Tomorrow’s Titans 2010-2016: Revisited

How have they done?

HAMLIN LOVELL

Our four biennial Tomorrow’s Titans surveys – published in 2010, 2012, 2014 and 2016 in association with EY – contained in total 180 names who, together with our extended network, we judged to be rising stars with strong potential to generate high returns and grow assets. Many of them attained these aims. Despite complaints about rising barriers to entry in the hedge fund industry, it is still possible to start with tens of millions in assets, and grow to billions, within a few years. Growth drivers vary.

Asset growth can be driven by liquid alternatives vehicles such as UCITS and ’40 Act (and in some cases, such as Algebris, by long only strategies in addition to hedge fund strategies). Systematica has set up a UCITS for the equity market neutral strategy managed by Gregoire Dooms. Karya Macro has a UCITS on the Rothschild R-platform. Atreaus Macro’s UCITS sits on the Tages International Funds platform. Chenavari runs a UCITS on the Lyxor platform. One manager, Boaz Weinstein of Saba Capital, manages an Exchange Traded Fund (ETF).

Award winners
Managers with funds that have won of The Hedge Fund Journal’s UCITS Hedge awards, include Ashwin Vasan’s Trend Capital, on the UBP platform; Neil Toft’s Mygale, on the ML platform; Ben Wallace of Henderson; Thierry Lucas’ Portland Hill; and Elif Aktug of Pictet. (Other performance awards, for non-UCITS funds, have been won by managers including Tony Chedraoui’s Tyrus Capital). The vast majority of Titans – over 90% – have not yet launched a UCITS or other liquid alternatives vehicle however.

Direct lending and trade finance
At the other end of the liquidity spectrum, some managers, such as Chenavari or East Lodge in Europe, Czech Asset Management and MGG Investment Group and Birch Grove in the US, Myriad in Hong Kong, and Merricks Capital in Australia, have raised assets with longer lock ups in private equity style vehicles to pursue direct lending strategies. Markham Rae has diversified into another area of alternative finance: trade finance. These strategies feed hunger for yield.

Stock-picking
Several of the Titans, such as Tiger Global’s Chase Colman, Yen Liow’s Aravt Global, Gabriel Plotkin’s Melville Capital, Herb Wagner’s Finepoint and Lone Pine have profited from the bull market in US and Chinese mega-cap technology stocks. But most of them have been foraging for value in other sectors and often in mid-caps, judging by 13F filings.

Activists, including Alex Denner’s Sarissa, Scott Ferguson’s Sachem Head and Mick McGuire’s Marcato Capital Management in the US; Friederike Helfer of Cevian Capital, and Joseph Oughourlian’s Amber Capital, in Europe, are very visible even where their campaigns are not always public. The ultimate concentrated activist strategy only invests in one stock, viz Philip Hilal.

The extended bull markets in equities and credit have clearly been a tailwind for managers whose strategies are predominantly long-biased, but it has also been possible to perform well, and grow assets, while running market neutral strategies. Examples include Pictet’s Elif Aktug, in European equities, and Pooja Malik’s Nipun, in Asian equities. Federico Riggio’s Pegasus strategy, while not market neutral, has delivered very strong returns with low beta and equity market correlation. Simon Davies’ Sand Grove, Massi Khadjenouri’s Kite Lake, Tony Chedraoui’s Tyrus Capital, Neil Tofts’ Mygale, and John Melsom of Omni Capital are good examples of event driven and merger arbitrage managers that run their strategies with low market correlation.

Commodities, macro and volatility
Even in strategies perceived to have faced a challenging environment, such as discretionary commodity trading, there are winners like Pierre Andurand’s Andurand Capital. Paul Touradji is another survivor amid the graveyard of commodity funds. Discretionary macro trading has also seen lacklustre returns from many managers, but Rob Gibbins’ Autonomy Capital, Ashwin Vasan’s Trend Capital, Neil Philips’ and Jonathan Fayman’s GlenPoint, and Chris Rokos’ Rokos Capital have all thrived.

Similarly, though some systematic and quantitative strategies have found post-crisis markets relatively difficult, firms including Peter Muller’s PDT, Ray Iwanowski’s Secor, and Mark Carhart’s Kepos, have performed within their chosen niches. Down in Australia, Lyle Pakula’s AE Capital is generating a rather unique return profile. Long volatility strategies have perhaps faced the toughest climate, post-crisis, but Deepak Gulati’s Argentiere Capital and Nancy Davis’ Quadratic Capital have held up well.

New employers
Some Titans have made lateral career moves. After closing down Edoma, Pierre-Henry Flamande joined Man GLG, where he is now Chief Investment Officer, mentoring multiple portfolio managers who are finding 2017 conducive to alpha generation. Other managers who started their own shops also joined much larger firms: Imran Hussein set up CrossWave but now works for Capula. In Singapore, Tan Chin Hwee switched from Apollo to Trafigura. Geraldine Sundstrom moved from Brevan Howard to giant PIMCO. Matt Grossman shifted from Plural to ALG Investment Management.

New launches
Some Titans are onto their second launch. Althea manager James Harpel has set up Ex-Ante Partnership (via a brief stint at Fortress). David Slager of Attara launched Regals Fund. One of the joint Titans entries has split up: David Meyer is still at Contour Asset Management but Seth Wunder now runs Black and White Asset Management.

Manager mergers
A couple of managers have become part of industry consolidation that has seen the big get bigger. Mark McGoldrick’s Mount Kellet merged with Fortress, (which itself has been taken over by Softbank). Dag Lotveit’s Trient has been subsumed into neighbouring Oslo manager, Sector Asset Management.

Family offices
Some hedge fund managers are still active into their seventies or eighties, but the industry was never a job for life. Some managers are still running money but only their own. For instance, John Thaler of JAT and Chris Pia now manage their own family offices. Colm O’Shea of COMAC is also believed to be managing his own capital.

Returnees
A few managers who spun out of multi-billion shops later returned to their former employers. Jeffrey Enslin spent four years running HAWK Quantitative Strategies, before returning to Caxton Associates in 2013. Steve Matthews spent just over three years at Flintlock Capital Asset Management, before returning to Tudor, and now runs an agricultural analytics firm called Gro Intelligence.

Retirees
Some managers have effectively retired from managing money, though they may not have retired from work altogether. One time gas trader John Arnold ceased running Centaurus Advisors in May 2012, and now devotes his time to philanthropy and policy, via the Laura and John Arnold Foundation, which campaigns on issues including lowering US public pensions and lowering US drug prices.

If the average life of a hedge fund is still several years it is no surprise that some of the Titans have reportedly shut down. They include Ralph Nacey’s West Spring, Joshua Berkowitz’s Woodbine, Tim Babich’s Fortelus, Julian Barnett’s Ridley Park, Michael Pascutti’s Eagle, Gerard Satur’s MST Capital, Keith Anderson’s Anderson Global Macro, Buckley Ratchford’s Wingspan, Meredith Whitney’s Kenbelle Capital, Patrick Wolff’s Grandmaster, Tim Attias’ Canosa Capital, Daniele Benatoff’s Benros Capital, Kay Haigh’s Avantium, Sam Moreland’s OVS, and Mark Black’s Raveneur Group. As far as we know, only one of the aforementioned names was a real blow up in performance terms. Some of them performed well while others simply had mediocre returns, often in unfashionable strategies such as discretionary global macro where many of the largest players, such as Brevan Howard and Tudor, have been losing assets. Out of 180 names across the four surveys, we think the rate of closures is quite low.

We would never write off anyone who appears to have left the industry. Titan Greg Coffey was thought to have retired but is now reported to be contemplating a comeback. Like actors, hedge fund managers who are not currently active may be merely ‘resting’ in between roles. Time and time again those who have experienced mishaps (such as side-pocketed and contentiously valued African diamond mines) seem to reinvent themselves. The LTCM founders have been through many incarnations, and may yet find their way into a future Titans survey.

We believe these managers have done particularly well in terms of asset gathering and performance.

Elif Aktug
Fund Manager, Agora
Pictet Asset Management
Geneva

Elif Aktug is the lead fund manager of Pictet Asset Management’s Agora, a European equity market neutral strategy. Since the strategy was launched in 2011, its assets have grown to $2.3 billion. In recognition of its strong track record, Agora has received multiple awards. For example, the $1.4 billion PTR-Agora, the 2014-launched UCITS vehicle of the strategy, is a multiple winner of The Hedge Fund Journal’s best performing fund in the equity market neutral category. Agora’s success stems from the team’s disciplined approach to risk management. For instance, in a two-year period in which European stocks were moving more or less in lockstep, the team pursued a cautious approach to deploying capital. More recently, though, the fund has raised its gross exposure and increased its allocation to investment strategies that benefit from the ongoing European recovery, buoyed by what it sees as Europe’s improved economic and political stability.

Pierre Andurand
Chief Investment Officer
Andurand Capital
London, Malta, New York

While many commodity funds have closed down, Pierre Andurand has maintained strong performance both at Bluegold and at Andurand Capital, which was launched in 2013, and let former Bluegold investors carry over their personal high-water marks. The firm has grown assets to $1.1 billion as of November 2017. The liquid Andurand Commodity Fund strategy has profited mainly from directional trading, such as going short oil in late 2014 and going long of oil in 2016. It has also profited from relative value trades, for instance spreads between Brent Crude and West Texas oil in 2013. Andurand has in 2017 launched an equity strategy, the Andurand Commodity Equity Fund, and a UCITS fund.

Richard Barrera
Founder, Portfolio Manager
Roystone Capital Advisors
New York

Richard Barrera’s Roystone Capital Management has grown discretionary, regulatory assets to $3.8 billion. The firm’s 13F filing shows US equity holdings are clustered mainly in three sectors: information technology, healthcare and consumer discretionary, as of September 2017. Roystone’s performance has not come from the most overcrowded trades. In IT, Roystone is not in the very popular FANGMAN stocks but rather the manager owns technology companies including Citrix, Marvell, Alliance Data Systems, Ciena, Open Text, Xperi, Silicon Motion, and Integrated Device Technology. In healthcare, Roystone is invested in names including McKesson, UK Shire Pharmaceuticals, Envisoin Healthcare Holdings, and Cardinal Health. In consumer discretionary, Roystone owns stocks including Norwegian Cruise Lines, Cars Com, and Nextar.

J. Kyle Bass
Founder, Chief Investment Officer
Hayman Capital Management LP
Dallas

Kyle Bass’s Hayman Capital was one of the top performing hedge funds in 2016.  Bass takes some pride in his contrarian perspective, and remains something of a Cassandra on China’s economy, arguing that non-performing loans in the banking system are not only larger than the publicly stated figure but also bigger than the entire equity of China’s banks. Bass estimates China’s NPLs at 18.5 trillion RMB. More recently, Bass is amongst a small number of hedge fund managers – including Miller Value Partners’ Bill Miller and Altana’s Lee Robinson – who view cryptocurrencies as a potentially viable currency and asset class. Bass has pursued an activist shorting strategy, publishing his short theses in relation to companies such as Texas REIT, United Development. Bass has spoken at the SOHN Conference foundation event in New York.

Jonathan Berger
Founder, Chief Investment Officer
Birch Grove Capital
New York

Jonathan Berger’s Birch Grove’s flagship, multi-strategy credit strategy has outperformed the HFR hedge fund index by 13% from inception to November 2017, with around one quarter of the volatility. In response to reverse inquiries from clients, Birch Grove began providing focused access to strategies in the multi-strategy portfolio. Firstly, bespoke funds of one, investing in high quality, low beta, floating rate income. Secondly, co-investment opportunities in stressed and event-driven mid-market situations where Birch Grove can add value by engaging with borrowers. Thirdly, private credit, again in the mid-market segment, but distinguished from many direct lending strategies because financial sponsors are not usually involved. Fourthly, credit risk hedging strategies including tail risk hedging. Birch Grove seeks idiosyncratic opportunities that offer asymmetric payoff profiles, with downside protection and cheap optionality. Assets have grown to $1 billion.

Mark Carhart
Founder, Chief Investment Officer
Kepos Capital
New York

Kepos was co-founded in 2010 by Mark Carhart. It has grown assets to over $3 billion in a range of both traditional and more innovative systematic macro strategies, including trend-following CTAs, managed futures, and exotic beta. Kepos’ founders, including Bob Litterman, are former academics. An article co-authored by the Kepos team, ‘Exotic Beta Revisited’ by Mark Carhart, CFA, Ui-Wing Cheah, CFA, Giorgio De Santis, Harry Farrell, and Robert Litterman, was selected as the best article in the prestigious Graham and Dodd Awards, a CFA Institute program honouring the top Financial Analysts Journal articles each year. On CNBC in 2016, Carhart argues that equities and bonds are expensive, and revealed that the Kepos emerging market carry strategy could involve both long and short positions in emerging market currencies.

Tony Chedraoui
Founder, Chief Investment Officer
Tyrus Capital
Monaco

Assets above $2 billion make Tony Chedraoui’s Tyrus Capital one of the largest event-driven managers in Europe. The firm has 40 employees, including 18 investment professionals, across offices in London, Monaco and New York. Tyrus pursues a style of event-driven investing that has allowed it to maintain positive returns during challenging market conditions. The Tyrus Capital Event Fund (the firm’s flagship fund) seeks to implement an investment strategy that is not dependent on the general economic environment, and to produce returns that are correlated specifically to event trades rather than broader markets. Tyrus also offers co-investment opportunities in larger deals. In July 2017, Chedraoui launched a dedicated merger arbitrage fund to take advantage of the buoyant M&A levels following a period of relative weakness after the financial crisis. Separately from its event-driven strategies, Tyrus has, over the last few years, started investing in mature late stage private equity interests through its secondaries PE Fund platform.

Chase Colman
Founder, Managing Partner
Tiger Global
New York

Chase Colman’s Tiger Global has grown assets roughly 1,000-fold from $25 million in 2001 to discretionary, regulatory assets of $24 billion at year end 2016. Historically, information technology was often his largest sector allocation but over the past two years, consumer discretionary has become the biggest sector weighting. Tiger’s largest public US holding was top performing travel agency Priceline, followed by Chinese e-commerce firm JD.com, and Amazon, as of 30 September 2017. Tiger also owns a billion-dollar position in Leon Black’s private equity group Apollo. Other holdings include Mastercard, Visa, Domino’s Pizza and Netshoes. Tiger has been invested in mega cap FANGMAN stocks, Facebook, Amazon, Netflix and Google (now called Alphabet), and Microsoft, as well as China’s Alibaba. Tiger Global has as well invested in venture capital, private equity and pre-IPO companies mainly in the TMT sectors.

Stephen Czech
Founder, Managing Partner, Chief Investment Officer
Czech Asset Management
New York

Czech Asset Management LP (CAM) has raised some of the largest direct lending fund launches in the mid-market segment: $1.7 billion for its third fund in 2016, and $1.5 billion for its second in 2013. CAM’s latest launch in November 2017 was a revolving credit fund. CAM’s firm assets are around $4.5 billion of committed capital and the firm has co-investment capacity. CAM provides bilateral, floating rate, senior secured, direct loans to US mid-market companies with revenues between $75 and $500 million, and EBITDA between $7.5 and $50 million. CAM is also lending to smaller companies in Europe. CAM can offer borrowers a faster decision and more flexible, negotiated terms, than traditional lenders. Czech sits on the advisory board of the Chicago Booth School of Business.

Simon Davies
Founder, Chief Investment Officer
Sand Grove Capital Management LLP
London

Simon Davies’ Sand Grove runs a value-biased event-driven strategy that is delivering healthy returns with very low equity and credit market beta. Assets are around $1 billion and a hard close is planned in early 2018 at around $1.5 billion. Sand Grove trades a wide repertoire of hard and soft events, but in 2017 European mid-cap merger deals have presented some of the most compelling opportunities. Sand Grove has often acquired pivotal stakes and acted as a ‘suggestivist’ fulcrum investor in competitive bidding situations, in countries including the UK, Sweden and Germany. Sand Grove as well is active in equity capital markets. The manager has also been involved in event-driven credit situations, including the securitisation of Portuguese bank related instruments.

Patrick Degorce
Chief Investment Officer
Theleme Partners
London

Patrick Degorce’s Theleme Partners manages $2.8 billion in a global long/short equity strategy that has generated strong returns since its inception in 2009. Year to date in 2017 to November the fund is up 19.7%. Theleme has grown its team, hiring European equity specialist Zafar Ahmadullah from Schroders, Parus Shah from Fidelity Investments, John Sheridan from TCI (which Degorce co-founded). Theleme’s 13F filing shows holdings in financial stocks Bank of America, Charles Schwab, and Wells Fargo & Company; real estate manager Jones Lang Lasalle; publisher S&P Global Inc.; and put options on Tesla, as of 30 September 2017. Previous filings from 2016 have shown holdings in Charter Communications and in cement makers Summit Materials and Vulcan Materials, while those from 2015 reveal American Express, Visa and India’s HFDC Bank amongst holdings.

Alexander J. Denner
Founder, Chief Investment Officer
Sarissa Capital Management
New York

Alexander Denner’s Sarissa is amongst those activists who specialise in particular sectors. Sarissa’s focus is on healthcare, pharmaceuticals and biotech. Denner has actively managed his exposure, by sitting on some dry powder cash in 2015 when he judged valuations to be high, and adding exposure in early 2016 when he thought valuations were more attractive. Sarissa’s successful stock picks have included Ariad Pharmaceuticals, which was taken over by Japan’s Takeda Pharmaceuticals at a 75% premium. Denner has taken an activist stance in relation to companies such as Innoviva, where he has criticised remuneration and sought to nominate new directors to the board. Sarissa’s latest 13F filing shows its top five US public equity holdings were Biogen, Bioverativ, Medicines, Innoviva, and Achillion Pharmaceuticals, as of September 2017. Denner has spoken at the Milken Institute conference.

Derek Dunn
Co-Founder
Coastland Capital
San Francisco

Coastland Capital, which was co-founded by Derek Dunn, was previously called Overland Advisors. The firm runs around $1.1 billion in two strategies that have generated some of the most consistent returns in their spaces. The flagship corporate relative value, launched in 2010, focuses on capital structure arbitrage, event-driven, derivatives and special situations. The direct yield fund started in 2014 pursues specialty finance in short duration consumer, business loans and other types of debt. Coastland reported positions including put options on the China 25 Index fund and the VIX index; and ‘straddles’ comprised of both call options and put options on a 20-year Treasury bond fund, and on Barrick Gold Corp, as of September 2017, in its 13F filing. The firm also disclosed long positions in NXP Semiconductor, Bard, Lumos Networks, Time Warner, Dell Technologies, Altaba and Level Three.

Todd Edgar
Co-Founder, Chief Investment Officer
Atreaus Capital
New York

Todd Edgar’s Atreaus runs over $1.3 billion and focuses mainly on currencies and commodities, which differentiates the firm from those global macro managers that emphasise fixed income and equities. Consequently, Atreaus can be lowly correlated to other macro managers. Most of the Atreaus team have previously worked together before at banks including JP Morgan and Barclays. Todd Edgar features in a video under the ‘Meet the Managers’ section of Goldman Sachs’ GS Multi-Manager Alternatives Portfolios (which won The Hedge Fund Journal’s 2017 UCITS Hedge performance award for multi manager – liquid alternatives). Atreaus is amongst relatively few discretionary macro managers to have launched a UCITS. In July 2017, Atreaus set up the Tages Atreaus Macro UCITS Fund, together with Tages Capital.

Scott Ferguson
Founder, Managing Partner, Portfolio Manager
Sachem Head
New York

Scott Ferguson’s Sachem Head has rapidly grown assets from $1 billion in 2014 to some $4.5 billion in 2017. Sachem Head’s latest activist investment has reportedly been to privately campaign for a breakup of the UK’s Shire Pharmaceuticals. Sachem Head’s successful investments have included Autodesk, where Ferguson took a seat on the board, and consumer products maker Helen of Troy, where Sachem Head wrote a letter criticising levels of compensation, amongst other things. Sachem Head’s latest 13F filing shows its five largest positions were mainly in technology: Microsoft Corp, Dell Technologies, Google, Comcast Corp and Salesforce. Ferguson has spoken at the SALT Las Vegas conference, where in 2016 he revealed he had sold out of animal drugs maker Zoetis.

Loic Fery
Chief Executive Officer and Co-Chief Investment Officer
Chenavari Investment Managers
London

In 2017 Chenavari celebrated its 10th year of operations. The firm has grown assets from $50 million in 2008 to over $5.4 billion today. Chenavari is focused on European credit, structured finance and private debt. Its strategies run across the liquidity spectrum, from a liquid UCITS on the Lyxor platform, to a flagship multi-strategy hedge-fund and to $2 billion in vehicles with multi-year time horizons and private equity-style closed end structures focused on illiquid private credit opportunities. Chenavari also has two vehicles listed on the London Stock Exchange. Chenavari invests in corporate and financials bonds, convertibles, leveraged loans, asset backed securities and private debt bilateral loans, including a wide range of speciality finance activities, which is where founder Loic Fery sees some of the best opportunities in 2017 in private credit. In 2015, Dyal Capital Partners (part of Neuberger & Bergman) took a passive minority stake in employee-owned Chenavari.

Mala Gaonkar Haarman
Portfolio Manager
Lone Pine Capital
London

Lone Pine Capital toasted its 20th anniversary in 2017, and Mala Gaonkar Haarman has been there almost from the start, since 1998, making her one of the world’s longest serving female hedge fund managers, and indeed one of the most tenured of any gender. The firm is one of the world’s largest hedge fund managers, with $33 billion of discretionary regulatory assets as of year-end 2016, in long/short equity, long only equity and private markets. Lone Pine has disclosed holdings in many technology and internet companies that have generated stellar performance in recent years, including Alibaba, Activision Blizzard, Broadcom, FleetCor Technologies and Facebook. Other holdings include Constellation Brands, Charter Communications, and Quintiles. Lone Pine’s latest 13F also showed recent purchases of Priceline Group, UnitedHealth Group, Electronic Arts, PayPal Holdings and Comcast Corp, as of 30 September 2017.

Rob Gibbins
Founder, Chief Investment Officer
Autonomy Capital
New York

Robert Gibbins’ Autonomy capital runs over $5 billion and is one of 13 ‘legendary’ hedge fund managers allocated to by Theta Capital’s Euronext-listed Legends fund. Autonomy’s flagship liquid global macro strategy launched in 2003 and is amongst the better performing global macro strategies, including during the relatively challenging post-crisis years. Autonomy invests in developed and emerging markets over periods from three months to two years. Autonomy Capital’s Jersey entity has reported put options in a range of markets: the S&P 500, the Nasdaq, Amazon, and Netflix, and call options in the MSCI Brazil equity index, as of September 2017, in its 13F filing. Autonomy has sometimes launched opportunistic vehicles,which currently include property and Brazil and Spain, and have historically included a fund dedicated to investing in Iceland. The firm and its affiliates have offices in New York, London, Jersey, Nyon, Madrid and Sao Paolo.

Deepak Gulati
Chief Investment Officer
Argentiere Capital
Zug

Deepak Gulati’s Argentiere Capital has been resolute in maintaining its trademark long volatility stance, as realised and implied volatility have carried on grinding down to all-time lows. Argentiere runs in excess of $1 billion trading volatility across multiple asset classes, with a primary focus on equity volatility. Argentiere invests across a wide range of index and single stock volatility products, as well as active trading of VIX products and derivatives of the VIX, and implements both discretionary and systematic strategies in volatility. Argentiere has augmented its team with hires including Alexis Maubourguet from BTG, and Nikolay Aleksandrov from Bluecrest. Gulati has been a speaker at the Volatility Investing event in London in 2017, and the Global Volatility Summit held in New York in 2017.

Matthew Halbower
Founder, Chief Executive Officer, Chief Investment Officer
Pentwater Capital Management
Evanston

Matthew Halbower’s Pentwater Capital Management marked its 10th anniversary in 2017. The hedge fund manager has grown discretionary, regulatory assets to $6.2 billion thanks partly to highly ranked performance. Pentwater’s strategies include equity events, equity opportunities, merger arbitrage, and credit opportunities. The strategies will sometimes combine a long equity position with both call and put options in the same firm, reporting this combination for NXP Semiconductors, Monsanto and AT&T. Other positions disclosed in its 13F filing include Level Three communications, Alibaba, Rockwell Collins, Scripps Network Interactive, Turquoise Hill Resources, Tribune Media, and Dell Technologies. As well, Pentwater has a put option on the ‘Spider’ S&P 500 ETF. Pentwater has also held debt in American Apparel. Pentwater is headquartered in Evanston, Illinois, with satellite offices in Minneapolis and London.

Friederike Helfer
Partner
Cevian Capital
Zurich

Friederike Helfer has featured in both our 2014 ‘Tomorrow’s Titans’ survey and our 2015 ‘50 Leading Women in Hedge Funds’ survey. She is Cevian’s lead partner on US-listed Platform Specialty and on UK listed Vesuvius. Ceramics firm Vesuvius originates from the demerger of a former Cevian’s investment, UK engineer Cookson, where Helfer led the analytical and engagement work.  CFA Charterholder, Helfer, is also currently an independent director on the board of Finland’s Valmet Corp, which also demerged from a Cevian portfolio company, Metso, in January 2014. Cevian is Europe’s largest activist fund manager with assets above €13 billion. The firm is a ‘constructive’ operational activist that typically holds stocks for between three and seven years and does not use proxy fights or write public letters.

Carl Huttenlocher
Founder, Managing Partner, Chief Investment Officer
Myriad Asset Management
Hong Kong

Carl Huttenlocher’s Hong-Kong based Myriad Asset Management Ltd. has reportedly grown assets to over four billion, as of March 2016, according to Preqin Hedge Fund Online. This makes it one of Asia’s largest hedge fund managers, and belongs to Preqin’s top ten ranking. Myriad’s 13F filing, as of 30 September 2017, shows equity positions included some of the world’s best performing technology stocks, including Alphabet (Google), Jcom, Electronic Arts, Tesla, Nvidia, Nevro, TTM Technologies, BeiGene Ltd., ZaiLab, CommScope, Molina Healthcare, Dish Network, Symantec Corp, Baozun Inc., Wayfair, Qualcomm, New Oriental Education Technology Group Inc., TPG Pace, Yum China Holdings, Ctrip, Melco Crown Entertainment, Silver Run Acquisition Corporation, Avista Healthcare, Qiagen, IAC, Yum Brands, Priceline, Landcadia Holdings, ZTO Express and RYB Education. The manager also held some convertibles, acquisition corporations, warrants, and exchange traded funds.

Ray Iwanowski
Founder, Chief Investment Officer
SECOR
New York

SECOR, which was co-founded by Ray Iwanowski, has grown discretionary regulatory assets to $25.8 billion as of year-end 2016. Secor offers quantitative-based alpha strategies. In a recent thought leadership piece entitled ‘When The Bond Bull Run Ends… Then What?’ SECOR’s Scott Freemon argued against widely followed risk parity approaches, saying “risk parity represented a huge leap forward in investment thinking, but levered bonds are terrifying and equal weighting is arbitrary.” He further argued in favour of popular CTA strategies, stating “trend strategies provide positive convexity and downside hedging without the return drag of option hedges”. SECOR also offers tailored investment advisory services as a co-fiduciary, and portfolio solutions, including tail risk hedging. SECOR in 2017 opened up a West Coast office in Palo Alto, led by two new partners ¬– Kenneth Frier and Gretchen Tai – complementing its New York and London offices.

Jason Karp
Founder, Chief Executive Officer, Chief Investment Officer
Tourbillon Capital
New York

Karp has a strong long term performance record for his long only and long/short strategies, which have reportedly grown assets to $3.4 billion. Karp has reportedly raised concerns about the valuation of some large cap US technology stocks. The largest US equity position disclosed as of September 2017 in Tourbillon’s latest 13F filing was a put option on the S&P 500 index, and the firm also reported a put option on a Russell 2000 ETF. Tourbillon’s largest long positions were reported as being Spectrum Brands, Alexion Pharmaceuticals, Dish Network, FleetCor Technologies, and Ebay. In the biotech sector, Karp argued that Sarepta Therapeutics could rise 200%, at the SALT Las Vegas conference in May 2017, and the stock had appreciated by about 80% as of November 2017. Karp has also spoken at the Reuters Global Investment Outlook Summit.

Massi Khadjenouri
Co-Founder, Chief Investment Officer
Kite Lake
London

Massoumeh (‘Massi’) Khadjenouri’s Kite Lake, which launched in 2010, has grown assets to $770 million, making the firm one of the largest co-founded by a woman, in Europe or globally. Kite Lake’s flagship liquid event-driven strategy has generated strong risk adjusted returns, which are above average for the peer group, and has reportedly soft closed. In May 2017, Kite Lake launched an Irish UCITS focused on merger arbitrage, the KL Event Driven UCITS Fund, managed by Frederik James Sherman, who previously worked at PSAM. Kite Lake’s business principles include corporate independence, independent board oversight, transparency for investors, and alignment of interests.

Stephen Kirk
Chief Investment Officer
Pelham Global Financials
London

Stephen Kirk’s Pelham Global Financials has generated strong returns, partly from being positioned for multiple expansion in selected financial stocks. In May 2017, he told the UBS Investor Conference that European banks were his top pick on a 12-month view, based on their valuation discounts to US banks, and the economic recovery in Europe. Kirk remains very much cognisant of risks however, and at the same UBS event he opined that the biggest risk for financial markets is politics in the Anglo-Saxon world. Kirk allows for this risk in the sizing of different positions. Pelham Global Financials Master Fund Ltd. has disclosed short positions in several UK financials (Countrywide plc, Aldermore Group plc, Foxtons Group plc, Virgin Money Holdings UK plc) over the past two years.

Yen Liow
Partner, Senior Investment Analyst
Aravt Global
New York

Yen Liow’s Aravt Global has generated strong performance partly through well timed sector rotation and high conviction, concentrated sector and stock bets. At launch in 2014, healthcare and energy were amongst his largest US sector weights, but by 2017 the surging information technology sector was his largest US sector allocation by far. Aravt only reported 13 US equity holdings, which included IT firms Paypal, Visa, Facebook, Google, CDK Global and Chinese group Baidu. In other sectors, in consumer discretionary, Aravt held Charter Communications, TJX, Restaurant Brand, and Altice USA. In Industrials, Aravt held Transdigm and LKQ Corp, and in consumer staples the manager owned Walgreen Boots. By way of contrast, no US equity holdings in energy, healthcare or financials were disclosed in Aravt’s latest 13F filing as of September 2017.

Greg Lippman
Founder, Chief Investment Officer
Libre Max
New York

Greg Lippman’s Libre Max has attained fame partly because Lippmann was played by Ryan Gosling in the 2015 movie, ‘The Big Short’. Libre Max has also grown its assets from a few hundred million at launch in 2010 to $3.2 billion in discretionary, regulatory assets as of year-end 2016. Libre Max is renowned for its expertise in the US structured credit markets. LibreMax invests across multiple structured credit sleeves – non-agency RMBS, consumer ABS (including autos and student loans), CMBS, CLOs and CDOs. It has launched specialist credit funds investing in private student loans, CMOs and CLOs. Libre Max is one of three specialist credit managers selected for Kempen’s Diversified Structured Credit Pool, which featured on the cover of the October 2017 issue of The Hedge Fund Journal.

Alistair Lumsden
Chief Executive Officer, Chief Investment Officer
East Lodge Capital
London

Alistair Lumsden’s structured credit and direct lending specialist, East Lodge Capital, has grown assets to around $1.1 billion since it was founded in August 2013. The strategy is up over 13% in 2017 to October, according to an investor. East Lodge has a global mandate but has recently found more opportunities in European countries, including the UK, France, Germany, Italy and Spain. Key portfolio themes have included legacy UK Residential Mortgage Backed Securities with low LTVs and a high likelihood of being called at par, European CLOs and European CMBS. These sectors offer higher yields than corporate debt, and given their floating rate nature should benefit from normalisation of BoE and ECB policy. East Lodge has also pursued direct lending against collateral such as office buildings and purpose-built student accommodation in the UK.

Peter Muller
Founder, Chief Executive Officer
PDT Partners
New York

Peter Muller’s PDT (‘Process Driven Trading’) has bucked the trend towards lower hedge fund fees. PDT reportedly charges management fees of 3% and performance fees of 50% above a benchmark. It has also avoided the fashion for greater fund liquidity: seed investor, Blackstone, is reportedly locked up for seven years. These terms are possible due to PDT’s exceptionally strong performance from strategies including statistical arbitrage, dating back to 1993 when PDT sat inside Morgan Stanley. PDT spun out in 2013 and today manages over $4 billion, having reportedly returned capital to some investors. PDT’s 13F filings report hundreds of equity holdings because the strategy is highly diversified and takes small position sizes in each name. Demonstrating the connections between mathematics and music, Muller is also a singer-songwriter who has three albums.

Joseph Oughourlian
Founder
Amber Capital
London

Amber Capital continues to see attractive opportunities in its European event driven and activist strategy, particularly in Southern Europe. As the capital of Southern European-based companies is less controlled today than in the past, Amber sees a growing opportunity for activist investors in the region to engage constructively with company management to improve corporate governance and create value. In France, a consortium of creditors led by Amber negotiated a deal with the management of the directories provider, SoLocal, to restructure the company’s debt through a debt to equity swap. Meanwhile, on behalf of shareholders, Amber exercised minority shareholder rights to vote out the CEO and Chairman in order to implement a new strategic plan. In Italy, Amber recently led a successful push by minority shareholders against Parmalat’s majority owner, Lactalis, the French dairy company that had wanted to take Parmalat private at a low price. In Spain, Amber is a major shareholder with a 19.3% stake in Spanish publishing group Prisa, and voted against the remuneration package of Prisa’s Chairman Juan Luis Cebrián.

Lyle Pakula
Founder, Chief Investment Officer
AE Capital
Melbourne

Lyle Pakula’s Melbourne-based AE Capital continues to generate utterly uncorrelated returns in its systematic FX strategy, which applies quantitative analysis to fundamental data. The manager also selectively uses discretion to identify themes (such as QE Taper/Fed Rate Rises, Global Risk, Eurozone Crisis, US economy, China Growth, Commodities, and the Carry Trade Arbitrage) and for risk management. AE trades liquid, developed currency markets both versus the US dollar and as crosses. AE trades over a range of time frames. AE Capital has generated positive returns every year since inception over a period that has been challenging for some competitors. Assets have reached $300 million and are expected to cross $400 million in early 2018, COO Darran Goodger told us.

Ryan Pedlow
Founder, Chief Executive Officer
Two Creeks Capital
New York

Ryan Pedlow’s Two Creeks Capital has added value partly by actively rebalancing sector exposures. By Q2 2017, exposure to US healthcare equities had been removed with animal drugs group Zoetis sold. Since early 2016, Two Creeks has been steadily expanding its allocation to US energy stocks, such as Pioneer Natural Resources, RSP Permian, Diamondback Energy, Weatherford International, and Keane Group, while scaling back financials, such as India’s HDFC Bank, and consumer discretionary, such as Lowes Company, which has been exited entirely while the Home Depot holding was reduced. Two Creeks owns both long stock and call options on Starbucks coffee. The manager has the same combination of positions for Visa, its largest long US equity holding. Data comes from the 13F filing as of September 2017.

Neil Phillips and Jonathan Fayman
Co-Chief Investment Officers
Glen Point Capital
London, New York

Glen Point Capital has grown assets to $2.3 billion as of November 2017. Performance has been strong, according to investors. Glen Point’s strategy is global macro, with an emerging markets focus. The firm has an HQ in London and another office in New York. The team has grown to 26 people, with Rodrigo da Fonseca as Head of Credit Strategy, Sean Shepley as Head of Research and Hopewell Wood as CEO. Philips, Fayman and da Fonseca previously worked for Bluebay; Shepley was at Credit Suisse and Wood was at COMAC.

Gabriel Plotkin
Founder, Portfolio Manager
Melvin Capital
New York

Gabriel Plotkin’s Melvin Capital has reportedly generated some of the highest returns of any long/short equity manager.  Returns have come partly from call options on a number of top performing US stocks, such as Constellation Brands, Alibaba, Amazon, Deere, Wyndham Worldwide, Facebook, Google, FleetCor Technologies, and Sherwin Williams. Melvin has also had a put option in Signet Jewellers, which recently issued a profit warning and is one of the worst performing stocks of 2017. Other put options in the consumer staples, consumer discretionary and retail sectors have included Kroger, Harley Davidson, Macys, Rent a Centre, Restaurant Brand, Hanesbrands, Vista Outdoor, USG, Six Flags, Sonic, Gamestop, JC Penney, Sleep Number, Tailored Brands, and L Brands, per the latest 13F. Plotkin has spoken at the Boston Investment Conference in 2017.

Robert Polak
Founder, Chief Executive Officer
Anchor Bolt Capital
Chicago

Robert Polak’s Anchor Bolt Capital has produced high returns from stock picks including those that come from its focus on four sectors: basic materials, capital equipment and consumer goods, energy, and transportation and leisure. Anchor Bolt has disclosed several hundred US equity positions in its 13F, in a range of sectors. Healthcare holdings have included Baxter International, Zimmer Holdings, Sabra Healthcare REIT, McKesson Corp, and Haemonetics Corp. Industrials include BWX Technologies, and Orbital ATK. In finance, Anchor Bolt has owned smaller banks including Huntingdon Bancshares, M&T Bancorp, First American Financial Corp, New York Community Bancorp, and Suntrust Bank, all of which are perceived to be potential beneficiaries of a lighter US regulatory regime. Anchor Bolt owns Broadridge Financial Solutions, which has been profiled in The Hedge Fund Journal.

Adrian Redlich
Founder, Chief Investment Officer
Merricks Capital
Melbourne

Adrian Redlitch’s Melbourne-based Merricks Capital celebrated its ten-year anniversary in 2007. The manager runs two alternative strategies. One is amongst a small number of systematic trading funds focused purely on soft commodities including grains, oilseeds, vegetable oils, dairy, cotton, sugar, energy and livestock. Having started as discretionary commodity traders, Merricks has evolved the strategy into a systematic approach designed to harvest risk premia from futures markets. The commodity strategy uses a range of technical and fundamental data, including open interest, volatility, seasonality and weather. Merricks also has a non-bank credit, direct lending strategy which lends against hard asset collateral including property, construction, land banks, agriculture and property. The credit strategy typically lends for one to two year periods and targets an IRR of 12% or more.

Federico Riggio
Portfolio Manager
Kairos Partners
London

Federico Riggio’s Kairos Pegasus long/short equity strategy has generated exceptional returns of over 150% since 2014, with low correlation to equity markets. Riggio has often been invested in idiosyncratic, event-driven situations such Fiat and the subsequent spin out of Ferrari, or Vienna Airport, a position which was deep value and ended up being taken over. Other portfolio themes have included Italian general insurers trading below book value and the consolidation in the utility sector across Europe. The latter theme was developed and shared with Vittorio Villa, who runs Kairos KEY, another successful long/short equity fund focused primarily on regulated and semi regulated business. Currently Riggio’s largest position and a significant contributor to the performance of the fund this year is Volkswagen/Porsche. Riggio expects that the restructuring going on in the company will have a transformational impact on the company’s cash generation. The award-winning Pegasus strategy manages over €1.5 billion and can be accessed through a Luxembourg RAIF or a UCITS. Kairos, a leading European Fund Management house founded in 1999 manages around €11 billion.

Davide Serra
Founder, Chief Executive Officer, Chief Investment Officer
Algebris Investments
London

Algebris, which was founded by Davide Serra in 2006, has grown assets to €10.2 billion as of October 2017, which is amongst the most substantial asset growth of any financial equity and private debt manager. The Algebris USP is equities DNA: approaching credit from an equity perspective. The Algebris Financial CoCo Fund was one of the first set up to invest in contingent convertibles. Algebris runs €5.6 billion in UCITS strategies, including Alberto Gallo’s Algebris Macro Credit Fund, which expanded the Algebris repertoire beyond pure financials. As well, Algebris invests in private debt, in closed end vehicles with multi-year lockups. Algebris has also expanded its geographic footprint, with offices in London, Milan, Boston, Singapore and Luxembourg. Serra and Gallo are active on social media where they have been vocal critics of Brexit.

Matthew Sidman
Founder, Managing Partner, Chief Investment Officer
Three Bays
Boston

Matthew Sidman’s Three Bays has delivered competitive returns, partly by rebalancing sector exposures actively. In 2015 Three Bays had as much as 40% of its US equity exposure in information technology, but by September 2017 IT was down to almost zero. Over the same period, consumer discretionary has grown to the biggest sector weight, and within that Churchill Downs has become the largest single stock position, followed by Red Rock Resorts, Sinclair Broadcast Group, and call options on Charter Communications. Healthcare has been a more stable sleeve, with positions including Quintiles, The Medicines Company, and HCA. In energy, Three Bays owns coal miner Peabody Energy, and oil companies Pioneer Natural Resources and Anardarko Petroleum. Three Bays’ largest position has been a put option on the Russell 2000 index. All per 13F filings as of September 2017.

Jens-Peter Stein and Kornelius Klobucar
Co-Founders
Stone Milliner
Pfäffikon

Stone Milliner’s co-founders, Jens-Peter Stein and Kornelius Klobucar, have in five years swiftly grown the firm to one of the world’s biggest global macro hedge fund managers. Assets above $6 billion rank London and Pfäffikon-based Stone Milliner Asset Management (‘Stone Milliner’) amongst the largest discretionary global macro hedge fund managers in Europe. While many discretionary macro managers claim that the market environment has been challenging, and have made lacklustre returns or even losses, Stone Milliner has reportedly generated positive returns since inception, and outperformed indices of global macro managers. Stone Milliner has recently opined that macro market conditions should normalise. The manager believes that inflation and interest rates are heading higher, particularly in central and eastern Europe, and has expressed this view through short positions in selected fixed income markets, and long positions in certain currency markets.

Ross Turner
Founder
Pelham Capital
London

Ross Turner’s Pelham Capital reportedly manages $4 billion. Pelham runs one of Europe’s best performing long/short equity strategies. Turner is a long-term investor who will often hold positions for multi-year periods and seeks out value in relatively neglected mid-cap stocks. For several years, Pelham has been the largest shareholder (after Weichai Power Company Limited) in industrial trucks maker, KION AG. The Pelham Long/Short Master Fund held 2.95% of KION stock as of July 2017 and the share price has roughly doubled over the past few years. Pelham is mainly invested in UK and European companies, but has some US exposure, such as restaurant food delivery service, GrubHub, per its latest 13F filing. Pelham Capitalhas also become a home for a separate strategy: Pelham Financials, run by Stephen Kirk, who has also featured in our ‘Tomorrow’s Titans’ surveys.

Galia Velimukhametova
Portfolio Manager
Man GLG
London

Man GLG’s Galia Velimukhametova and Ide Kearney have both featured in both The Hedge Fund Journal’s ‘Tomorrow’s Titans’ and our ‘50 Leading Women in Hedge Funds’ surveys, both in association with EY. Velimukhametova has been managing European distressed debt and credit portfolios for fifteen years, the last nine at Man GLG. She has been deeply involved in several live corporate restructurings, playing a pivotal role in the ultimate outcomes. She is finding that heightened political and economic risk in Europe throws up long and short opportunities in energy, financial and retail. Whereas many distressed debt strategies are long-only, long-biased and illiquid, Velimukhametova’s relatively liquid strategy takes long and short positions in high yield debt, leveraged loans, hybrid capital, financial paper, distressed debt, equity, and sovereign debt. In June 2017, she spoke at the Goldman Sachs XVII European Hedge Fund Symposium in Rome.

Herbert Wagner
Founder, Managing Partner, Chief Executive Officer
Finepoint Capital
Boston

Herb Wagner’s Finepoint has produced high returns from a strategy highly concentrated on a small number of sectors and stocks. He has consistently maintained roughly half of his US equity book in energy, up to one third in financials, with intermittent exposures to industrials, information technology telecommunications and a few other sectors. Finepoint is also highly concentrated in terms of stocks, only disclosing nine US equity positons in his latest 13F. Energy holdings were YPF, Cheniere Energy and Enbridge Energy Partners LP. IT holdings were Altaba and China’s Sina. In real estate, Argentinian property developer IRSA is owned. Another Argentine firm, Cresud, which is active in Brazilian agriculture, is owned in the consumer staples sector. In telecoms, the position is a mandatory convertible preferred in Frontier Communications. All from 13F filings as of September 2017.

Boaz Weinstein
Founder, Chief Investment Officer
Saba Capital Management
New York

Boaz Weinstein’s Saba Capital Management has grown assets to $1.7 billon from 2009 to 2017. Saba runs four strategies including some less common ones and one of the only hedge fund strategies wrapped in an ETF. The flagship is credit relative value, which pursues market neutral trades in debt and equity. The second is a tail risk hedge strategy mainly using credit default swaps. Saba’s closed end funds (‘CEFs’) strategy identifies CEFs trading at a discount to NAV, hedges the risk of rising interest rates, and sometimes uses activist tactics to try and close the discount. The CEF strategy can be accessed through the Saba Closed End Funds ETF, which has ticker CEFS. At the Delivering Alpha conference in September 2017, in New York, Weinstein expressed the view that high yield debt is overvalued, and revealed that he has capital structure arbitrage trades that are long equity and short debt of retailers and hospital firms.
Michael Weinstock
Founder, Chief Executive Officer, Co-Portfolio Manager
Monarch Alternative Capital
New York

Michael Weinstock co-founded Monarch Alternative Capital, which celebrated its 15th year in 2017. The firm manages $4.5 billion and has 69 staff in New York and London. Monarch invests in distressed debt following an event driven approach that invests across the capital structure, and globally. Public US equity holdings reported in its 13F include Arch Coal, Spirit Realty Capital, Resolute Energy Corp, Scorpio Tankers, and Uniti Group, and a put option on the S&P 500index while Monarch sold out of Star Bulk Carriers Corp. Monarch has also made private equity investments, such as buying properties sold by UK care home operator, Four Seasons Health Care, and taking a stake in the UK’s Coop bank. As well, Monarch has invested in Spain, Portugal and Greece.

Danny Yong
Founder, Chief Investment Officer
Dymon Asia Capital
Singapore

Dymon Asia Capital, co-founded by Danny Yong and Keith Tan in 2008, had grown assets to $7 billion as of October 2017, making it one of Asia’s largest hedge fund managers, according to an article in the Australia Financial Review, on Dymon Asia’s website. Yong sits on the APAC Committee of the Standards Board for Alternative Investments (‘SBAI’), formerly known as the Hedge Fund Standards Board. In 2015, after losses on a Swiss Franc trade, Dymon took the unusual step of retrospectively refunding 2014 performance fees to investors. Having been seeded with $100 million by Paul Tudor Jones, Dymon is now playing a role in nurturing the next generation of Asian hedge fund managers. In May 2014 Dymon received $500 million Singapore sovereign wealth fund, Temasek Holdings, to develop a hedge fund seeding platform, Dymon Asia Manager Solutions. Its first investment was in Carl Vine’s long/short equity Port Meadow fund. Dymon has also branched out into private markets with Dymon Asia Private Equity.