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Erdem Yavuz B. G., Opalesque Geneva for New Managers: A Dutch multi-arbitrage strategy hedge fund saw the day in the midst of the pandemic to seize the opportunities of the time. By employing non-directional strategies that embrace volatility, it returned 25% in 2021.
The Savin Multi-Strategy Arbitrage Fund was launched in February 2021 with nearly €20m after a year-long preparation.
The partners got together just after the Corona crash in March 2020, explains Erdem Yavuz, partner and head of business development, to Opalesque. "We basically realised that there was a new volatility regime coming. We thought at the time that the next ten years were not going to be like the last ten years. Iain Somers, CIO, Bas Emmerig, managing partner, and I then started Savin." The firm now has a team of 10.
Bas Emmerig will be speaking at the Small Managers - Big Alpha Episode 7 webinar on March 8th.
The fund pursues uncorrelated returns through equity and volatility strategies, with a strong focus on the U.S. and SPACs, a new asset class that presents arbitrage opportunities.
"Our skill set is volatility; that is where we have an edge," Yavuz continues. "Privium, who knew Iain from his previous fund, agreed to take on the license and the compliance work and so on so we could focus on performance. We spent a year with lawyers and prospectors raising our initial capital. In February 2021, we transacted our first trade via ABN Amro. Fast forward to now, we returned 25% last year, we have more than €80m in AuM." The fund comes in Euro, USD, CHF share classes. It is flat YTD.
Privium Fund Management (the AIFM of the Fund) is a professional services organisation with offices in Europe and Asia that provides regulated investment management solutions.
The fund strategy fits in well with the current markets, Yavuz says. "We like volatility, so as long as there are question marks hanging above the markets, whether it be Ukraine, China, inflation, supply-chain, or the coronavirus, this is good for Savin.
"We are non-directional and uncorrelated. We are not dependent on share prices going up or down. We just like a little bit of volatility here and there. A major move down would be interesting for us because we have a tail-risk risk strategy to protect our fund from major market events. This is a very good market for a strategy like ours and we expect a very good time in the next couple of years like we did last year."
The fund's edge is in volatility rather than multi-strategy, he adds, and it is well placed in Amsterdam, the mecca of volatility trading.
It is very liquid and offers strategies that generally are only available behind the walls of partnerships, not in fund form. "Furthermore the tail risk shield around the fund is something that is novel - it is expensive but it helps everyone sleep at night, and if something ugly were to happen, it would give us a lot of firepower to exploit any extreme dislocations in the markets. We don't need this to happen, but if it does, we will be fine."
The fund's objective, according to Privium, is to achieve a multi-year average annual return of 8%, net of fees. To realise this, it employs complementary arbitrage strategies for positive returns regardless of market conditions or general market direction. The Fund uses a number of arbitrage investment strategies, including "multi-class" arbitrage, volatility arbitrage, and other kinds of arbitrage strategies and corporate event strategies. Besides the arbitrage strategies, the Fund runs a tail risk strategy to ensure capital preservation in unsettled markets.
Savin was named after a tough evergreen, the Juniperus Sabina, that can survive and thrive in the harshest of conditions.
Upcoming webinar:
Small Managers - BIG ALPHA Episode 7
Episode 7 of this groundbreaking webinar series presents another carefully screened panel of investment managers:
• Bas Emmerig, Savin Funds
• Nikos Kargadouris, Balliol Road
• Laurent Jeanmart, Katch Investment Group
• Kemp Niklin, Rotella Capital Management
When: Tuesday, March 8th at 10:30 am ET
Free registration: www.opalesque.com/webinar/
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