks across its portfolios, protecting performance and delivering returns across various rate and volatility environments. As an alternative investment firm, we view part of our mandate to be finding investments that provide our LPs an ‘alternative’ to the broad markets. We view the investments we make, and the asset classes we trade, to be part of our differentiation. Ultimately, we look to preserve principal, and if we can do that while providing returns with low correlation to broad equity or fixed income markets, all the better. Of course, inherent in our industry are a number risks and risk management is in the DNA of the entire investment team at Varadero Capital. Specific things that we take into consideration include: • • • • • • • •
Keeping investment concentrations proportional to conviction and the expected return of each trade Monitoring the liquidity profile of the overall portfolio against event risks Monitoring overall leverage Credit risk e.g., direct and indirect risk of default of the underlying borrower(s) Reviewing stress test results to minimize the potential loss the positions in the investment portfolio could generate Asset/liability matching (e.g., investments versus the amount of capital available to finance these investments) Counterparty risk (with respect to derivatives) Reputational risk
This approach is one that has yielded consistent results, not just for our LPs but for our overall business. Over the past 12 months, we have received a number of prestigious awards and completed a series of initiatives and projects that will see us well placed to continue to lead the way in our industry as we move further into 2015 and beyond. These initiatives and accolades include: • • • • • •
Varadero Capital successfully launched and completed the first closing of a draw-down fund that invests in consumer loans, originated by LendingClub Varadero Capital, together with a long-term investment partner, launched a successful (and differentiated) bid for a portfolio of U.S. commercial real estate loans 2014 – Winner – ‘Award for Excellence in Capital Preservation’ by Alternative Investment Awards 2015 (hosted by Wealth and Finance International) 2014 – Winner – ‘Best Relative Value Credit Fund of 2014’ by Investors Choice Awards 2015 (hosted by HedgePo) 2014 – Winner – Global Emerging Manager of the Year Award for 2014, ‘Best Credit Fund’ by S&P Capital IQ and New Legacy Group 2014 –‘Top 10 Award for Fixed Income – Diversified Fund for the Year 2014’ by BarclaysHedge
At Varadero Capital, we believe that awards of this nature highlight the work of many alternative investment managers that may not necessarily have the attention of the global investing community at large. We are truly humbled to be recognized with the ‘Award for Excellence in Capital Preservation’ and would like to extend our sincerest gratitude. Preservation of capital is something that is very near and dear to the heart of our founding partner and CIO, Fernando Guerrero, and he instils this mentality in each and every member of the firm. Also close to the hearts of everybody within our firm is the idea that our LPs are the backbone of our business. We are in regular dialogue with each of them and encourage face-to-face meetings, particularly for portfolio/risk monitoring/performance review. We also provide regular monthly updates via detailed performance reports (including risk, exposure, asset allocation, concentration, liquidity, leverage and attribution) with periodic market developments/ commentary. Building this partnership with our LPs is paramount to the success of our business. Each client is different, with individual goals and restrictions and understanding these differences requires an open and ongoing dialogue between the parties. Once these principles are established, we are able to highlight some of the things that make our firm different and to demonstrate the ways in which we align ourselves with the prospective client. Varadero Capital also prides itself on its client-friendly culture, whose highlights include: • • • •
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Fiduciary duty – simply put, this means that our clients’ interests always come first Alignment of interest – our principals and employees have a significant amount of their personal wealth invested, and therefore tied to, our firm’s performance Independent board – Varadero Capital has implemented a separate, independent board of directors for our flagship offering Independent valuation committee – Varadero Capital obtains third-party pricing for the majority of the assets in which it invests and has retained a valuation agent to calibrate those valuations. The investment team is separated from the valuation process, providing independence while minimizing conflicts of interest Knowledge level of the management team in the asset classes in which we invest – the management team at Varadero Capital has over three decades’ experience in underwriting and investing in these assets.
When it comes to marking ourselves out from the competition, there are several factors that give us a competitive advantage over other managers in our space, namely differentiated strategy, investment and risk philosophy, long-tenured team and proprietary technology. Varadero Capital utilizes a team approach, which we believe greatly limits the dependence on a single individual. We also have a stated principal to limit growth/capacity because we believe that managing a smaller pool of capital generally permits more attractive investment opportunities.
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Our historical performance track record in delivering consistent returns, which has been recognized with this award, is testament to our investment process. We will continue to source ideas from a broad universe of investment possibilities, employing our proven set of quantitative and qualitative variables to evaluate these opportunities. A consistent theme underlying our investment process is the preservation of capital. Unexpected market events do, and will continue to, occur with some frequency. Taking this into account, we believe that the best opportunities today lie in both legacy paper and the new specialty finance marketplace. Structured credit generated great returns in 2012 and 2013, and continues to provide interesting opportunities. While the yields available on certain structured credit bonds are lower today, on an absolute and relative basis, the asset class still offers attractive risk-adjusted returns compared to other fixed income sectors. New banking regulations (whether itâ&#x20AC;&#x2122;s Dodd-Frank, Volcker Rule or Basel III) are particularly targeted at structured credit; capital rules mean that less market-making capital will be devoted to more complex and generally less liquid segments of the market. These regulations impede a bankâ&#x20AC;&#x2122;s participation in the sector, which means enhanced opportunities for pools of private capital, like Varadero Capital. Further, hedge funds are by far the best avenue for assessing the structured credit market as their professionals have the modelling expertise to extract value from these assets. The overall result is a sector with less competition, where investors with the tools to analyze and research these complex and opaque bonds can capture incremental yield. This combination of less competition with greater complexity translates into genuine opportunities to generate excess return, as well as significant price disparities of bonds with similar risk profiles. In legacy paper, opportunities exist in a variety of sectors, including non-agency residential mortgage-backed securities, whole loan non-performing residential mortgages, student loans, trust preferred securities, commercial real estate collateralized debt obligations and commercial mortgage-backed securities. The yields achievable and risks vary but in many cases should have a high probability of no principal loss. Over $350 billion of 2005â&#x20AC;&#x201C;2007 vintage CMBS 10-year loans will mature in the next three years. So while prices have increased and spreads tightened across the CMBS capital structure, there are still opportunities in legacy CMBS deals as these securities near maturity and refinancing challenges will occur. Also, regulation has halved Wall Street dealer CMBS inventories over the past two years, creating potentially attractive entry points for nimble capital that can underwrite and price both the asset level risks and complex options in these capital structures during market sell-offs. The rise in non-bank lending platforms has been growing rapidly in recent years; however, it only recently grabbed the attention of institutional investors. Leading to the rise of these platforms: (a) regulatory arbitrage; (b) technology; and (c) a favorable macro environment. Regulations written in the wake of the last recession were designed to protect consumers, but have had the unintended consequence of increasing the cost for traditional banks, which further hampers their ability to compete. The new lenders use technology to their advantage, which accounts for a proportion of the cost savings for borrowers. New lenders have developed an incredible amount of data on borrowers. They can continue to refine their underwriting to more appropriately price risk. Decisions are made rapidly and the applications are online, allowing for scale in a way that no traditional bank can achieve. The addressable market for marketplace lenders is massive. This marketplace lending encapsulates loans to consumers, small businesses, equipment finance, auto loans, student loans, mortgage origination, mortgage servicing and commercial real estate. Varadero Capital has been investing in this space since Q3-2013, and is currently evaluating numerous investment platforms across these different sectors.