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100 |
Second Generation Hedge Funds |
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Hedge fund managers coming out of major hedge fund groups can get good attention and assets early, but they only grow assets in year two when the 2nd generation managers show that they can produce competitive returns (See entry 71 (Falcon Edge Capital), and 25 (Panning Capital Management)). Richard McGuire, formerly of Pershing Square Capital, founded Marcato Capital Management in 2010, and has shown the way. In his third year assets went from $1bn to $2.8bn.
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99 |
BlueMountain Capital Management |
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Perhaps the large hedge fund group with the most consistent high growth over the last year, BlueMountain’s asset base is up over 60% in the last year to $14.4bn (plus $3bn in CLOs). The credit specialists have offices in New York and London, and this year opened an office in Tokyo. It is understood that the new office is more about establishing relationships to sell product than managing Japanese/Asian bond portfolios.At the end of 2013 efinancial careers reported that the 25 London staff and 3 partners of BlueMountain were the best paid hedge funders in the city.
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98 |
Platinum Asset Management |
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The Platinum International Fund run by Kerr Neilson has an impressive track record reflected in over $10.08bn in the fund, out of firmwide assets of $16.5bn. Over the year to February the fund was up over 40%, but the fund is not the only winner in the stable. The award-winning Platinum European Fund is up 37.6% over the same period, and the two sector funds have done equally well – the International Technology Fund is up 46% and the International Healthcare Fund is up 43% in the last 12 months. All this is a payoff for a re-structuring of the investment management team in Sydney over the previous two years, as CEO Neilson has passed on the role of CIO to Andrew Clifford, and the investment team has expanded to 27 people whilst maintaining the integrity of the investment process. A job well done.
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97 |
III Offshore Advisors |
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III are clear winners from the inaugural Investors’ Choice Awards held in London last week. Two funds managed by III Offshore Advisors were awarded best in class for 2013. III Fund Ltd. (Series 1) was named the best Fixed Income Arbitrage Fund, and III Credit Opportunities Fund Ltd. (Seed Series), was named the best Long Biased Global Credit Fund. For 2013 III Fund Ltd. was up 13.44%, and III Credit Opportunities Fund LP was up 13.74%. The selection process for these awards incorporated qualitative criteria into the selection process as well as the usual quantitative performance measures. The qualitative criteria used cover the investment process, risk management framework and depth of research team.
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96 |
Eton Park Capital Management |
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“Eton Park, one of the year’s best-performing hedge funds, plans to lower management fees and create a more liquid share class,” reported Reuters late last year. It is impossible to image those two clauses strung together before the events of 2008/9. It is emblematic that fee pressure has struck Eric Mindich’s firm. The launch assets of the fund in 2004 were $3.5bn, and the sheer scale of demand from investors then enabled the neophyte hedge fund managers to impose lock-ups of more than 2 years. But we are a whole decade on from 2004, and we aren’t in Kansas anymore, Toto.
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95 |
Lansdowne Developed Markets Fund |
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Peter Davies and Stuart Roden run the largest European equity hedge fund, with nearly $10bn under management. It is remarkable that such a large fund can still pick up performance awards, but the Lansdowne Developed Markets was the winner in the global equity category in the EuroHedge awards, given for risk-adjusted return rather than absolute return. The fund was up 33.1% in 2013, and is up 2.92% so far in 2014 after one up month and one down month.
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94 |
Corvex Management LP |
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Keith Meister’s Corvex celebrates its 3rd birthday this month, and it should be champagne all round as it has broken into the ranking 100 largest US hedge funds, with over $5bn AUM.Meister learned his trade at Icahn Enterprises, and has learned his lessons well. After 8 activist campaigns Corvex (in combination with Soroban Capital Partners ) is having a tilt at $24bn mkt cap energy business Williams Cos. Although Corvex states that it “engages in value-based investing across the capital structure in situations with identifiable catalysts” it does not mind being the catalyst itself. Having entered the top 100 ranking Corvex has done so with a bullet.
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93 |
Merchant Commodity Fund |
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At one time Aisling Analystics’ Merchant Commodity Fund was amongst the largest dedicated commodities funds on the planet. No longer. But the outsize returns that got it to that position have recently come back. Over the last 12 months the managers have made a 33.3% return and are up 18.8% so far in 2014.
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92 |
Out of the Silo |
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There is an increasing trend for the more seasoned institutional investors in hedge funds to spread the hedge funds through their portfolios. That is, rather than treat hedge funds as an asset class, or as a component of the portfolio labelled “alternatives”, which is to define them by what they are not, pension plans are allocating within the asset classes. In this role hedge funds provide active management, alpha generation and diversification within, say “emerging market equities” or “mid-cap growth equities”. Another way this trend is conceptualized is as part of the construction of risk buckets with combinations of low cost indexation funds with higher-fee specific risk assumption. So the management of the total fees paid and the rational distribution of fees is a high priority.
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91 |
Neuberger Berman Absolute Return Multi-Manager Fund |
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According to Morningstar, the Fund’s Class A (NABAX) shares rank in the 10th percentile, over the year to March 3, 2014, out of 271 funds in its multi-alternative category. From inception through March 3, 2014, NABAX class shares rank in the 28th percentile. They are in the HOT 100 because AUM have just exceeded $1bn demonstrating that being available to retail investors, not charging performance-based management fees, offering daily liquidity, having lower investment minimums than typical hedge funds and giving full transparency of portfolio holdings can appeal to investors, particularly defined contribution retirement plans. |
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90 |
The Golvis Asia Opportunities Fund |
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The fund, run by Golvis Investment Pte of Singapore, started trading on Jan. 6 and is off to a flyer – up 38 percent in its first two months.The fund uses a multi-strategy approach with an initial focus on Japan. The fund will invest across the asset classes in Japan, taking account of CB experience in its leadership team.
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89 |
Barclayhedge |
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Amongst the dedicated hedge fund databases Barclayhedge is now the highest ranked by Alexa for website traffic, with its global ranking having risen by 108,000 over the last year and 16,000 over the last 3 months.
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88 |
Mini Primes for New and Emerging Managers |
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Most of the bulge bracket prime brokers have lifted the minimum fee levels for new clients.For these firms the going rate is $400-650K a year, with a few tolerating new clients at $250k p.a. This leaves a lot of room for the mini-primes to pick up the business of new hedge funds and those clients shed by the majors. Great business for the likes of Global Prime Partners and Linear Investments in Europe and ConvergEx Prime Services in the States.
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87 |
Lone Pine Capital LLC |
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For the second year in a row, in 2013 Steve Madel’s Lone Pine made more money in absolute dollars for his investors than any other hedge fund management firm.The firm made $5.2bn for investors on a hedge fund asset base of $8.4bn at the beginning of 2013, according to a study by LCH Investments. The gains generated include returns from long-only mandates.Mandel made $4.6bn for his investors in 2012.
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86 |
Napier Park Global Capital |
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Having an exceptional year is one thing, but sustaining excellence is much harder. So that Napier Park Global Capital was named Credit Manager of the Year by EuroHedge in 2012 and 2013 has to be recognised with a place in The Hot 100. The award was won specifically on the back of the risk-adjusted performance of the $345 million flagship European Credit Opportunities fund. The firm in total runs $6bn from offices in New York, London, Switzerland and Dubai, and stands out for constructing specific credit solutions for clients via managed accounts across the range of strategies, which in Europe includes high yield, leveraged loan, mezzanine, distressed assets and CLOs.
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85 |
Compliance staff |
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There have been a lot of regulatory initiatives in the last few years – FACTA, the JOBS Act, AIFMD, plus the normal roll out of the shifting focus of regulators’ attention (valuations, fixed income risk management, and fund governance to name but three).There has been a lot of form filling, filing, registration and meeting of deadlines for the first time for hedge fund management companies.All of this has had to be resourced, and as a result the costs of employing compliance staff is going up generally, but in the global centres for the hedge fund industry the salaries of senior compliance staff are noticeably higher (Y-o-Y), in some cases 20% higher.
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84 |
JAT Capital Management |
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John Thaler’s JAT Capital returned 31 percent last year, a pretty good return for an equity hedge fund. But when you understand that it was achieved with a 30% net exposure to markets, then stock selection must have added a lot of value within the 130/100 structure. Plus the gains of 2013 came after losing 19.6% the previous year and the firm suffering a halving of assets under management. The firm started 2014 with $2.2bn.
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83 |
Emerging Hedge Fund Managers |
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Having squeezed the pips with the large hedge fund managers, some American endowments and pensions are tooling up to allocate more capital to emerging hedge fund managers, recognising the relative performance potential of the smaller, more nimble managers.These investors have addressed the issue of thepercentage of overall AUM that they could represent with one manager, and are trying to be more flexible. In some circumstances they may be prepared to put aside the restrictions in their investment guidelines in order to obtain special terms (fees, liquidity and lock-ups).
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82 |
Hottest Social Climb |
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Noster Capital partner Christopher O’Neill and Princess Madeleine of Sweden wed in Stockholm, with Madeleine’s father, King Carl XVI Gustaf, giving her away. After the June wedding the couple returned to New York, where he works as Head of Research at the hedge fund and she at a charity founded by her mother.
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81 |
Egerton Capital |
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Egerton Capital has often been an early adopter. The firm was one of the first hedge fund management groups to set up in London. Egerton accepted long-only mandates in equities before most hedge fund groups. John Armitage recognised the potential of new capital sources for hedge funds, and the importance of using a platform to access that capital when it got together with Schroders to open the Schroders GAIA Egerton Equity Fund in 2010. That onshore L/S equity fund has over $1bn in assets, was up 22.63% over the last 12 months and has shown compound annual return since inception of 14.76%. AUM doubled at Egerton Capital in 2012-2013. Egerton Capital, which has generated US$8.1 billion in gains during its lifetime, including US$2.8 billion last year, and is closed to new capital.
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