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Alternative Market Briefing

The Corona Fighters Report 26: Asset managers who delivered in the downturn

Monday, May 11, 2020

Bailey McCann, Opalesque New York:

Amid the current market turmoil, this is our regular report on hedge fund and alternative asset managers who are bucking the trend.


Short bets pay off

London-based Gladstone Capital Management, led by one-time chess International Master and former Lansdowne man George Michelakis, is building on momentum. Gladstone's flagship Lasker Fund is up 14.45%, according to performance information reviewed by Opalesque. The fund has outperformed over the past three years and managed well through the first quarter's abrupt drawdown.

The Lasker Fund is a long/short equities strategy. The all-weather approach builds on the work Michelakis did at Lansdowne Partners. The fund invests in a handful of sectors including financials, TMT, healthcare, and consumer. The fund's short positions reportedly drove performance in the first quarter of this year.

Emerging markets volatility creates opportunity

Bets on emerging markets have paid off for London-based North Asset Management. The North Emerging Markets Fund is up 36.84% year to date. The fund focuses on interest rates, credit, and FX in global emerging markets. The investment team identifies micro/macro-economic and country specific imbalances to develop views and corresponding investment strategies. The strategy invests in Europe, EMEA, Latin America, and Asia.

Emerging markets have had an especially difficult time navigating the crisis brought on by covid-19. Emerging markets stocks and bonds have had difficulty navigating abrupt international shutdowns, leading to solvency concerns in some areas. Macro managers have taken advantage of these dislocations. The HFRI 500 Macro Index advanced +0.8 percent for in April, with contributions from the HFRI Macro: Multi-Strategy Index, which gained +3.4 percent, and the HFRI Macro: Discretionary Thematic Index, which advanced +3.0 percent.

North Asset Management is perhaps best known for its noted global macro strategy. The firm brings a broad global macro focus to its investment approach across strategies.

FX volatility drives outperformance

Volatility has rocked worldwide currency markets in recent weeks, but one manager is taking advantage. The P/E FX Strategy Fund which trades on the DMS UCITS Platform run by DMS Governance is up 23.25% through the end of March. The strategy invests in FX markets and US T-bills. The fund is heavily focused on emerging markets currencies.

Global currency spreads hit unprecedented levels throughout the first quarter. Many currency traders were caught off guard by the wild swings in price and performance for FX managers overall was uneven in Q1.

According to a recent Reuters report, investors are increasingly turning to new algorithms designed to improve trading execution in volatile currency markets. These so-called "adaptive" algorithms can be more responsive when currencies widen to unexpected levels as many did in the first quarter of this year. The reporting suggests that managers have turned to algos not only for their adaptive qualities but also because automation is easier to maintain when traders are working from home.

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Previous issue of The Corona Fighters Report: Report 25.

Opalesque's Corona Fighters reports are open articles. To see all past articles, type Corona Fighters in our search engine: www.opalesque.com/index.php.

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Disclaimer: This is not investment advice. Opalesque has not verified this information and gives no warranty of accuracy or completeness. Past performance is not indicative of future results. See our Terms & Conditions for more information.

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WEBINARS:

VIDEO REPLAY of CORONA FIGHTERS - Episode 1 webinar:

Watch the replay here: www.opalesque.com/webinar/#pw4

Meet five Managers and learn how and why their strategies delivered positive returns and/or protected capital during the Corona led market meltdown in one hour!

"A well-chosen topic of discussion and a great set of speakers to hear and learn from."
"I enjoyed the webinar and found the introduction to the strategies to be diverse and insightful.
"Very resourceful and insightful."

700 people registered for the CORONA FIGHTERS - Episode 1 webinar.


Don't miss EPISODE 2

Time: Tuesday, May 19th at 10 am EST
Register: www.opalesque.com/webinar/

You will be able to tune in to this webinar from any computer, tablet, or smartphone. The webinar will be recorded - in case you are not able to join, all registered participants will be provided a link to replay the webinar.

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