London-based Quadra Capital Partners LLP was established in 2013 and became authorised by the FCA in 2014. An independent investment advisory firm, Quadra launched with a conviction that it could add real value in the liquid alternatives space, in particular to European institutional & family offices clients who prefer UCITS funds.
This led Quadra to establishing a SICAV UCITS platform in Luxembourg and saw the release of its first fund – Quadra Capital Global Equity Alpha – in August 2015; a UCITS V-compliant global long/short equity fund with a USD2 billion AUM capacity.
Guillaume Touze is CEO of Quadra Capital. Formerly, he was CEO of Barclays Asset Managers, overseeing EUR20 billion in AUM in Europe.
"We built Quadra with a team of partners, each of who had enjoyed success in larger organisations," says Touze. "We were all in our forties at the time and hence, an investor came up with the name, Quadra Capital. I like the idea that the name of the firm originated with a client."
Quadra's other key executives include Chris Egbunike, COO and Paul-Georges Moucan, Partner and Head of Equities. Before joining Quadra, Moucan worked as Global Head of Equities at Amundi, where he first developed the global equity long/short strategy in 2005, which he replicates today.
"There are very few global long/short equity strategies within UCITS that have an established track record. Last year, the fund did well. On a 12-month rolling period, it generated 13.8 per cent for a volatility of 5.7 per cent (as of March 2017); this is one of very few UCITS funds delivering a Sharpe ratio above 2. That is the most important number, beyond performance. The real job of a fund manager is to deliver value, while at the same time remove market stress for the investor," says Touze.
Being a boutique asset manager, it is essential that the chemistry is good and that everyone gets along, says Touze, adding that the aim is to launch four or five funds and bring each of them to critical mass: upwards of EUR1 billion in AUM, respectively.
"We are quite agnostic as to what the next strategy might be, provided it fits what we are trying to achieve as an organisation and resonates with the market."
Culturally, Quadra Capital takes a multi-thematic approach to trading. It is impossible to track 10,000 global equities so one has to take an angle.
"Our angle is to select stocks based on three macro themes that we felt were uncorrelated to one another. These were Demographics, Resource Scarcity and Innovation, within which we explore various sub-themes," says Touze.
To qualify, each stock must have at least 30 per cent of their turnover. This concentrates idea generation in a universe of 500 to 600 stocks, within which Moucan and his team apply bottom-up fundamental analysis, further reducing the universe to 150 stocks.
"We then pick what we believe to be the top 50 stocks, typically 35 long and 15 short. This is something you can do at the boutique level. We have a team of 2 analysts who do this fundamental research and the fund's performance is a testimony of our capacity to generate value in the strategy," asserts Touze.
On winning two awards this year, Touze remarks: "It was fantastic to obtain such a strong peer recognition after one year only and we will do our best to continue to build a successful adventure going forward!"