An innovative product that combined discretionary trading of convertible bonds with quantitative trading of equities spawned CQS: convertible bond arbitrage, together with statistical arbitrage, made up the Credit Suisse Convertible and Quantitative Strategies fund. Trading convertibles fused Hintze’s prowess in the mathematics of deltas and valuations with his acumen and insight into macro, credit and corporate events. Meanwhile, the ‘stat arb’ strategy focused on anomalies such as valuation gaps between ordinary and preferred shares or between share classes. The two strategies were complementary and diversified one another. The strategy had a banner month in February 2001, making 14%, which came from the stat arb strategy. The convertible fund quickly became a brand leader, garnering assets above $1 billion.

The first overseas office CQS opened was in 2005 in Hong Kong, to capitalize on the potential of China, Hintze’s place of birth, helping to source stock borrow, research and new issues. CQS swiftly launched an Asian convertible bond and credit strategy, which was one of the largest Asian launches of its time, raising $750 million in the first year. The Hong Kong office provided a training ground for several talented traders, including Monica Hsiao, who is grateful to Hintze for giving her the opportunity to build CQS’s Asian credit business. In 2015 she launched her own award-winning manager, Triada Capital, and featured in The Hedge Fund Journal’s 50 Leading Women in Hedge Funds report published in association with EY.

Broadening credit expertise

Hintze’s view of convertible and credit trading was holistic: “We blended tangential expertise from credit, equity and volatility traders, as well as pure convertible bond traders. The next logical step was to further broaden out the knowledge base with other credit experts who could provide additional perspectives on trading convertibles, as well as pursuing their own strategies”. In 2002, CQS brought in fresh talent to launch a second fund, focused on capital structure arbitrage trading, which included the emerging field of structured credit tranches as well as correlation/dispersion trading of credit indices. Not long after, the business expanded into cash management and corporate loans, with other hires.

ABS experts, Ali Lumsden and Steve Swallow, were headhunted in 2005 to launch an ABS fund, which sought to exploit some of the opportunities created by banks being forced to offload equity tranches of CLOs. But this was not only a long only strategy as the ABS market was developing its own CDS market. The ABS fund was seeded by Lehman Brothers and its managers’ deep dive, on the ground, fundamental research, alerted them – and the rest of CQS – to the collapse of US mortgage underwriting standards. They started building short positions in 2007, which soon paid off. 2008 was generally a glorious year for CQS as the ABS fund had a stellar year and counterparty diversification proved wise.

The lessons of the crisis also spurred a wider initiative to institutionalize the hedge fund industry. CQS was a founder member of the Standards Board for Alternative Investments (SBAI) forerunner, the Hedge Fund Standards Board (HFSB), which implemented ideas set out by the Hedge Fund Working Group in 2008. Hintze is still a trustee emeritus of the SBAI.

CQS’s analytical breadth also scrutinised fundamental and legal analysis of individual companies, corporate events and instruments, to extract more idiosyncratic alpha and developed an event driven special situations strategy that publicly disclosed positions in several high-profile situations in Italy, Germany and Portugal. This was led by Head of Special Situations, Ivelina Green, who joined in 2015 and featured in the 2018 edition of The Hedge Fund Journal’s 50 Leading Women in Hedge Funds report. CQS Global Head of Business Development, Soraya Chabarek, was honoured in the 2019 50 Leading Women report and later became CEO of CQS. The firm also had a relative value credit fund for a few years managed by Prakash Narayanan who left for Citadel in 2020, the year Green left to launch Pearlstone Alternative.

Listed closed end funds

CQS had also been augmenting its long only range. In 2007 it branched out into several LSE-listed closed end funds via the acquisition of New City Investment Management, which ran New City High Yield Fund; CQS Natural Resources Growth and Income; Golden Prospect and Geiger Counter. These were long only equity and credit strategies providing tangential expertise and optionality mainly revolving around precious and base metals.

Long only resilience

A long only, CMA (credit multi asset) strategy was developed in conjunction with pension fund consultants, Mercer, and raised billions for an actively managed, benchmark-agnostic approach that tactically rotates capital around various credit sub-asset classes, including investment grade bonds, high yield bonds, senior secured loans, convertibles and asset backed securities, in Europe and the US. The strategy captured shifting liquidity, volatility and complexity premia at the sub-asset class level, as they ebbed and flowed with moves and moods in markets. While the hedge fund strategies could use a variety of short techniques, CQS was sometimes able to play defense on the long only side and minimize interest rate duration risk by focusing on shorter duration and floating rate assets, often with a bias towards more senior paper.

Hintze found that “long only made the firm more resilient”. In 2020, though a performance drawdown in his strategy dominated the headlines as Covid upended correlation patterns in structured credit, an impressive fact was hiding in plain sight: CQS was growing assets. A few years later this helped to attract interest from Canadian insurer Manulife, which in 2024 acquired the CQS long only business where Craig Scordellis continues to manage the main long only strategy.

Hintze spun out the remaining hedge fund strategy assets of around USD 2 billion, roughly 10% of the total, into Deltroit Asset Management. Having diversified CQS into dozens of strategies over 24 years, Hintze has now come round full circle to the second incarnation of the flagship strategy that CQS started with.

Directional Opportunities Fund

The original fund morphed into the Directional Opportunities Fund (DOF), launched in 2005. This was a high conviction strategy lead managed by Hintze, who dubs it “macro through the lens of credit”, though it has an unconstrained and flexible mandate covering both macro rates, currencies, commodities and single name equities and credits.

Hintze sets the strategic direction. “DOF had ‘pods’ before Covid, but now there are just three other risk takers, who have some discretion over the timing and structuring of ideas including choice of instruments, tranches and names, within defined constraints. I look at every ‘I’ and ‘t’ but do not need to tick every one,” says Hintze.

Since 2005 DOF has outperformed the S&P 500 with lower volatility. Since Covid it has annualized in the high teens with a Sharpe ratio of over 2. After single digit returns in 2023 it made high teens in 2024. “Profitable trades in 2024 included high performance computing names, a position in an AI semiconductor chip maker, and some special situations in distressed oil and gas restructurings as well as opportunistic trades in structured credit,” says Hintze. There has been some gold exposure though Hintze judges that so-called “digital gold” or Bitcoin is too volatile for the mandate.

Hintze has substantial personal holdings in DOF as well as in MHPF Australia, a major and diverse agricultural business. It consists of farmland across Australia’s eastern seaboard, including in Victoria, New South Wales and Queensland. These holdings are actively managed and farmed, and include Deltroit Station, which is the location of Hintze’s Australian country home and gives his firm its name.

Hintze would never say never to running long only money again and could certainly expand Deltroit but stresses, “The current priority is maintaining excellent risk-adjusted returns and a dialogue with clients with less need for media coverage to promote long only”.

An open and rigorous process

Hintze has been a key risk taker from the beginning. He studied pure maths, physics, electrical engineering and acoustics in Australia and has a Harvard MBA. He enjoys mathematics and problem-solving: “I always loved mathematics, which is a very powerful tool. I used it in physics and electrical engineering. It allows conceptual understanding of thoughts”. As science has advanced, elements of machine learning, AI and generative AI can be used in Deltroit’s process. Hintze has written computer programs but now assigns coding to others.

Curiosity and context

But the process is not a theoretical quant model and is very much grounded in real world events. Hintze is something of a polymath, once delivering an erudite lecture on anthropology, and has a voracious appetite for reading research: “We have an ongoing intellectual curiosity to keep learning and triangulate what we are seeing now with a lot of fundamental work to contextualise it. Knowledge is not enough to make money because you also need insight and imagination”.

Insights come from a spectrum of sources as the investment process synthesizes fundamentals, technical and sentiment, in the context of geopolitics and geoeconomics. “Top-down themes could include macroeconomics; monetary policy; fiscal policy; central bank intervention; geotech rivalry; credit market default cycles; financial market valuation; banking system deleveraging and disintermediation, and the regulatory framework for banks, brokers, pension funds and insurers,” says Hintze.

Geopolitics

Geopolitics is explicitly part of the investment process and geopolitical risk remains close to Hintze’s heart. His forebears were twice refugees: moving from Russia to China to Australia, partly because of revolutions. Born in China in 1953, Hintze and his family became refugees in Australia after foreigners were expelled from China. His grandfather also had assets expropriated in Indonesia.

Hintze believes the rivalry between the US and China will continue but is not sure how it will pan out: “China is a big unknown – it is very mercantile but wants to be a proper superpower”.

In 2018 at the Legends4Legends conference in Amsterdam, Sir Michael Hintze, as he was then, proved prescient in flagging political risks of the populist pendulum swinging both left and right; populists have subsequently grown support in multiple countries and are in power in the US. Hintze, who has served in the Australian army, has long advocated for higher defence spending. This has materialised, initially in response to Russia’s invasion of Ukraine and more recently because Trump argues that many NATO members are not paying their fair share of defence costs. Hintze regularly attends the Munich Security Conference and witnessed the audience’s palpable shock as US Vice President Vance spoke in February 2025. “Trump’s language is also very strong because he is a businessman and not a diplomat. Trump is a disruptor in geopolitics who views Europe and NATO as free riders, but he alone cannot kill NATO,” argues Hintze, who is certainly braced for further disruption in geopolitics.

Politics

The 2021 trilateral Australia/UK/US AUKUS partnership is one post-Brexit geopolitical initiative that Hintze supports. He viewed sovereignty as the overriding argument for Brexit and declares that: “Brexit has been poorly executed, but I still think that the jury is out on the long-term economic costs and benefits. I am passionate about AUKUS, UK life sciences, big data expertise such as DeepMind, hypersonics, the UK forging its own trade deals, and the future of the UK, which my children are also very much part of. And I love being here”.

After his maiden speech on Australia Day 2023, Hintze has spoken six times in the House of Lords. After speaking against property right attacks and retrospective legislation in leasehold and freehold reform, his other contributions – on war widows’ ex gratia payments, Ukraine reconstruction, Horizon Europe, The Advanced Research and Innovation Agency and armed forces resilience – match his interests in the armed forces, geopolitics and science. He also attends the House of Lords without speaking and contributes to debates informally.

Hintze’s maiden speech was followed by speeches from two Scottish peers who sit on the opposing Labour benches namely Helena Kennedy and former NATO Secretary General George Robertson. Though Kennedy is vociferously anti-Brexit, she and Robertson do see eye to eye with Hintze on philanthropic initiatives, such as his rescue of 500 people from Afghanistan who were on the Taliban assassination list. Hintze maintains an active cross-party dialogue in the tearooms.

Hintze’s political donations to the Conservative Party are dwarfed by philanthropic donations close to USD 100 million, though he insists giving is not a competition.

Catholicism, voluntary work and philanthropy

After Hintze’s family left China, he lived in Australia and was mainly raised by his mother. He was educated by the Catholic Christian Brothers at St Leo’s College Wahroonga in Sydney, and has credited them with hugely informing his worldview, including his giving, which partly focuses on Christian and Catholic artefacts and temples. He has made donations enabling the restoration of the Michelangelo frescoes in the Pauline Chapel at the Vatican; he is also supporting London’s V&A museum’s refurbishment of the Raphael Court, where the Raphael Cartoons, first commissioned for the Sistine Chapel, are exhibited; and in 2019, via Patrons of the Arts in the Vatican Museums, he contributed to the restoration of the Scala Santa, the staircase that Christ is meant to have climbed to be sentenced to his crucifixion.

His voluntary work also focuses on Catholic causes. In 2014 Hintze was appointed by Pope Francis to the board of the Vatican Bank. His knowledge has also been sought out by governments and charities. In 2014 he was called to serve on the International Advisory Panel for the Australian government’s Financial Systems Inquiry (FSI) and subsequently appointed a Member of the Market Practitioners’ Panel of the UK’s Fair and Effective Markets Review.

Hintze has been honoured four times by three countries. He is a papal knight – a Knight Commander of the Papal Order of St Gregory since 2005 and a Knight Grand Cross since 2008 – of the world’s smallest city state, the Vatican; he has been a UK Lord since 2022, having previously been knighted in 2013; and has been a Member of the Order of Australia since 2013.

The Hintze Family Charitable Foundation, which he runs with his wife Dorothy, who he met at Harvard, has donated money to over 200 charities spanning the arts, culture, education and health, and armed forces charities including The Royal Navy and Royal Marines Charity. In the sciences, the Foundation’s support has ranged from astrophysics and cosmology to theoretical neuroscience and artificial intelligence at Oxford University, and the Stephen Hawking Foundation. It has also funded a Professorship of the Arts at Princeton University. In the arts it has sponsored galleries and acquisitions at the Victoria and Albert Museum and The National Gallery, London. In health, the Foundation has supported hospitals and medical research.

Aged 71 in 2025, Hintze has no plans to retire, and is looking forward to carrying on trading, reading, contributing to politics and pursuing philanthropy for as long as possible.