Finding new ways of navigating the changing landscape
Enko Capital: Best Credit Hedge Fund — Hedge funds must find creative ways of demonstrating their skill and ability to solve the issues their clients face. The infrastructure they employ will also be thrown into the foreground as the sector steels itself to face the challenges ahead.
“As hedge funds continue to adapt to changes caused by Covid-19, the infrastructure firms employ will have to continue to be relevant and sufficient. Alongside this, firms will have to keep up with the increased levels of reporting and regulatory requirements that institutional investors expect,” comments Craig Stanley, CFA, Chief Operating Officer, Enko Capital. In fact, from an operational standpoint, the firm has deepened and extended its operational and IT infrastructure to ensure the team is able to work remotely for as long as necessary.
Although Enko made a seamless transition to remote working, it has posed challenges to capital raising. “In-person meetings and due diligence are now conducted virtually. This has caused a decline in progress with certain investors who wish to complete their due diligence in-person. Having said this, Enko was still able to onboard a number of new investors, including a NYSE-listed US corporate pension fund, in 2020,” observes Stanley.
From an investment perspective, Enko adapted to the uncertainty caused by the pandemic. In terms of strategy, the investment team sought new ways to navigate the ever-changing market conditions and took advantage of the opportunities resulting from these changes. In 2020, this led to the Enko Africa Debt Fund producing its best annual return since inception.
In terms of the growth outlook, following a strong year, Stanley believes erratic economic data and policy changes make allocation decisions more difficult for institutional investors. This uncertainty combined with the extreme limitations on travel and in-person meetings will continue to make it difficult for managers to attract investors and inflows: “To overcome this, hedge funds will have to fundamentally rethink, reorganise and adapt their capital raising to new paradigms that even allocators are having difficulty adopting.”
In this environment, Enko is striving to become the market leader in African-focused investments. “Having generated positive calendar-year returns since 2017 across a wide spectrum of market returns, the Enko Africa Debt Fund has been able to support our clients and their internal investment objectives. The Fund has successfully achieved its absolute return mandate over the last 4.5 years,” Stanley says.
The firm is also aiming to further diversify its business by seeking opportunities across Africa that do not fall within the scope of its existing strategies. “Over the coming year, we expect the industry to be affected by the speed at which governments allow businesses and their employees to return to normal working routines, and the affectedness of vaccines across the world.
“Enko is well placed to deal with this. Our local presence in Africa, with offices in Johannesburg, Abidjan, and Port-Louis, allows us to be in closer proximity to our investment universe. This allows us to continue to understand the economic and political landscape we are dealing with and make better informed investment decisions,” Stanley outlines.
Craig Stanley, Chief Operating Officer, Enko Capital
Craig is COO at Enko Capital, an Africa-focused investment firm based in London and Johannesburg managing an absolute return Africa debt strategy and a pre-IPO Africa private equity fund. Craig has over 23 years of investment experience, working both as a pension/superannuation consultant, as well as for asset management firms. Over his career, he has lived and worked in the US, Japan, Australia, and the United Kingdom. For the past 12 years Craig has been immersed in the African and global frontier space in listed equities, debt, real estate, private equity, and private debt. Prior to joining Enko, Craig was a Managing Director at Terra Partners, a global frontier hedge fund manager. Craig has authored dozens of articles and white papers on a wide range of frontier capital market and economic topics. Craig earned his BA in Political Economy from New York University where he graduated magna cum laude at the age of 20, and a Masters in Japanese at the University of Colorado, Boulder. Craig was awarded the Chartered Financial Analyst designation in 2005.