Leveraging information in a process-driven structure
Massar Capital Management: Best Macro Hedge Fund – New York-based Massar Capital Management, LP was founded by Marwan Younes in 2015. Prior to founding the firm, Younes served as a portfolio manager at both Jamison Capital Partners and Graham Capital Management, where he traded discretionary macro and commodity strategies. The Massar Macro Commodity Strategy (“Massar”) was launched on 1st February 2015 and currently manages USD 433 million as of November 2020.
Massar blends a discretionary global macro approach with advanced data analytics to generate risk-adjusted returns uncorrelated to major market indices and other hedge fund strategies. This is evident over longer periods of time, such as the second half of 2019 and the first half of 2020, where the strategy generated strong returns in both broad risk-on and risk-off environments, but also in shorter periods of time such as during March 2020 where the strategy capitalised on periods of extreme volatility, generating high single digit returns for the month.
Uniquely, the strategy also avoided any material daily drawdown during this month. “Massar’s broad focus allows us the ability to have a portfolio of many smaller trades that have an attractive risk-reward profile, with the goal of capturing profits in volatile times while limiting drawdowns,” explains Younes.
As part of its research process, Massar builds tailor-made data collection engines specific to the structure of each data set. The data is then tickerised into a uniform categorisation system and used to generate supply/demand estimates, seasonal trends, intraday patterns, market positioning reports, data release estimates, weather predictions and macroeconomic analysis.
Moreover, Massar looks to achieve broad diversification by actively trading more than 70 markets across a range of asset classes and regions. The firm’s investment ‘edge’ comes from combining bottom-up fundamental market research initiated through Massar’s infrastructure with a top-down global macro view to identify a wide range of trade ideas with different return drivers.
“We will generally have risk spread across 25 to 50 distinct trade ideas, which are diversified across timeframe, market and structure. One of the unique advantages of Massar’s strategy is the ability to opportunistically deploy risk over a wide set of liquid, idiosyncratic ideas,” says Younes.
Technology lies at the heart of Massar’s research process and is predicated on processing data in a smarter way, combining it with market domain knowledge.
“Edge no longer comes from an informational advantage because information has become commoditised,” comments Younes. “Information on its own can often be too backward looking to be useful; edge comes rather in the ability to leverage and manage this information in a process-driven structure to predict probabilities of future events.”
As markets enter periods of stress, they often create a rich opportunity set for Massar’s strategies, where positioning and flows force market participants to take action to limit risk. “Uncertainty around economic data is positive for us, given the vast amount of data that we are collecting across markets and assets classes, which has boded well over the past 12-plus months,” states Younes.
In his view, Massar is well positioned to take advantage of the next big disruption, whether it be in crude again, gold, or equities or FX.
“The world will be a very different place in our view following this pandemic. This is a risk that we feel is being under appreciated by financial markets, but will lead to sustained volatility across global macro and commodity markets,” concludes Younes.
Chief Investment Officer, Massar Capital Management
Marwan Younes is the CIO of Massar Capital Management. Marwan has over 13 years of experience trading macro and commodity portfolios. He was previously a Portfolio Manager at both Jamison Capital Partners and Graham Capital Management. Prior to these experiences, he was a trader on the Index Arbitrage desk at Morgan Stanley and worked as an Analyst at Lazard Freres. Marwan received a MS in Civil Engineering from ENSTA, and a MS in Financial Engineering from Columbia University.