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Alternative Market Briefing

The Corona Fighters Report 31: Asset managers who delivered in the downturn

Monday, May 18, 2020

amb
B. G., Opalesque Geneva:


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

Don't miss tomorrow's webinar: CORONA FIGHTERS - Episode 2 (details below).


No trades in April

The Next AM Fund is up 19.5% YTD after returning +0.37% in April and +14.8% in March 2020. It has returned 69% since inception in May 2012.

The fund is actively managed and invests mainly in contracts whose values are based on the performance of underlying stock indices, interest rates and/or foreign-exchange products. In order to achieve its objectives, the fund invests in derivatives to increase the impact of fluctuations in financial markets on the fund's performance.

"April saw a nice rebound for equity markets globally as many countries planned to reopen economies which had been under strict quarantine since early March," says a management commentary reviewed by Opalesque. "Technology stocks led the rally while oil posted steep declines as a supply glut and weakening demand resulted in an unprecedented futures expiration with negative prices. Interest rates fell globally as governments enacted broad stimulus measures to support their economies; the US Dollar was relatively strong.

"In this positive environment, our NAV was relatively flat, registering a small increase of +0.37%. There were no changes and no trades during the month. The portfolio stayed on the long side as it has been since March 20. Global exposure remained reduced during the entire month. Why is that?

"After the sharp selloff, the technical configuration of our proprietary indicator worsened and dictated a "reduced" exposure (the model has either a "strong" or a "reduced" size for positions). In addition, due to the increased volatility, this small exposure has been reduced again, leading the fund to be nearly out of markets. This is normal and fits with the stepwise return the strategy is expected to deliver."

The investment advisor is Paris-based Tendance Finance, founded in 2011 with the support of New Alpha AM, a subsidiary of La Francaise AM Group.


Mid-sized European companies

The Blackwall Europe Equity Fund is up 14.6% YTD after returning -1.3% in March and 5% in April. It has annualised 18.5% since its December 2018 inception.

The fund follows a fundamental, value-based equity strategy, with embedded ESG metrics. Investments are made in fundamentally mispriced, often mid-sized, and under-researched European companies. It is managed by Thomas Karlovits, CIO/CEO, who founded Swiss-based Blackwall Capital Investment AG in 2014 after working in the equity research sector for more than 23 years.

"We had an equity long/short UCITS fund," said a spokesperson to Opalesque. "Until February of this year, we used to run this long/short fund, but, especially based upon our findings of 2018 and 2019, we came to the conclusion that our long book performed much better for various reasons. We decided to focus exclusively on the longs, which we were already managing in a UCITS long-only product which we launched in December 2018."


Equity long/short in South Africa

The 36ONE Offshore Portfolio is up +0.26% after returning -1.8% in March and +3% in April. It is a feeder fund that feeds into a single-strategy, equity long/short hedge fund with a low net equity bias that invests predominantly in South African listed equities and other financial instruments to enhance returns and manage risk.

"After a terrible Q1 for South African equities, the JSE All Share Index bounced back 14% in April," says a monthly commentary reviewed by Opalesque. "A combination of improving Coronavirus news flow, together with unprecedented fiscal and monetary stimulus, helped buoy risk assets globally with the MSCI All Country World Index rising 10.7% in US dollars. Surprisingly, despite the euphoric bounce for equities, the rand continued to weaken during the month, falling 2.7% against the US dollar. Resources led the charge higher, gaining 23% with Sasol more than doubling while gold and platinum miners were both up over 40%.

"The hedge fund's performance was positive for the month, with gains on the long book offset to an extent by losses on the short book. The long book's gains came from holdings in Impala Platinum, Naspers and AngloGold, while holdings in small caps detracted slightly from the performance. Since the market bounced back strongly in April, most of the losses on the short book were from companies that delivered gains for the short book in the prior month, namely, banks, property, and retailers."

36ONE Asset Management is based in Sandton, South Africa. Co-founder Steven Liptz participated in Opalesque's 2018 South Africa roundtable. He was also interviewed on Opalesque TV.


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Last issue of The Corona Fighters Report: Report 30.

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

***

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.

***


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.


New webinar!

How quants achieve material improvements in ESG investment performance

Time: Thursday, June 18th, at 10:00 am EST
Register: www.opalesque.com/webinar/ESG/

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