Hedge Funds https://alpha-week.com/ en Anti-Greenwashing in the Spotlight: UK Firms Gearing Up for New Rules and Guidance https://alpha-week.com/anti-greenwashing-spotlight-uk-firms-gearing-new-rules-and-guidance <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>Anti-Greenwashing in the Spotlight: UK Firms Gearing Up for New Rules and Guidance</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-image--features.html.twig * field--node--field-image.html.twig * field--node--features.html.twig * field--field-image.html.twig * field--image.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-image field--type-image field--label-hidden field__item"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_style' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/styles/article_full/public/2024-03/ESG-2.png?itok=khRyoGQE" width="400" height="225" alt="ESG" typeof="foaf:Image" /> <!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Mon, 03/25/2024 - 11:38</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span><span><span>The UK’s Financial Conduct Authority (the <strong>FCA</strong>) has become increasingly concerned in recent years that some financial services firms are making sustainability-related claims which are exaggerated, misleading or unsubstantiated. Tackling 'greenwashing’ is therefore high on the regulatory agenda, and an area of focus for the FCA.  </span></span></span></span></span></p> <p><span><span><span><span><span>As part of this, the FCA has introduced a new ‘anti-greenwashing rule’, which is due to come into force on 31 May 2024. UK regulated firms will need to ensure that sustainability-related claims made by firms are clear, fair, and not misleading and are consistent with the sustainability characteristics of the product or service. </span></span></span></span></span></p> <p><span><span><span><span><span>The purpose of this new rule is to allow consumers to make informed decisions aligned with their sustainability preferences. The FCA also wants to create a ‘level playing field’ for firms with products which do represent a more sustainable choice and who make genuine claims about their products’ sustainability characteristics. </span></span></span></span></span></p> <p><span><span><span><span><span>The new anti-greenwashing rule is consistent with the FCA’s broader regulatory drive to improve the clarity and accuracy of firms’ marketing and communication. It dovetails with the FCA’s Consumer Duty, which came into force last year. This Duty places an obligation on UK regulated firms to act in good faith towards consumers and ensure that consumers are provided with information that enables them to make informed decisions.</span></span></span></span></span></p> <!-- THEME DEBUG --> <!-- THEME HOOK: 'filter_caption' --> <!-- BEGIN OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --> <figure role="group" class="align-right"><img alt="Jessica Reed" data-entity-type="file" data-entity-uuid="30612fb4-4b14-4958-ab4a-03369fed7cdb" src="https://www.alpha-week.com/sites/default/files/inline-images/Jessica-Reed.jpg" width="200" height="200" loading="lazy" /><figcaption>Jessica Reed</figcaption></figure><!-- END OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --><p><span><span><span><span><span>UK firms are also subject to separate rules on greenwashing enforced by the Advertising Standards Authority (the ASA) and the Consumer and Markets Authority (the CMA), who have both already published guidance relating to sustainability claims.</span></span></span></span></span></p> <p><strong><span><span><span><span><span>Which firms does the anti-greenwashing rule apply to, and what does it require? </span></span></span></span></span></strong></p> <p><span><span><span><span><span>The anti-greenwashing rule applies to all firms regulated by the FCA – no matter what their regulatory permissions or who their clients are.</span></span></span></span></span></p> <p><span><span><span><span><span>These firms must ensure that any references they make to the sustainability characteristics of their financial products and services are consistent with the sustainability characteristics of the product or service and are clear, fair, and not misleading.</span></span></span></span></span></p> <p><span><span><span><span><span>“Sustainability characteristics” relate to the environmental and / or social aspects of financial products and services. For example, a pension provider may refer to a pension fund as being “socially responsible”. Or a bank may refer to a mortgage as being “green”. </span></span></span></span></span></p> <p><span><span><span><span><span>From 31 May, the FCA expects any sustainability references in communications to be:</span></span></span></span></span></p> <ul><li><span><span><span><span><span>Correct and capable of being substantiated through evidence.</span></span></span></span></span></li> <li><span><span><span><span><span>Clear and presented in a way that can be understood.</span></span></span></span></span></li> <li><span><span><span><span><span>Complete – they should not omit key information and should take into account the life-cycle of the product or service.</span></span></span></span></span></li> <li><span><span><span><span><span>Fair and meaningful in relation to any comparisons to other products or services.</span></span></span></span></span></li> </ul><p><span><span><span><span><span>The scope of the rule is not limited to retail business. Products and services that are marketed only to professionals, including institutional investors, are caught by the new requirements. For example, UK authorised firms marketing a private fund in the UK to institutional investors would need to ensure that any private placement memorandum or information memorandum complies with the anti-greenwashing rule.</span></span></span></span></span></p> <p><span><span><span><span><strong><span>What guidance is available to help firms comply with the new rule? </span></strong></span></span></span></span></p> <p><span><span><span><span><span>The FCA has published draft guidance (</span><span><a href="https://www.fca.org.uk/publication/guidance-consultation/gc23-3.pdf">GC23/3</a></span><span>) to help UK regulated firms to understand the FCA’s expectations under the anti-greenwashing rule. This is due to come into force on the same day as the anti-greenwashing rule. However, simply applying the guidance will not provide a ‘safe harbour’. Firms need to consider carefully how the rules apply to their business and communications in order to ensure compliance.</span></span></span></span></span></p> <p><span><span><span><span><span>The guidance highlights that firms need to think hard about instances whereby the combination of wording and images of communications could give a misleading impression of sustainability characteristics. For example, firms should be wary of listing financial products next to “green” imagery (for example, a picture of a rainforest) when only one of the products has sustainability characteristics. Here, the imagery might misleadingly suggest that all the products are “green”. </span></span></span></span></span></p> <p><span><span><span><span><span>Firms need to take care with comparisons and ensure that they are “fair and meaningful”. Any claims should therefore make clear what is being compared, how a comparison is being made and should compare like with like. An example the FCA gives is that where a firm makes a claim that a car insurance product is the “greenest car insurance on the market” information must be provided to back up this claim and the communication should make clear how this conclusion was reached and what comparisons the claim is based upon.</span></span></span></span></span></p> <!-- THEME DEBUG --> <!-- THEME HOOK: 'filter_caption' --> <!-- BEGIN OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --> <figure role="group" class="align-right"><img alt="Edward Twigger" data-entity-type="file" data-entity-uuid="b581acc5-e934-4eaf-aa12-693ba72cbc40" src="https://www.alpha-week.com/sites/default/files/inline-images/Edward-Twigger_0.jpg" width="200" height="200" loading="lazy" /><figcaption>Edward Twigger</figcaption></figure><!-- END OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --><p><span><span><span><span><span>Firms must also ensure that they avoid claims that might be theoretically true but be misleading. For instance, if the proceeds of a bond are used to finance sustainability projects, it may be described as a “green bond”. However, where that bond’s proceeds are invested into making fossil fuel production more energy efficient, the FCA would not expect this to be marketed as a “green bond” as this would be contrary to investor expectations.</span></span></span></span></span></p> <p><span><span><strong><span>How are other UK regulators tackling greenwashing? </span></strong></span></span></p> <p><span><span><span><span><span>In 2021, the CMA published guidance for firms making environmental claims on goods and services. The CMA is able to take action against financial services firms for misleading claims under consumer protection legislation, although it would normally leave this to the FCA. Similarly, the ASA is also able to enforce the Committee of Advertising Practice’s (CAP) Code against firms making misleading advertising claims.</span></span></span></span></span></p> <p><span><span><span><span>In 2022, the ASA banned two HSBC adverts which had appeared on bus stops. The ASA said that HSBC must “<a href="https://www.asa.org.uk/rulings/hsbc-uk-bank-plc-g21-1127656-hsbc-uk-bank-plc.html">ensure that future marketing communications with environmental claims were adequately qualified and did not omit material information about its own contribution to carbon dioxide and greenhouse gas emissions</a>.”</span></span></span></span></p> <p><span><span><span><span><strong><span>What should firms be doing now?</span></strong></span></span></span></span></p> <p><span><span><span><span><span>UK authorised firms must review all their existing customer communications (whether marketing or not) to establish whether they are making any kind of sustainability claims. Firms should then take a hard look at how any sustainability claims may withstand scrutiny under the new rules and guidance. Is there evidence to back up the claims, and is it readily available? Clear coordination between firms’ sales, marketing, operations, legal and compliance will be key to achieving compliant communications.</span></span></span></span></span></p> <p><span><span><span><span><span>Linked to this, firms should review and strengthen their internal review processes for communications to cater for the anti-greenwashing rule. Communications should always pass through multiple lines of review, and firms may wish to consider whether additional checks may be carried out to avoid inadvertently breaching this new rule. Each firm’s relevant internal teams will need to work closely together to design and enhance internal processes for the approval of any communications and coordinate their messaging across different platforms and media.</span></span></span></span></span></p> <p><span><span><span><span><span>Firms might want to consider some consumer behavioural testing to assess whether communications could be considered by consumers to be misleading. This is something the FCA has already promoted as part of the Consumer Duty. </span></span></span></span></span></p> <p><span><span><span><span><span>The FCA has also reminded firms to check their sustainability-related claims regularly, as the underlying evidence could change. </span></span></span></span></span></p> <p><span><span><span><span><span>Once the anti-greenwashing rule is in force, we expect the FCA to monitor for signs of greenwashing from a range of sources. As well as monitoring firms’ financial promotions, the FCA will also monitor client complaints, intelligence gathered on the quality of firms’ regulatory applications, and broader supervisory intelligence.</span></span></span></span></span></p> <p><span><span><span><span><span>**********</span></span></span></span></span></p> <p><em><span><span><strong>Jessica Reed</strong> is<span> a Partner and </span><strong>Edward Twigger</strong><span> is an Associate at <strong><a href="https://www.farrer.co.uk/">Farrer &amp; Co</a></strong></span></span></span></em></p> <p><em>***</em></p> <p><em>The views expressed in this article are those of the author and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group</em></p></div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-tags--features.html.twig * field--node--field-tags.html.twig * field--node--features.html.twig * field--field-tags.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/alternative-credit-guest-articles" hreflang="en">Alternative Credit Guest Articles</a></div> <div class="field__item"><a href="/hedge-funds-guest-articles" hreflang="en">Hedge Funds Guest Articles</a></div> <div class="field__item"><a href="/private-equity-guest-articles" hreflang="en">Private Equity Guest Articles</a></div> <div class="field__item"><a href="/real-assets-guest-articles" hreflang="en">Real Assets Guest Articles</a></div> <div class="field__item"><a href="/venture-capital-guest-articles" hreflang="en">Venture Capital Guest Articles</a></div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10754&amp;2=bookmark" token="7nLFTZRA0U3myVqoiH_tKPTZ_idb9UOrsP3wKNhvHW4"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/jessica-reed-edward-twigger" hreflang="en">Jessica Reed | Edward Twigger</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">Public</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Mon, 25 Mar 2024 11:38:54 +0000 AlphaWeek Staff 10754 at https://alpha-week.com Silver Creek Capital Hires Michael Callahan as Managing Director, Business Development https://alpha-week.com/silver-creek-capital-hires-michael-callahan-managing-director-business-development <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>Silver Creek Capital Hires Michael Callahan as Managing Director, Business Development</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Thu, 03/21/2024 - 13:03</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span>Silver Creek Capital Management has hired Michael Callahan as Managing Director, Business Development. </span></span></span></p> <p><span><span><span>Callahan will be responsible for developing and executing a range of growth initiatives on a global basis and expanding the Silver Creek's institutional investor relationships. He most recently served as a Managing Director at Investcorp, focused on institutional capital raising for its global credit business.</span></span></span></p> <p><span><span><span>"We are delighted to welcome Mike Callahan to our leadership team," said Bob Ratliffe, Silver Creek’s President. “He has a strong track record of successful investor outreach and other strategic initiatives that will be invaluable as Silver Creek continues on its growth trajectory. We look forward to leveraging Mike’s extensive institutional relationships and deep market knowledge as we continue to build our investment platforms and to meet client needs.”</span></span></span></p> <p><span><span><span>“I am honored to join Silver Creek at this important time in its history,” said Callahan. “The Firm has built an impressive business across multiple asset classes and has significant potential to expand its relationships with investors on a global scale. I am excited to collaborate with our team to pursue a wide range of attractive business opportunities.”</span></span></span></p> <p><span><span><span>Prior to Investcorp, Callahan served as Senior Vice President, Business Development at Shenkman Capital Management. Earlier in his career, he held roles at Millburn Ridgefield Corporation, Fidelity Investments, and Scudder Kemper Investments (now Deutsche Asset Management (DWS)).</span></span></span></p></div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-tags--features.html.twig * field--node--field-tags.html.twig * field--node--features.html.twig * field--field-tags.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/alternative-credit-people" hreflang="en">Alternative Credit People</a></div> <div class="field__item"><a href="/hedge-funds-people" hreflang="en">Hedge Funds People</a></div> <div class="field__item"><a href="/real-assets-people" hreflang="en">Real Assets People</a></div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10745&amp;2=bookmark" token="DFp4HMQPDGoyz1pBUUvsS3pCg0CybN-5eUh8J9Hr7eg"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/greg-winterton" hreflang="en">Greg Winterton</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">AlphaWeek Basic</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Thu, 21 Mar 2024 13:03:18 +0000 AlphaWeek Staff 10745 at https://alpha-week.com Assessing the Potential of AI in Fund Services https://alpha-week.com/assessing-potential-ai-fund-services <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>Assessing the Potential of AI in Fund Services</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-image--features.html.twig * field--node--field-image.html.twig * field--node--features.html.twig * field--field-image.html.twig * field--image.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-image field--type-image field--label-hidden field__item"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_style' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/styles/article_full/public/2024-03/AI-Fund-Services.jpg?itok=4b_7HH55" width="400" height="225" alt="Artificial Intelligence" typeof="foaf:Image" /> <!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Mon, 03/18/2024 - 12:53</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span><span><span><span>Artificial Intelligence (AI) is transforming the financial services industry and providing new opportunities in the way investors and fund managers do business.</span></span></span></span></span></span></p> <p><span><span><span><span><span><span>From back-office automation and enhanced decision making to managing risk and portfolio optimisation, fund service providers are increasingly looking at the potential for sophisticated AI tools to help maximise returns and achieve investor goals.</span></span></span></span></span></span></p> <p><span><span><span><span><span><span>While the development and implementation of AI within fund administration is still in its early stages, it will undoubtedly become an indispensable tool. Despite its enormous potential, however, AI, needs to be deployed properly and used correctly, with a rigorous framework of checks and balances.</span></span></span></span></span></span></p> <p><span><span><span><strong><span><span><span>How is AI shaping fund services?</span></span></span></strong></span></span></span></p> <p><span><span><span><span><span><span>AI is a broad field concerned with the development of systems that can imitate human intelligence and problem-solving skills. Machine learning, a subset of AI, can access and process mass datasets to build an understanding of past behaviours in order to improve future outcome, while generative AI can be used to create new content including text imagery and audio.</span></span></span></span></span></span></p> <!-- THEME DEBUG --> <!-- THEME HOOK: 'filter_caption' --> <!-- BEGIN OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --> <figure role="group" class="align-right"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'entity_embed_container' --> <!-- BEGIN OUTPUT from 'modules/contrib/entity_embed/templates/entity-embed-container.html.twig' --> <div alt="Chris Day" data-embed-button="entity_browser_button" data-entity-embed-display="image:image" data-entity-embed-display-settings="{&quot;image_style&quot;:&quot;&quot;,&quot;image_link&quot;:&quot;&quot;,&quot;image_loading&quot;:{&quot;attribute&quot;:&quot;lazy&quot;}}" data-entity-type="file" data-entity-uuid="bde2f65a-728b-4e0d-807a-55ceb6871b6f" data-langcode="en" title="Chris Day" class="embedded-entity"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/inline-images/Chris-Day.jpg" alt="Chris Day" title="Chris Day" typeof="foaf:Image" /><!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --><!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --></div> <!-- END OUTPUT from 'modules/contrib/entity_embed/templates/entity-embed-container.html.twig' --> <figcaption>Chris Day</figcaption></figure><!-- END OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --><p><span><span><span><span><span><span>Despite the recent increase of public interest, AI is not a new concept. The idea of a machine functioning on its own is ancient, however it wasn’t until the 1950s and the publication of Alan Turing’s work “Computer Machinery and Intelligence” that the birth of AI occurred. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>Recent developments in AI are being applied within sectors that benefit from the automation of repetitive tasks usually carried out by humans. The theoretical benefits of this automation include a decrease in the risk of human error in data input, cost reduction, and increased productivity. Overall, businesses can gain greater efficiencies through the use of AI.</span></span></span></span></span></span></p> <p><span><span><span><span><span><span>In the financial sector, AI’s ability to mine big data is changing the way that service providers operate. AI’s ability to work quickly on huge volumes of information can allow services providers to tackle workload backlogs, completing tasks which provide low added value. This allows professionals to focus on more subjective tasks which provide higher added value. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>AI can also be used to improve fraud detection, assess and decrease risks and can be used for compliance.</span></span></span></span></span></span></p> <p><span><span><span><span><span><span>Generative AI, such as ChatGPT, has become a day-to-day companion in the professional lives of many. Its development has accelerated with the rise of other leading platforms such as CoPilot and Gemini. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>An increasing number of companies have developed their own generative AI tools to improve employee productivity and personal development. One common use case is providing employees with access to a secured AI powered assistant that can provide answers to almost all work-related questions, while using the best practices for keeping a company's sensitive data safe.</span></span></span></span></span></span></p> <p><span><span><span><strong><span><span><span>What is the potential of AI in fund services?</span></span></span></strong></span></span></span></p> <p><span><span><span><span><span><span>Asset management companies can use AI for their portfolio and risk management, using it to take a closer look at clients' portfolios. The high level of predictive analysis AI offers through the forecast of market trends, identifying trading opportunities and risk management can lead to higher returns with decreased risk. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>AI might also be valuable tool for Transfer Agents (TA), where many processes are data entry-heavy, especially the investor onboarding process. In addition, screening for hits and continuous checking of Anti-Money Laundering (AML) and Know Your Client (KYC) processes could benefit from the speed and scale of AI and its attention to detail and monitoring capabilities. Humans can intervene and decide, based on the outcome, whether additional manual action is required.</span></span></span></span></span></span></p> <p><span><span><span><span><span><span>As technology continues to develop, we expect to see AI managing more fund administration tasks including client and investor queries, generating and delivering regular performance data and analysis, directly automating and submitting regulatory reporting, and the use of voice to text AI assistance for taking minutes of meetings and summarising key takeaways.</span></span></span></span></span></span></p> <p><span><span><span><strong><span><span><span>Combining AI with the human touch</span></span></span></strong></span></span></span></p> <p><span><span><span><span><span><span>The expectation is that AI will enhance efficiency and productivity by undertaking more routine work and assisting with tasks like research. </span></span></span></span></span></span></p> <!-- THEME DEBUG --> <!-- THEME HOOK: 'filter_caption' --> <!-- BEGIN OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --> <figure role="group" class="align-right"><img alt="Inesa Pistolas" data-entity-type="file" data-entity-uuid="14d8c511-3495-44d2-ad5d-37333d7545d5" src="https://www.alpha-week.com/sites/default/files/inline-images/Inesa-Pistolas.jpg" width="200" height="200" loading="lazy" /><figcaption>Inesa Pistolas</figcaption></figure><!-- END OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --><p><span><span><span><span><span><span>This will free up fund administration teams to focus on the more complex work higher up the value chain. It will also give professionals more time to focus on human endeavours like developing relationships and client interaction; by their very nature these can't be replicated or replaced by AI. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>It is important that the industry continues to undertake research and development, to assess how it can maximise the benefits of AI. In the fund administration space, the anticipation is that AI will become supplementary to, rather than replace, the skills of a fund admin team. If anything, AI has the potential to free-up teams, allowing them to be even more client focused than they already are.   </span></span></span></span></span></span></p> <p><span><span><span><strong><span><span><span>What are the pitfalls of AI?</span></span></span></strong></span></span></span></p> <p><span><span><span><span><span><span>Of course, AI does not only bear gifts; it also brings threats and challenges. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>Firstly, there are data privacy and security risks. Since large amounts of sensitive financial data are handled by AI there is an increased risk of data breach incidents. Therefore, increased cybersecurity measures and enhanced data protection regulations are required.</span></span></span></span></span></span></p> <p><span><span><span><span><span><span>Further, AI algorithms lack human intuition and subjective judgment. AI lacks emotional intelligence, which is crucial to building trust with clients.  Focusing too much on AI and its outcomes might cause the handler to overlook unique situations in the market and unanticipated events, which do not follow predetermined patterns. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>Currently, these instances can only be prevented by human intervention. AI systems also need to be updated and to be compliant with new regulation criteria every time a regulation changes. </span></span></span></span></span></span></p> <p><span><span><span><strong><span><span><span>The future of funds and AI</span></span></span></strong></span></span></span></p> <p><span><span><span><span><span><span>AI is here to stay and change our lives – and the funds sector - immeasurably. However, it will not fully replace humans, as many fear or suggest. The most likely scenario is a hybrid approach, a symbiotic relationship between automation systems and humans where each party will complement the strength and weaknesses of the other. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>By handling repetitive tasks, AI allows humans to focus more on complex tasks that require critical thinking and decision making. The more developed AI becomes, the deeper this relationship will be. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>The way we decide to manage, use and live with it will shape our future in business and in life.</span></span></span></span></span></span></p> <p><span><span><span><span><span><span>**********</span></span></span></span></span></span></p> <p><em><strong><span><span><span>Chris Day</span></span></span></strong><span><span><span> is Global Head of Fund administration and </span></span></span><strong><span><span><span>Inesa Pistolas</span></span></span></strong><span><span><span> is Head of Operations, Fund Administration, Luxembourg at </span></span></span><a href="https://www.ogier.com/"><strong><span><span><span>Ogier Global</span></span></span></strong></a></em></p> <p><em><span><span><span>***</span></span></span></em></p> <p><em>The views expressed in this article are those of the author and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group</em></p> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-tags--features.html.twig * field--node--field-tags.html.twig * field--node--features.html.twig * field--field-tags.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/alternative-credit-guest-articles" hreflang="en">Alternative Credit Guest Articles</a></div> <div class="field__item"><a href="/hedge-funds-guest-articles" hreflang="en">Hedge Funds Guest Articles</a></div> <div class="field__item"><a href="/private-equity-guest-articles" hreflang="en">Private Equity Guest Articles</a></div> <div class="field__item"><a href="/real-assets-guest-articles" hreflang="en">Real Assets Guest Articles</a></div> <div class="field__item"><a href="/venture-capital-guest-articles" hreflang="en">Venture Capital Guest Articles</a></div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10741&amp;2=bookmark" token="ALNbe-_b--mQZLElLf_Ogrmm9N0wxEJyDY3uVoSTfpE"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/chris-day-inesa-pistolas" hreflang="en">Chris Day | Inesa Pistolas</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">Public</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Mon, 18 Mar 2024 12:53:22 +0000 AlphaWeek Staff 10741 at https://alpha-week.com South Africa’s Retail Hedge Fund Revolution https://alpha-week.com/south-africas-retail-hedge-fund-revolution <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>South Africa’s Retail Hedge Fund Revolution</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-image--features.html.twig * field--node--field-image.html.twig * field--node--features.html.twig * field--field-image.html.twig * field--image.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-image field--type-image field--label-hidden field__item"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_style' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/styles/article_full/public/2024-03/South-Africa-1.png?itok=jebdON-8" width="400" height="225" alt="South Africa" typeof="foaf:Image" /> <!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Mon, 03/18/2024 - 10:34</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The South African hedge fund industry seems to be in rude health, thanks in no small part to reforms to the regulatory treatment of hedge funds in the country. This month ASISA (The Association for Savings and Investment South Africa), South Africa’s asset management trade body, delivered its annual analysis of the state of the industry.</span></span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The numbers point towards increased retail investor participation in the market, thanks in no small part to regulatory reforms enacted in 2015.</span></span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>South African hedge funds </span></span><span><span>attracted record net inflows of R6.24 billion (USD 340m) in 2023 and grew its </span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>assets under management to R137.9 billion (excluding fund of funds), according to the latest figures out from ASISA. These assets are invested in 213 hedge funds, which are managed by 11 hedge fund management companies.</span></span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The</span></span><span><span> industry recorded healthy net inflows for the second consecutive year. Net inflows in 2022 amounted to R4.54 billion. </span></span></span></span></p> <p><span><span><span><span>Unlike many other markets, the retail investor plays a big role in the growth of the South African market. Note that in South Africa </span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">retail hedge funds are strictly regulated in terms of the investments and the risks that they are allowed to take and are open to all investors who can afford the average minimum lump sum investment amount of R50,000 (USD 2,600 approx).</span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">This still makes the average South African hedge fund much more accessible than its counterpart in many parts of the world. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">There is a second class of hedge funds, Qualified Investor Hedge Funds, which require a minimum investment of R1 million (USD 53,000 approx). They are open to investors with a solid understanding of the investment strategies deployed by hedge funds and the associated risks.  Hedge funds fall under the Collective Investment Schemes Control Act (CISCA) and are deemed regulated collective investment portfolios.</span></span></span></p> <p><span><span><span><span>According to </span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Hayden Reinders, </span></span><span><span>convenor of the ASISA Hedge Funds Standing Committee, and Head of Business Development for the Prescient Fund Services (an investment administration and platform business in South Africa), 32% of assets under management were held by </span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Retail Hedge Funds at the end of December 2023, while Qualified Investor Hedge Funds held 68% of assets. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Yet, the net inflows in 2023 were driven predominantly by the retail funds, which attracted net inflows of R5.1 billion. South African Qualified Investor Hedge Funds, on the other hand, recorded net outflows of R1.1 billion. </span></span></span></span></p> <p><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Growing awareness of hedge funds with retail investors</span></span></strong></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Reinders </span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">thinks that there is a growing awareness among retail investors that hedge funds are not high-risk alternatives to unit trust funds. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">“Hedge funds are one of the building blocks of a well-diversified investment portfolio to reduce market volatility,” he said. “</span><span><span>This hopefully indicates that hedge funds in South Africa are increasingly being accepted as an important investment tool in mitigating </span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">market volatility.”</span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Retail hedge funds in South Africa have also become more accessible to retail investors in recent years as investment platforms are increasingly willing to offer them to investors. In addition to increased marketing initiatives by some of the bigger hedge fund managers, solid performance has also resulted in greater interest from retail investors.  </span></span></span></span></p> <p><span><span><span><span>Judging from the net inflows, South African m</span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">ulti-strategy hedge funds were most popular with retail and qualified investors in 2023. Multi-strategy hedge funds are classed by ASISA portfolios that do not rely on a single asset class to generate investment opportunities but instead blend various strategies and asset classes with no single asset class dominating over time. </span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">This is the first time in at least five years that South African retail multi-strategy hedge funds outdid retail long short equity hedge funds in popularity. They attracted R2.27 billion in net inflows in 2023, while long/short equity funds recorded R2.13 billion.</span></span></span></p> <p><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Reinders concluded that the role and increasing trend of hedge funds in South Africa continues to be very positive.</span></span></span></p> <p>**********</p> <p><em><strong>Stuart Fieldhouse</strong> is a Director at <strong><a href="https://hawksmoorpartners.com/">Hawksmoor Partners</a></strong>, an Director at <strong><a href="https://www.thearmchairtrader.com/">The Armchair Trader</a></strong>, and a freelance writer</em></p> <p><em>***</em></p> <p><em>The views expressed in this article are those of the author and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group</em></p></div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10738&amp;2=bookmark" token="q6EtNGYY7RWbzp_Hx19nRis9cRXQXVd8J-IwYU_LfuA"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/stuart-fieldhouse" hreflang="en">Stuart Fieldhouse</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">Public</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Mon, 18 Mar 2024 10:34:56 +0000 AlphaWeek Staff 10738 at https://alpha-week.com Hedge Funds Suffer Heaviest Net Outflow To Begin a Year Since 2016 https://alpha-week.com/hedge-funds-suffer-heaviest-net-outflow-begin-year-2016 <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>Hedge Funds Suffer Heaviest Net Outflow To Begin a Year Since 2016</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Fri, 03/15/2024 - 11:30</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Investors removed $14.3bn from hedge funds in January, the second largest net outflow to begin a year since 2009, according to new data from Nasdaq eVestment.</p> <p>Long/short equity once again bore the brunt of the redemptions, with a net $6.42bn leaving these products in the first month of the year, continuing their run of bad form; the category also saw the largest net redemptions by dollars in 2021, 2022 and 2023.</p> <p>It's not all bad news, however, because Nasdaq eVestment says that the headline number doesn't tell the full story.</p> <p>"Looking back over this seven-year period of January’s data we see that outside the generally light flows indicated in the data, the proportions of products seeing net new money coming in has averaged around 50%. In January 2024 it was 42%, but there were other metrics that weren’t nearly as negative. For example, the proportion of products whose redemptions were greater than 2% of AUM was 24% and that level has been matched multiple times in the prior seven years and even exceeded in January 2019. Additionally, the % of products who lost greater than 5% of AUM was actually the lowest of any January since at least 2016. What’s making the January net outflow the largest since 2016 is the result of two factors, very few meaningful new allocations, which isn’t rare in January’s data, along with very few but large redemptions and a few smaller outflows," it says in its report.</p> <p>Despite the redemptions, overall industry assets increased, due to performance gains. $19.9bn was added to total assets under management in hedge fund world, which now stands at $3.515trn. Distressed ($0.81bn), convertible arbitrage ($0.12bn) and market neutral equity ($0.09bn) were the only three categories that delivered positive net asset flows to begin the year.</p></div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10736&amp;2=bookmark" token="vT2pnTSbjlMdjIsob-Hup5q0HWJiAI-VSeQ1pWXicGE"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/greg-winterton" hreflang="en">Greg Winterton</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">AlphaWeek Basic</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Fri, 15 Mar 2024 11:30:00 +0000 AlphaWeek Staff 10736 at https://alpha-week.com Kettera Strategies Heat Map - February 2024 https://alpha-week.com/kettera-strategies-heat-map-february-2024 <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>Kettera Strategies Heat Map - February 2024</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-image--features.html.twig * field--node--field-image.html.twig * field--node--features.html.twig * field--field-image.html.twig * field--image.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-image field--type-image field--label-hidden field__item"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_style' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/styles/article_full/public/2023-02/Kettera-Strategies.jpg?itok=MT_xYzdC" width="400" height="225" alt="Kettera Strategies" typeof="foaf:Image" /> <!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Tue, 03/12/2024 - 16:15</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The Style Heat Map below<em> </em>offers a snapshot for the month on all categories of strategies. For the month of February, the following summaries highlight four of the 10 style categories that we track. </span></span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Systematic Trend Programs</span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">February was an extremely profitable month for many, if not most, long-term trend programs. While historically the most profitable months are marked by a major crisis event that triggers most markets at once, February was unusually rich in different trends in varied markets - both long and short. The most notable gains were in the agricultural sub-sectors: grains, livestock and softs. Long positions in cocoa positions caught a 35% rally just in February. Short grains (corn, soybeans, and soymeal) were also big winners and common across programs. Other popular winning positions were long global equity indices (US, Europe, Japan), and short the Japanese Yen vs. the USD, Euro and British Pound. The longest-term programs (6-12+ month holding periods) fared the best, while the shortest trend models tended to perform the worst.</span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Discretionary Global Macro Managers</span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Discretionary global macro underperformed in February, and the worst sector was fixed income and short-term rates (STIR). Many programs were positioned for a steepening of the yield curve, a spread trade that is structured as short the front end (rates) and long the back end (bonds), an expectation that did not play out. Traders that were directionally long short-term rates (yields fall) in anticipation of rate cuts by the Fed and Europe got whipsawed. Currencies were a mixed bag for the discretionary programs. Many managers came into the month long the Japanese yen in anticipation that the BoJ would move away from NIRP (negative interest rates), which did not happen and the yen weakened against most G10 majors.</span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Commodities Managers – Agricultural Specialists</span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Agricultural commodities traders had one of their best months in memory. February saw the continuation of downward price moves in many markets due to ample global supplies in corn, soybeans and soymeal that started last November. This move has been exploited by nearly every type of program. Spread traders (short-biased), directional programs, and options traders have seemed to all cash in on this trend, regardless of systematic vs discretionary approach. Even though the downward trend is long lived, many fundamental traders see more room to fall. That said, this has become quite a crowded trade and any disruption to the oversupplied narrative, such as a bad stretch of weather, could see a sharp correction upwards.</span></span></span></span></span></p> <p><span><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Commodities Managers – Industrial Commodities Specialists (energies &amp; metals) </span></strong></span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Industrial commodities were mixed, with some energy programs doing well while metals programs generally underperformed. In energy, the better-performing systematic spread and discretionary energy-focused programs tended to be short natural gas and/or European energy markets. Small profits were also captured by long positions in crude oil, but refined products (distillates, gasoline, heating oil, diesel, crack spreads) proved difficult. In metals, most of the fundamental discretionary programs that we track underperformed. Losses seemed to be most frequent in long copper (for the first half of the month) and long gold exposures (the entire month). (Those managers that held on to or reinstated these long positions have been rewarded in March MTD.) We’re still curious why most of the metals managers we track did not benefit a great deal from long nickel (up 10%) or short platinum (down 5%) in February. </span></span></span></span></span></p> <p><img alt="Kettera Strategies" data-entity-type="file" data-entity-uuid="e18de463-a1bd-4507-bd75-eb5a399c2c93" src="https://www.alpha-week.com/sites/default/files/inline-images/Kettera-Strategies-HeatMap-2024-02-February.png" width="550" height="573" loading="lazy" /></p> <p>**********</p> <p><strong>Kettera Strategies</strong></p> <p>***</p> <p><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">For the “style classes” and “baskets” presented in this letter:<strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> </span></strong>The “style baskets” referenced above were created by Kettera for research purpose<strong>s</strong> to track the category and are classifications drawn by Kettera Strategies in their review of programs on and for the Hydra Platform. The arrows represent the style basket’s overall performance for the month (e.g. the sideways arrow indicates that the basket was largely flat overall, a solid red down arrow indicates the basket (on average) was largely negative compared to most months, etc.). The “style basket” for a class is created from monthly returns (net of fees) of programs that are either: programs currently or formerly on Hydra;  or under review with an expectation of being added to Hydra. The weighting of a program in a basket depends upon into which of these three groups the program falls<strong>. </strong>Style baskets are not investible products or index products being offered to investors. They are meant purely for analysis and comparison purposes. These also were not created to stimulate interest in any underlying or associated program. Nonetheless, as these research tools may be regarded to be “hypothetical” combinations of managers, hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any product or account will achieve profits or losses similar to those shown. in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. one of the limitations of hypothetical results is that they are generally prepared with the benefit of hindsight. in addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. there are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results..</span></span></p> <p><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Benchmark</span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">sources:</span></span></p> <ol><li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Blend of <a href="https://www.eurekahedge.com/Indices/IndexView/Eurekahedge/481/Eurekahedge-Macro-Hedge-Fund-Index">Eurekahedge Macro Hedge Fund Index</a> and <a href="http://www.barclayhedge.com/">BarclayHedge Global Macro Index</a></span></span></li> <li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The <a href="https://www.eurekahedge.com/Indices/IndexView/Eurekahedge/481/Eurekahedge-Macro-Hedge-Fund-Index">Eurekahedge Macro Index</a></span></span></li> <li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The</span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><a href="https://cib.societegenerale.com/en/prime-services-indices/">Société Générale Trend CTA Index</a></span></span></li> <li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The <a href="https://cib.societegenerale.com/en/prime-services-indices/">Société Générale Short-term Traders Index</a> </span></span></li> <li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The <a href="http://www.barclayhedge.com/">Barclay Hedge Currency Traders Index</a></span></span></li> <li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Blend of <a href="https://www.bridgealternatives.com/commodity-hedge-fund-index">Bridge Alternatives Commodity Hedge Fund Index</a> and <a href="http://www.barclayhedge.com/">Barclay Discretionary Traders Index</a> (for February only the Barclay index was used as the Bridge index was unavailable.) </span></span></li> <li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The <a href="http://www.barclayhedge.com/">Barclay Agricultural Traders Index</a>: (same link as above)</span></span></li> <li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">The <a href="https://www.eurekahedge.com/Indices/">Eurekahedge Commodity Hedge Fund Index</a></span></span></li> <li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Blend of <a href="https://www.eurekahedge.com/Indices/">CBOE Eurekahedge Relative Value Volatility Hedge Fund Index</a> and CBOE Eurekahedge Long Volatility Index (same link)</span> </span></li> <li><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Blend of <a href="https://www.eurekahedge.com/Indices/">Eurekahedge Multi Strategy Asset Weighted Index</a> and <a href="http://www.barclayhedge.com/">Barclay Hedge Fund Multi Strategy Index</a></span></span></li> </ol><p><span style="font-size:11px;"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">Indices and other financial benchmarks shown are provided for illustrative purposes only, are unmanaged, reflect reinvestment of income and dividends and do not reflect the impact of advisory fees. index data is reported as of date of publication and may be a month-to-date estimate if all underlying components have not yet reported. the index providers may update their reported performance from time to time. Kettera disclaims any obligation to verify these numbers or to update or revise the performance numbers.</span></span></p> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-tags--features.html.twig * field--node--field-tags.html.twig * field--node--features.html.twig * field--field-tags.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/hedge-funds-guest-articles" hreflang="en">Hedge Funds Guest Articles</a></div> <div class="field__item"><a href="/hedge-funds-managed-futures" hreflang="en">Hedge Funds - Managed Futures</a></div> <div class="field__item"><a href="/directory/kettera-strategies" hreflang="en">Kettera Strategies</a></div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10731&amp;2=bookmark" token="8giRvN71_dtKpySX61RMVzbXp8i_hdwbEZDg_bcp-7c"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/kettera-strategies" hreflang="en">Kettera Strategies</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">Public</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Tue, 12 Mar 2024 16:15:35 +0000 AlphaWeek Staff 10731 at https://alpha-week.com Why 2024 Should Be the Year of Shareholder Democracy https://alpha-week.com/why-2024-should-be-year-shareholder-democracy <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>Why 2024 Should Be the Year of Shareholder Democracy</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-image--features.html.twig * field--node--field-image.html.twig * field--node--features.html.twig * field--field-image.html.twig * field--image.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-image field--type-image field--label-hidden field__item"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_style' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/styles/article_full/public/2024-03/Shareholders.jpg?itok=pSNw6ejV" width="400" height="225" alt="Shareholders" typeof="foaf:Image" /> <!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Mon, 03/04/2024 - 12:34</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span><span>As we step into 2024 AGM season, it's clear that shareholder voices are getting louder, both from institutional and retail investors.</span></span></span></span></p> <p><span><span><span><span>Retail shareholders have risen in prominence in recent years, fuelled by the availability of DIY investing apps. These investors aren't just in it for the money; they want to have a say on how companies are run</span></span></span></span></p> <p><span><span><span><span>At the same time, institutional investors are using their financial power to push companies to be more environmentally conscious and accountable.</span></span></span></span></p> <p><span><span><span><span>There's a noticeable shift happening where decision-making power is moving from company boards to investors, signalling a move towards shareholder democracy.</span></span></span></span></p> <p><span><span><span><span>But there's still a lot of work to do. This year is crucial for improving shareholder access and governance. By learning from past mistakes and successes, businesses can make real change happen. Here are the top four trends shaping the investment landscape in 2024 and how we can improve the shareholder system.</span></span></span></span></p> <p><span><span><span><span><strong><span><span>The rise of the DIY investor </span></span></strong></span></span></span></span></p> <p><span><span><span><span><span><span>In the UK, retail ownership of shares has grown to 13.5%, a significant increase of 30% since 2010. While individually their holdings may not match those of institutions, their combined impact is increasingly noticeable. In 2023, retail investor turnout at AGMs soared, sparking discussions on ESG, executive pay, and diversity across a spectrum of meetings. </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>Shareholder voice will only get louder in 2024. As companies begin to gear up to organise their AGMs this year, facilitating shareholder participation therefore becomes crucial. Prioritising open discussion, and debate at these meetings is not something businesses should shy away from this year. </span></span></span></span></span></span></p> <p><span><span><span><span>The reality is the businesses that actively engage with stakeholders and embrace diverse perspectives at their AGMs are better positioned for success. On the other hand, those that exclude shareholders will suffer the consequences.</span></span></span></span></p> <p><span><span><span><span><strong><span><span>Moving beyond the AGM</span></span></strong></span></span></span></span></p> <p><span><span><span><span><span><span>With shareholders increasingly eager to engage, the prominence of IR meetings is also on the rise. While the AGM remains a cornerstone event in the shareholder calendar, offering investors multiple platforms to voice their opinions throughout the year is becoming essential. This trend gained momentum in 2023, with major players like Shell and BP organising a series of IR meetings to maintain engagement.  </span></span></span></span></span></span></p> <p><span><span><span><span><span><span>To facilitate this, businesses need to increase access to their investment relations calendars and proactively communicate these meetings. These gatherings offer regular opportunities for shareholders to raise any concerns, preventing issues from spilling over throughout the year. </span></span></span></span></span></span></p> <p><span><span><span><strong><span>Mending relations between boards and institutional investors </span></strong></span></span></span></p> <p><span><span><span><span>With some progress, we have seen relationships strain, especially with boards and institutional investors. Earlier this year, <a href="https://www.investorforum.org.uk/">The Investor Forum</a> expanded its efforts to include listed companies, aiming to improve dialogue between boards and institutional investors.</span></span></span></span></p> <p><span><span><span><span>For some time, tensions have simmered between major investors and company boards. Investors hesitate to approve substantial pay raises for executives and many feel that their concerns are overlooked during crucial company meetings where votes are cast.</span></span></span></span></p> <p><span><span><span><span>Repairing these relationships in 2024 demands concerted effort from both parties. Boards must prioritise transparency in their communications and decision-making processes. This means providing clear information about company performance, strategies, and governance. Boards must also hold themselves accountable before institutional investors intervene.</span></span></span></span></p> <p><span><span><span><span>At the same time, investors must remain open to gradual changes within boards and acknowledge that transformation takes time. Taking a long-term perspective when assessing companies beyond financial metrics is essential. This includes evaluating performance across cultural, innovative, and sustainable dimensions and how this can change over time. </span></span></span></span></p> <p><span><span><span><span>Hostile relations benefit neither party, openness is required from both sides.</span></span></span></span></p> <p><span><span><span><span><strong><span><span>AI takes over investment</span></span></strong></span></span></span></span></p> <p><span><span><span><span>No 2024 prediction is complete without AI, and the investment industry was not immune to tech developments. Investors turned to tools that help them to understand executives' speech patterns during earnings calls, offering deeper insights into their intentions. On the flip side, AI can also be used to understand stakeholder sentiment during other crucial events such as AGMs and ahead of voting scenarios.</span></span></span></span></p> <p><span><span><span><span>The industry's enduring challenge of maintaining frequent communication between boards and shareholders could also be solved by AI this year. In fact, the tech could help provide personalised, round-the-clock shareholder chatbots, promising increased accessibility and responsiveness. Only time will tell with advancements in AI, but it’s important for investors and businesses to stay ahead of them. </span></span></span></span></p> <p><span><span><span><span><strong><span><span>Achieving democracy</span></span></strong></span></span></span></span></p> <p><span><span><span><span>In 2024, businesses face a clear choice: risk backlash by excluding investors or benefit from embracing new voices. The key lesson for boards, IROs, and governance members remains the same: prioritise transparent, regular communication, and honesty with investors. For investors, keep raising your voice and holding businesses accountable. With investors and boards on the same page and working together, real transformative change becomes possible.</span></span></span></span></p> <p><span><span><span><span>**********</span></span></span></span></p> <p><em><span><span><span><span><strong>Peter Fowler</strong> is COO at <strong><a href="https://www.lumiglobal.com/">Lumi</a></strong></span></span></span></span></em></p> <p><span><span><span><span>***</span></span></span></span></p> <p><em>The views expressed in this article are those of the author and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group</em></p></div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-tags--features.html.twig * field--node--field-tags.html.twig * field--node--features.html.twig * field--field-tags.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/hedge-funds-guest-articles" hreflang="en">Hedge Funds Guest Articles</a></div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10695&amp;2=bookmark" token="dArTnFZZI4yTXj4MGuen3Ur1Ycew28K-dOibIpZ7Tkc"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/peter-fowler" hreflang="en">Peter Fowler</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">Public</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Mon, 04 Mar 2024 12:34:01 +0000 AlphaWeek Staff 10695 at https://alpha-week.com Dawn of the New Alpha Era for Hedge Funds? https://alpha-week.com/dawn-new-alpha-era-hedge-funds <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>Dawn of the New Alpha Era for Hedge Funds?</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-image--features.html.twig * field--node--field-image.html.twig * field--node--features.html.twig * field--field-image.html.twig * field--image.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-image field--type-image field--label-hidden field__item"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_style' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/styles/article_full/public/2024-03/Dawn-Wall-Street.jpg?itok=D1uaQgqJ" width="400" height="225" alt="Wall Street" typeof="foaf:Image" /> <!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Mon, 03/04/2024 - 10:24</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span><span><span>'Alpha' is a concept that has always distinguished hedge funds. It means outperformance relative to the “beta” of the market, and alpha generation is the goal of the industry. An actively managed hedge fund that is not generating alpha, i.e., that is not outperforming a passive index tracking fund, will lose its <em>raison d’etre</em>.</span></span></span></span></span></p> <p><span><span><span><span><span>In the early days of hedge funds, alpha was generated at a prodigious rate. The greats of 1990s, for example, such as the legendary George Soros at Quantum, were associated with bold bets and outsize returns. This continued in the early years of this century, but the Global Financial Crisis was a watermark moment. It ushered in an era of central bank intervention in markets that made generating alpha much more difficult.</span></span></span></span></span></p> <p><span><span><span><span><span>That was because programmes such as quantitative easing that were utilised by central banks globally had the consequence of pushing up the value of most assets for a sustained period - spring 2009 through to the Covid crisis of early 2020, indeed. This meant it was a great time to hold assets like U.S. public equities (which were going up 15-20% a year), and passive, index tracking funds flourished because of it.</span></span></span></span></span></p> <p><span><span><span><span><span>It is difficult for any active investment manager to outperform the market consistently when the market is growing at such a high-octane rate, and this was true in aggregate of the global hedge fund industry, although, of course, there were exceptions. Instead, the industry sought to redefine its value to investor portfolios, the new paradigm being one of downside protection and diversification rather than alpha. The alpha era was apparently over.</span></span></span></span></span></p> <!-- THEME DEBUG --> <!-- THEME HOOK: 'filter_caption' --> <!-- BEGIN OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --> <figure role="group" class="align-right"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'entity_embed_container' --> <!-- BEGIN OUTPUT from 'modules/contrib/entity_embed/templates/entity-embed-container.html.twig' --> <div alt="Christen Thomson" data-embed-button="entity_browser_button" data-entity-embed-display="image:image" data-entity-embed-display-settings="{&quot;image_style&quot;:&quot;&quot;,&quot;image_link&quot;:&quot;&quot;,&quot;image_loading&quot;:{&quot;attribute&quot;:&quot;lazy&quot;}}" data-entity-type="file" data-entity-uuid="89755b56-74be-4601-8d4e-3ec5ab64c3ee" data-langcode="en" title="Christen Thomson" class="embedded-entity"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/Christen-Thomson.jpg" alt="Christen Thomson" title="Christen Thomson" typeof="foaf:Image" /><!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --><!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --></div> <!-- END OUTPUT from 'modules/contrib/entity_embed/templates/entity-embed-container.html.twig' --> <figcaption>Christen Thomson</figcaption></figure><!-- END OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --><p><span><span><span><span><span>But now it may be back. And that is according to the investment banks that provide services to hedge funds, the so-called prime brokers, who arguably understand the industry as well as anyone. For example, according to BNP Paribas, we are entering a new era of alpha for hedge funds. In their recently-released <a href="https://globalmarkets.cib.bnpparibas/2024-alternative-investment-survey-great-expectations-investors-bet-on-alpha-in-the-new-rates/">2024 Alternative Investment Survey</a> they argue that “allocators are starting to position for an era where alpha and diversification are finally expected to deliver strong returns”. Similarly, according to new <a href="https://www.ib.barclays/our-insights/3-point-perspective/2024-hedge-fund-outlook.html">Barclays</a> research, investors are planning to increase their hedge fund exposures this year and more allocators want to add new managers to their portfolios.</span></span></span></span></span></p> <p><span><span><span><span><span>The investors themselves were making similar points during ‘hedge fund week‘ recently in Miami, where many of the largest hedge fund conferences globally take place. From their perspective, the opportunities are back for hedge funds to flourish. The return of market volatility, banished during the ’great moderation‘ of central bank intervention, creates winners and losers. </span></span></span></span></span></p> <p><span><span><span><span><span>Hedge funds which, unlike their mutual fund cousins, have the ability to trade across multiple asset classes and to use powerful instruments like leverage, derivatives and shorting, should be well-placed to capitalise on these opportunities. Indeed, in Miami, some investors, speaking under the Chatham House rule, talked of all of this meaning a new “golden era” for hedge funds.</span></span></span></span></span></p> <p><span><span><span><span><span>So, as this new era dawns, allocators will be looking at hedge funds with renewed interest. But that does not mean that the money will just roll in to the industry. Many institutional investors remain cautious about allocating to the space and devote great time to the due diligence of managers. In order to be rewarded with capital, a firm must avoid giving prospective allocators any reason not to invest in them. That often means having the right operational infrastructure, governance and culture, but it also means having the right reputation in the marketplace. </span></span></span></span></span></p> <p><span><span><span><span><span>As many firms have found, negative reputational issues can gravely damage their capital-raising prospects, while conversely, a strong reputation can be highly compelling to allocators. Increasingly, hedge fund managers understand that reputational risk can be just as important to the success of their firms as market risk.</span></span></span></span></span></p> <p><span><span><span><span>**********</span></span></span></span></p> <p><em><span><span><span><strong>Christen Thomson</strong> is a Senior Director at <a href="https://citigatedewerogerson.com/"><strong>Citigate Dewe Rogerson</strong></a></span></span></span></em></p> <p><span><span><span><span>***</span></span></span></span></p> <p><em>The views expressed in this article are those of the author and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group</em></p> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-tags--features.html.twig * field--node--field-tags.html.twig * field--node--features.html.twig * field--field-tags.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/hedge-funds-guest-articles" hreflang="en">Hedge Funds Guest Articles</a></div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10694&amp;2=bookmark" token="kUsGXld4WLI5RS4eoznYLQjq0gpxDduv9bN8l257uO4"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/christen-thomson" hreflang="en">Christen Thomson</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">Public</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Mon, 04 Mar 2024 10:24:49 +0000 AlphaWeek Staff 10694 at https://alpha-week.com Hedge Funds Q&A: Val Zlatev, Analog Century Management https://alpha-week.com/hedge-funds-qa-val-zlatev-analog-century-management <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>Hedge Funds Q&amp;A: Val Zlatev, Analog Century Management</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-image--features.html.twig * field--node--field-image.html.twig * field--node--features.html.twig * field--field-image.html.twig * field--image.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-image field--type-image field--label-hidden field__item"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_style' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/styles/article_full/public/2024-02/Analog-Century-Management.jpg?itok=V8syH26v" width="400" height="225" alt="Analog Century Management" typeof="foaf:Image" /> <!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Wed, 02/14/2024 - 12:21</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span>The technology hardware space receives significantly less column inches than its software counterpart, in part because it’s a smaller space, and in part because it’s considered to be less ‘cool’. Investment firm Analog Century Management specialises in the space, however, and Greg Winterton spoke to Val Zlatev, Portfolio Manager and Senior Partner, to learn more about the firm and the hardware space.</span></span></span></p> <p><span><span><span><strong>GW: Val, for those less familiar with Analog Century Management, tell us a little about the firm.</strong></span></span></span></p> <p><span><span><span>VZ: We’re a New York based investment manager investing in liquid, public equities across hard tech sectors: semiconductors, semi cap equipment, communications equipment, and hardware/edge devices. We currently have approximately $1.2bn in capital deployed across three fundamental strategies: long only, long/short, and market neutral. The strategies rely on the same alpha generating positions, though fund exposures differ along with risk/reward expectations. </span></span></span></p> <p><span><span><span><strong>GW: Why hardware? And why do you take a discretionary / fundamental approach?</strong></span></span></span></p> <p><span><span><span>VZ: Hard tech is a compelling and attractive investment sector for several reasons. First, it is the essential and irreplaceable enabler of the biggest technology inflections in our lifetime, including artificial intelligence and electric vehicles. Second, it undergoes transformations and disruptions, creating significant opportunities for alpha generation. Third, it is a complex and specialized domain that requires deep technical and market knowledge, which creates an information edge for our team.</span></span></span></p> <!-- THEME DEBUG --> <!-- THEME HOOK: 'filter_caption' --> <!-- BEGIN OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --> <figure role="group" class="align-right"><img alt="Val Zlatev" data-entity-type="file" data-entity-uuid="1f5d7727-fd7c-41e7-aa41-d9269acc9d9b" src="https://www.alpha-week.com/sites/default/files/inline-images/Val-Zlatev.jpg" width="200" height="200" loading="lazy" /><figcaption>Val Zlatev</figcaption></figure><!-- END OUTPUT from 'core/modules/filter/templates/filter-caption.html.twig' --><p><span><span><span>We take a discretionary and fundamental approach to effectively capture the dispersion in this sector. On the long side of the strategies, it is essential to compound alpha by identifying large inflecting themes like AI and EVs and investing in the technology leaders with pricing and margin power. </span></span></span></p> <p><span><span><span>There are plenty of opportunities for trading alpha on the short side. Hard tech is littered with mature companies that compete in formerly ‘cool’ markets. For example, smartphones have transitioned to become more mature and as a result, product differentiation is difficult. If companies fall behind on the technology curve, or miss with a generation or two of products, they often face the long slide of lost market share, pricing pressure, and uncertain earnings.</span></span></span></p> <p><span><span><span><strong>GW: It’s difficult to talk about the semiconductor market without also discussing what many perceive to be a geopolitical risk. What’s your rebuttal to that objection when it comes up? What are the nuances to the space that some investors don’t quite understand properly?</strong></span></span></span></p> <p><span><span><span>VZ: Geopolitical risk is most prominent in the context of China and the risk is two-fold: first, the US restrictions on semiconductor exports to China and second, the fear of China taking over Taiwan, a country manufacturing many of the leading-edge semiconductors used globally.</span></span></span></p> <p><span><span><span>There have been numerous restrictions on exports to China ever since we launched the firm in 2018, including but not limited to semi cap equipment and powerful AI chips. What investors need to understand is that global demand far outstrips supply, so regional sales have shifted to other geographies, and overall sales have continued to grow. Semiconductors are the oil of the 4th industrial revolution, and everybody needs them.</span></span></span></p> <p><span><span><span>The geopolitical elephant in the room, however, is China and Taiwan and the prospects of a messy confrontation. We believe that outcome is extremely unlikely in the short to medium term; however, the implications of this kind of disruption would be far broader than just the semiconductor sector and will impact every type of market. The premise that China wants to invade Taiwan with the intent of taking control of Taiwan’s advanced semiconductor facilities is flawed. It is highly unlikely that China will be capable of using these facilities even if they control Taiwan. All semiconductors are manufactured using equipment provided by companies that are outside of China and Taiwan: Applied Materials, KLA Tencor, Lam Research, Tokyo Electron, and ASML. This equipment is remote controlled and will likely be turned off right away. At the very least, this equipment will be cut off maintenance contracts, software patches and updates, rendering TSMC’s facilities largely unusable in 6-9 months. This could serve as an incentive for China and Taiwan to find an agreeable political solution.</span></span></span></p> <p><span><span><span><strong>GW: In terms of the non-semiconductor corners of the hardware market, what are some of the others that you find particularly interesting at the moment, and why?</strong></span></span></span></p> <p><span><span><span>VZ: One of the most compelling opportunities lies in networking. Artificial Intelligence models are so large they require tens of thousands of servers to work on the problems simultaneously. AI networking requires upgraded equipment that enables faster data transmission, lower latency, and better bandwidth utilization. We have held numerous positions in companies set to benefit from increased networking requirements.</span></span></span></p> <p><span><span><span>At the same time, we have identified more shorts within the hardware subsector. Many branded “boxes” are low margin businesses that need to buy the high margin semiconductors built into their products. Additionally, the largest buyers are the hyperscale datacenters, e.g. Amazon AWS, Google Cloud. Microsoft Azure. These companies are highly skilled at building infrastructure that serves their needs and are able to purchase chips and networking components directly from the manufacturers, rather than pay the mark up for the branded solutions.</span></span></span></p> <p><span><span><span><strong>GW: Something a little bit off-piste for this last one, Val. You’re a physicist, and your thesis focused on the aftermath of the big bang. What have you learned in academia that you now use as an investor?</strong></span></span></span></p> <p><span><span><span>VZ: I appreciate the question. My academic background in physics has served me in several ways as an investor. First, it taught me the power of keeping it simple and getting to the core or essence of a problem. It is the “Occam’s razor” Principle. Second, it gave me a deep appreciation for the power and beauty of fundamental science and technology, and how they can unlock new possibilities and create value. Third, it gave me a strong foundation for managing risk. The Heisenberg uncertainty principle is not directly applicable to business but what it taught me is that uncertainty is the only certainty - to be aware of the unknowns and to be cognisant of the inherent risks I am taking.  </span></span></span></p> <p>**********</p> <p><span><span><span><strong><em>Val Zlatev</em></strong><em> is Portfolio Manager, CIO, and Senior Partner at </em><a href="https://www.analogcm.com/"><em>Analog Century Management</em></a><em> </em></span></span></span></p> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-tags--features.html.twig * field--node--field-tags.html.twig * field--node--features.html.twig * field--field-tags.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/hedge-funds-qa" hreflang="en">Hedge Funds Q&amp;A</a></div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10643&amp;2=bookmark" token="htFyp-rhgw9OaAiiR2JmCajbjRcZc565U4IXAd24z1U"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/greg-winterton" hreflang="en">Greg Winterton</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">Public</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Wed, 14 Feb 2024 12:21:49 +0000 AlphaWeek Staff 10643 at https://alpha-week.com Kettera Strategies Heat Map - January 2024 https://alpha-week.com/kettera-strategies-heat-map-january-2024 <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--title--features.html.twig x field--node--title.html.twig * field--node--features.html.twig * field--title.html.twig * field--string.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <span>Kettera Strategies Heat Map - January 2024</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--title.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-image--features.html.twig * field--node--field-image.html.twig * field--node--features.html.twig * field--field-image.html.twig * field--image.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-image field--type-image field--label-hidden field__item"> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_formatter' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image_style' --> <!-- BEGIN OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'image' --> <!-- BEGIN OUTPUT from 'core/modules/system/templates/image.html.twig' --> <img loading="lazy" src="https://www.alpha-week.com/sites/default/files/styles/article_full/public/2023-02/Kettera-Strategies.jpg?itok=MT_xYzdC" width="400" height="225" alt="Kettera Strategies" typeof="foaf:Image" /> <!-- END OUTPUT from 'core/modules/system/templates/image.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-style.html.twig' --> <!-- END OUTPUT from 'core/modules/image/templates/image-formatter.html.twig' --> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--created--features.html.twig x field--node--created.html.twig * field--node--features.html.twig * field--created.html.twig * field--created.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <span>Tue, 02/13/2024 - 09:03</span> <!-- END OUTPUT from 'core/modules/node/templates/field--node--created.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--body--features.html.twig * field--node--body.html.twig * field--node--features.html.twig * field--body.html.twig * field--text-with-summary.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The Style Heat Map below<em> </em>offers a snapshot for the month on all categories of strategies.  For the month of January the following summaries address four of the 10 style categories that we track.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>FX Specialists</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>FX programs were all over the map last month. The consensus view by traders of US dollar weakness coming into January turned out to be misguided. Many programs were caught by surprise as sentiment quickly flipped from bearish USD to bullish after the US economy’s unexpectedly strong employment data in early January sparked optimism for the USD (which rose roughly over 2% during the month). Some of the better performing positions were long USD and short just about any G10 or Nordic currency. In cross-rates, long Swedish Krona-short Euro was a winner in the second half of the month. Most of the FX strategies that Kettera tracks outperformed the industry FX manager benchmarks – largely because fundamentals-based programs tended to fare better than more technical and shorter-term strategies. </span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Discretionary Global Macro Managers</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Most of the discretionary global macro programs that Kettera follows slightly underperformed the broader benchmark, as the reversal in the US dollar, from weak to strong, caught managers off-guard with currencies finishing the month generally the worst performing sector. There also appeared to be little overall contribution from commodities, equities or fixed income, although a few programs had idiosyncratic exposures in long equities, long base metals, and long crude that were helpful. In fixed income and short-term rates, many global macro programs appear to be holding a 2/10 yield curve steepener (short the 2-Years, long the 10-Years) in anticipation of a soft landing and the normalization of interest rate spreads.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Commodities – Agricultural Specialists</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Corn, bean and wheat were all under pressure throughout January. Fortunately, many of the grains programs Kettera lists or tracks had short exposures, primarily in corn and beans, through the use of short-biased spreads and/or options strategies. Underlying fundamentals have been pointing to increasing supplies and slowing global demand growth. Most traders interpret the overall forward price trend in corn and beans to be pointing downward, but sudden changes in weather and growing conditions can always make the intermediate price path choppy. A few programs also traded livestock successfully, with bullish exposures to the cattle market. Cattle inventories are currently limited, most notably a lack of females (cows), and is expected to continue to be so going forward, pushing prices higher, with tight supplies expected for the next two years.</span></span></span></span></span></span></p> <p><span><span><span><strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Systematic Trend CTAs</span></span></span></strong></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Long term trend followers, both those included in our universe as well as the industry in general, were generally positive in January. Profitable returns were found largely in commodities and equities – which were only partially offset by mixed to negative performance in positions in the FX and fixed income sectors. Notable contributors in the commodities sector were long cocoa, short grains such as corn and soybeans, and long crude oil. In the equities sector, the bulk of profits came from long exposures to US and Japanese stock indices and short Chinese indices. Currencies were mixed as some programs came into January long USD versus most G10 units, which reversed sharply after a strong employment report early in the month. Most programs were negative in fixed income positions to varying degrees, the worst off being those with long exposures to various European debt instruments as yields rose (and the price of these instruments dropped). </span></span></span></span></span></span></p> <p><img alt="Kettera Strategies" data-entity-type="file" data-entity-uuid="095e878d-587d-46a0-a568-89865eb1b876" src="https://www.alpha-week.com/sites/default/files/inline-images/Kettera-Strategies-HeatMap-2024-01-January.png" width="500" height="428" loading="lazy" /></p> <p>**********</p> <p><em><strong><a href="https://www.ketterastrategies.com/">Kettera Strategies</a></strong></em></p> <p><span><span><span>Notes: </span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">For the “style classes” and “baskets” presented in this letter:<strong><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"> </span></strong>The “style baskets” referenced above were created by Kettera for research purposes to track the category and are classifications drawn by Kettera Strategies in their review of programs on and for the Hydra Platform. The arrows represent the style basket’s overall performance for the month (e.g. the sideways arrow indicates that the basket was largely flat overall, a solid red down arrow indicates the basket (on average) was largely negative compared to most months, etc.). The “style basket” for a class is created from monthly returns (net of fees) of programs that are either: programs currently or formerly on Hydra;  or under review with an expectation of being added to Hydra. The weighting of a program in a basket depends upon into which of these three groups the program falls<strong>. </strong>Style baskets are not investible products or index products being offered to investors. They are meant purely for analysis and comparison purposes. These also were not created to stimulate interest in any underlying or associated program. Nonetheless, as these research tools may be regarded to be “hypothetical” combinations of managers, </span></span></span></span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any product or account will achieve profits or losses similar to those shown. in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. one of the limitations of hypothetical results is that they are generally prepared with the benefit of hindsight. in addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk in actual trading. there are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results</span></span></span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">.</span></span></span></span></p> <p><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Benchmark</span></span></span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>sources:</span></span></span></span></span></span></span></p> <ol><li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Blend of <a href="https://www.eurekahedge.com/Indices/IndexView/Eurekahedge/481/Eurekahedge-Macro-Hedge-Fund-Index">Eurekahedge Macro Hedge Fund Index</a> and <a href="http://www.barclayhedge.com/">BarclayHedge Global Macro Index</a></span></span></span></span></span></span></span></li> <li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The Eurekahedge Macro Index: (same link as <span>above)</span></span></span></span></span></span></span></span></li> <li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>The</span></span></span> <a href="https://cib.societegenerale.com/en/prime-services-indices/"><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Societe</span></span></span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Generale</span></span></span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Trend</span></span></span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>CTA</span></span></span> <span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span><span>Index</span></span></span></a></span></span></span></span></span></li> <li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The Societe Generale Short-term Traders Index: (same link as <span>above)</span></span></span></span></span></span></span></span></li> <li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The <a href="http://www.barclayhedge.com/">BarclayHedge Currency Traders Index</a></span></span></span></span></span></span></span></li> <li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Blend of <a href="https://www.bridgealternatives.com/commodity-hedge-fund-index">Bridge Alternatives Commodity Hedge Fund Index</a> and <a href="http://www.barclayhedge.com/">Barclay Discretionary Traders <span>Index</span></a></span></span></span></span></span></span></span></li> <li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The Barclay Agricultural Traders Index: (same link as <span>above)</span></span></span></span></span></span></span></span></li> <li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>The <a href="https://www.eurekahedge.com/Indices/">Eurekahedge Commodity Hedge Fund Index</a>: </span></span></span></span></span></span></span></li> <li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Blend of <a href="https://www.eurekahedge.com/Indices/">CBOE Eurekahedge Relative Value Volatility Hedge Fund Index</a> and CBOE Eurekahedge Long Volatility Index (same link): </span></span></span></span></span></span></span></li> <li><span><span><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>Blend of Eurekahedge Asset Weighted Multi Strategy Asset Weighted Index (same link as above) and <a href="http://www.barclayhedge.com/">Barclay Hedge Fund Multi Strategy Index</a>.</span></span></span></span></span></span></span></li> </ol><p>I<span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">ndices and other financial benchmarks shown are provided for illustrative purposes only, are unmanaged, reflect reinvestment of income and dividends and do not reflect the impact of advisory fees. index data is reported as of date of publication and may be a month-to-date estimate if all underlying components have not yet reported. the index providers may update their reported performance from time to time. Kettera disclaims any obligation to verify these numbers or to update or revise the performance numbers.</span></span></span></span></p> <p><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US">***</span></span></span></span></p> <p><em>The views expressed in this article are those of the author and do not necessarily reflect the views of AlphaWeek or its publisher, The Sortino Group</em></p> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-tags--features.html.twig * field--node--field-tags.html.twig * field--node--features.html.twig * field--field-tags.html.twig * field--entity-reference.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-tags field--type-entity-reference field--label-hidden field__items"> <div class="field__item"><a href="/hedge-funds-guest-articles" hreflang="en">Hedge Funds Guest Articles</a></div> <div class="field__item"><a href="/directory/kettera-strategies" hreflang="en">Kettera Strategies</a></div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <drupal-render-placeholder callback="flag.link_builder:build" arguments="0=node&amp;1=10641&amp;2=bookmark" token="oOzcrdoig2WDpSkHAfBy-kHOpbXZJlzGhHS_ZhE4Vl0"></drupal-render-placeholder> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-author--features.html.twig * field--node--field-author.html.twig * field--node--features.html.twig x field--field-author.html.twig * field--entity-reference.html.twig * field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <a href="/author/kettera-strategies" hreflang="en">Kettera Strategies</a> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field--field-author.html.twig' --> <!-- THEME DEBUG --> <!-- THEME HOOK: 'field' --> <!-- FILE NAME SUGGESTIONS: * field--node--field-content-role--features.html.twig * field--node--field-content-role.html.twig * field--node--features.html.twig * field--field-content-role.html.twig * field--list-string.html.twig x field.html.twig --> <!-- BEGIN OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> <div class="field field--name-field-content-role field--type-list-string field--label-above"> <div class="field__label">Content role</div> <div class="field__item">Public</div> </div> <!-- END OUTPUT from 'themes/gavias_vinor/templates/fields/field.html.twig' --> Tue, 13 Feb 2024 09:03:50 +0000 AlphaWeek Staff 10641 at https://alpha-week.com