AuM: USD 150M
Strategy: Equity L/S
Sport: Beach Volleyball
Drink: Fireball Cinnamon & Whisky Liquor
Food: Chicken Caesar Salad
Book: Money Mavericks: Confessions of a hedge fund manager
If you could time travel back to day one of your fund and have 15min with your former self to communicate any lessons you’ve acquired with the intention of saving yourself head aches, what would you tell yourself?
Be open-minded and perceptive with regards to investor preferences and demand for certain liquidity and regulatory-driven investment structures. Don’t underestimate the sometimes lengthy and demanding process of getting institutional investors comfortable with your investment strategy and investment process.
How do you manage your portfolio?
We manage a liquid equity L/S portfolio with European bias. We aim to generate stock picking alpha by actively taking long and short positions in all major industry verticals. We actively trade around our portfolio and our key strength is the combination of fundamental research and disciplined trading, which has produced a 12-year track record with strong risk-adjusted returns.
What is the difference between you and all the other Equity L/S managers out there?
The way we have structured our investment team with cross pollination and idea generation is unique and gives us differentiated returns in combining a diversified portfolio built bottom-up with disciplined trading.
How do you generate alpha?
By stock picking and being able to size our positions correctly over time. This includes managing our gross exposure and properly estimating what is included in the market price of a certain stock.
And what is the real difference?
Being nimble and swift in adjusting to market information.
You have annualized over 10% since you started managing money in this constellation in 2002 and only lost -3% in 2008 when the average Equity L/S fund was down -20%. How did you do that?
Again I believe that our combination of fundamental research and disciplined trading makes us very nimble and provides a very strong downside protection in terms of severe market turmoil.
What does your risk management look like?
We have an independent risk control function with intra-day monitoring of risk limits. We also have a portfolio risk management process, called Drawdown control, which downsizes the portfolio when the aggregated portfolio is down 2-4% on a 3-month rolling basis.