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Fundamental analysis to drive outperformance

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Hedge Invest: Best Liquid Alternative Fund – Credit Hedge – As the market environment is expected to become more volatile, asset managers who can rely on truly absolute return strategies and deep fundamental analysis should outperform.

“Deep intelligent research is the necessary condition of all our investment decisions. Especially in view of the increasing volatility and challenging market movements we anticipate,” Filippo Lanza, chief investment officer at Numen Capital, observes. “In recent years, at Numen, the subdelegated manager for Hedge Invest, we have developed our fintech platform. This allows us to remotely share research and analysis across our team, relying on a powerful mix of artificial and human intelligence to spot swiftly and efficiently the most relevant pieces of information for our investment process.”

This platform harnesses the power of machine learning and natural language processing algorithms. This helps Numen’s professionals to efficiently manage an ever-increasing amount of data and quickly make sense of it via a uniquely collaborative process between analysts and fund managers.

“We have built an advanced artificial intelligence platform in-house leveraging structured and unstructured data to provide insights in macro markets. We deploy this expertise via discretionary and systematic macro strategies,” Lanza underscores, “We also have an open collaborative environment between discretionary and quantitative professionals within Numen to get the best out of both.”

Lanza explains how the future challenge will be the real test of active asset management: “Performance from active strategies is expected to offer superior returns in a more volatile and complicated set of financial conditions.”

This comes after a period of expensive and inefficient alternatives to long only vehicles being offered since 2009.

In view of this, the firm’s main focus is capital preservation, with performance coming in second. “We are continuously improving our process to make it more robust and efficient, relying on all the powerful tools offered by new technology in strengthening our investment process,” stresses Lanza.

The HI Numen Credit Fund is one of the firm’s flagship funds. It is a credit-focused multi-strategy absolute return funds which applies deep fundamental analysis to compelling investment opportunities across the capital structure.

The fund invests primarily in financials, corporates, and sovereigns with a keen focus on liquidity and has a European focus but a global mandate.

In 2020 HI Numen Credit Fund made money through its macro book, which helped protecting capital in the volatility of Q2, and through the corporate book both with idiosyncratic shorts (i.e. Wirecard) and longs (stressed and distressed positions).

Lanza thinks the environment is still favourable for absolute return strategies while the outlook is very negative for long only funds: “At the moment we remain focused on special situations, working on the entire capital structure of the target companies, from debt to convertible to stocks, and on adding a lot of premium on tail hedges, both on equities and government bonds.” 

Filippo Lanza, Founder, Numen Capital – the sub-delegated manager for HI Numen Credit Fund
Filippo Lanza is CIO of Numen Capital, which he co-founded in 2008. Numen Capital is the sub-delegated manager of HI Numen Credit Fund, one of the fund in the platform of Hedge Invest Sgr. Previously Filippo was a MD in Global Principal Finance at Deutsche Bank from 2006 to 2007 and, from 2004 to 2005, PM of Ferox Credit Fund at Ferox Capital Management. From 2000 to 2004 he was Head of credit trading in Europe at Lehman Brothers. A CFA since 2001, he graduated (summa cum laude) in Economics from Bocconi University in 1996; he also studied at the LSE (UK, 1994) and Wharton – MBA Program (USA, 1994).

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