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SPECIAL REPORT
By Emer McGuckin, Citco (Canada) Inc – This Hedgeweek report looks at how manager-investor relations are evolving in the hedge fund world, and the role that service providers and vendors can play in facilitating innovative tools and techniques to aid capital raising, due diligence and investor reporting.
What has the pandemic changed most in terms of the manager-investor relationship?
Investors continued to demand higher levels of transparency from managers throughout 2020 on their Environmental, Social and Governance (ESG) principles, processes and procedures.
The increased presence of ESG factors in the investor relations process has been steadily gathering pace since 2019, but
SPECIAL REPORT
By A Paris – The way investment professionals work has changed. Hybrid business practices are coming into play, following successful vaccine roll-outs in many parts of the world, and the financial industry is adjusting to this new reality. The year has seen digitalisation accelerating across the hedge fund world, with investor relations (IR) and capital raising teams becoming accustomed to handling their business remotely. Raising capital through virtual media has been another challenge managers have had to wrangle with.
Clear and concise communication is the bedrock of successful investor relations and buoyed successful managers through 2020, especially in the early months when the
EMERGING MANAGERS SUMMIT
Start-up hedge funds’ success or failure often hinges on how managers build fee structures and foster investor relationships during the perennially tricky launch process, which industry participants warn can be frustrating, expensive and time-consuming.
The opening session of day two of this year’s HedgeweekLIVE North America Emerging Manager summit focused on fee structures, with panellists discussing seed and anchor capital, developing networks in the remote working environment, and the shifting allocator sentiment towards the industry.
Kieran Cavanna, co-founder and CIO of fund of hedge fund Old Farm Partners, noted the challenges that have arisen as a result of Covid-19, but
DIGITAL ASSETS
Cryptocurrencies and the digital asset ecosystem continue to move towards a mainstream institutional marketplace, with the number of institutional participants either already allocating or planning to allocate to the nascent asset class imminently.
ALLOCATIONS
Allocators are blurring the boundaries between the hedge fund and private equity sides of their portfolios, as once strictly segmented alternatives buckets begin to blend, according to investment firm Cambridge Associates.
Dan Aylott, Managing Director and Head of European Private Investments, at Cambridge Associates says that the distinction between hedge funds and private equity has become an increasingly “grey area”.
“Those parts of a portfolio are less distinct today than they were. Within Cambridge Associates, hedge funds don’t compete against private equity for the best ideas or vice versa, there’s a lot more overlap,” he commented.
The palette mixing of
EMERGING MANAGERS SUMMIT
Getting technology infrastructure correct on day one – and avoiding cutting corners despite budgetary pressures – is vital for start-up and emerging hedge funds, and staff with coding and tech backgrounds offer a “big step forward” during the initial launch period.
EMERGING MANAGERS SUMMIT
Despite the changing environment and challenges that Covid-19 has presented to operational and investor due diligence processes, sophisticated allocators still demand a “high level” of compliance and institutional infrastructure, according to Jenny Kim DeSmyter (pictured), Managing Director, Sales Strategy, SS&C Eze.
Speaking on the ‘Evolving Operational Challenges’ panel during this year’s HedgeweekLIVE North America Emerging Managers summit, DeSmyter explained how ensuring data remains protected is vital for both managers and investors in the remote working environment that has prevailed throughout the coronavirus pandemic.
The second session of day one spotlighted how operational due diligence and investor expectations are changing, and
EMERGING MANAGERS SUMMIT
ESG
Hedge funds and private equity are both improving their transparency over ESG. However, while on the private equity side, ESG is more seen as an investment opportunity, complexities remain on the hedge fund side around issues of reporting and shorting, according to Cambridge Associates.
Trudi Boardman, Hedge Fund Specialist at Cambridge Associate said that many hedge funds are still in the earlier stages of introducing ESG policies and processes, and that “there’s still a long way to go.”
She commented: “The ESG area is still very much a work in progress on the hedge fund side. There are challenges in
SHORT-SELLING
Hedge funds betting against Sainsbury’s have been left counting the cost of their negative wagers this week after the FTSE 100-listed supermarket giant saw its share price rocket on the back of fresh takeover rumours.
BlackRock Investment Management, Marshall Wace, and the Pelham Long/Short Master Fund are among the high-profile hedge funds positioned short against the UK supermarket giant, according to regulatory disclosures made to the UK Financial Conduct Authority.
The UK’s second-largest grocery chain initially saw its share price rocket by some 15 per cent on Monday following weekend media reports that US private equity firm Apollo Global Management
EMERGING MANAGERS SUMMIT
Emerging hedge funds must tread with caution in the face of increasingly complex operational infrastructure as their businesses gather pace and raise assets, speakers at Hedgeweek’s fourth annual HedgeweekLIVE North America Emerging Managers Summit said on Wednesday.
