Thu, Jun 20, 2019
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications

More potential hedge fund launches in Moscow than in London - RUSSIA Roundtable

 

Sign up here for our free Roundtable Scripts - get this unique intelligence by email as Opalesque publishes them:

15 of the 20 top high frequency trading firms are active in Russia - and you?

The Russian market is really open and highly technologically advanced, even compared to some of the developed markets, and certainly much more open than other emerging markets like India, China or even Brazil. Particularly for algorithmic funds, Russia is an easy environment to come in and test the market, and that is why the competition is quite high at the moment. The growth, volumes, and market share of HFT algorithmic businesses in the Russian market is constantly growing. Out of the top 20 HFT global firms, around 15 are already in Russia and actively trading. The market is now very dense, especially in the FX market, which has been a theme here over the past year.

On the other side, it is no secret that banking in Russia is in poor shape. Credit risk and operational risks are concerns. Most of the capital is fictitious and nobody really knows what the situation is, even for the bigger banks like Sberbank or VTB, but at least, with those type of institutions, you know that at the end of the day they will be bailed out.

Russia's market one of the least efficient globally

From a fundamental equities perspective, some of the large international managers migrated from Russian local stocks into ETFs not only because liquidity decreased in the key names that they liked, but also because bellwether stocks such as Sberbank or Magnit became less favored on fundamental reasons.

This again makes the Russian market one of the least efficient globally, offering plenty of opportunities for fund managers doing their own proprietary research. So, for alpha-driven funds, the situation is not so bad, because of the high volatility, and the liquidity is still sufficient. Fore example, the Flag Quantitative Strategies Fund hasn’t had a single down month since inception and is up around 35%, while the RTS is down by approximately the same amount. Altera Capital has also been doing very well, nearly tripling the AUM of their hedge fund as result of outperformance. Of course, uncertainty around liquidity remains, and it could also be worse next year.

More potential hedge fund launches in Moscow than in London

Still, Stephen Lewis, an executive of fund administrator Maples Fund Services who covers Russia, says that he has seen “more potential new launches on the hedge fund side in Moscow than I have seen in London over the last two years.” This Roundtable discusses in depth these interesting dynamics in Russia, and the prospects of managers to succeed.

The Opalesque 2015 Russia Roundtable, sponsored by Maples Fund Services, took place Sept. 30th in Moscow with:

  1. Viatcheslav (Slava) Pivovarov, Altera Capital
  2. Michael Workman, DG19
  3. Grigoriy Isaev, Flag Quantitative Strategies Fund
  4. Nikolay Dontsov, ITI Funds
  5. Stephen Lewis, Maples Fund Services
The group also discussed:
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. PE/VC: Pictet warns over PE boom being 'bubble waiting to burst', VC pot investments hit record highs in 2019, Private equity managers are increasingly turning to loans instead of investors, PE/VC investments halve in May as large deals dry up: EY report, Many investors in venture capital say a big return isn't enough[more]

    Pictet warns over PE boom being 'bubble waiting to burst' From City Wire: 'Dial down private equity' is the key message of Pictet's chief strategist Luca Paolini, who said investors should review their allocation to alternatives as private equity is the weakest link. Debt is its biggest

  2. New Launches: Hedge fund Cheyne raises $1.12bn for stressed loan fund, Private equity groups prepare to unleash mega funds, TCV, Warburg veterans launch new growth equity firm Farview, Carlyle closes European real estate fund at $604m, Consumer brand-focused H Ventures registering two new funds, Catalys Pacific targets $100m for first VC healthcare fund[more]

    Hedge fund Cheyne raises $1.12bn for stressed loan fund From FT: London-based hedge fund Cheyne Capital has raised €1bn ($1.12bn) for a new fund that will aim to profit from European banks selling down their loan portfolios to meet new accounting and regulatory standards. The

  3. PE/VC: The myth of private equity: Funds struggle to beat the market[more]

    From Guru Focus: Private equity is a glitzy industry, but does it actually beat the market? The data suggests it does not. In an October 2018 episode of "Talks at Google," former fund manager and academic Jeffrey Hooke explained why the sheen has come off of private equity in the last decade. A

  4. News Briefs: Fixing the Sharpe ratio: A machine learning approach, Sotheby's snapped up by French tycoon Drahi for $3.7bn, SALT announces its signature global thought leadership conference in Abu Dhabi, UAE[more]

    Fixing the Sharpe ratio: A machine learning approach From All About Alpha: The Sharpe ratio has long served as a simple but important item in the due diligence tool kit. Formulated by William F. Sharpe in 1966 and first called the "reward to variability" ratio, the number arises from a

  5. New Launches: Private-equity firms are raising bigger and bigger funds. They often don't deliver, Adams Street Partners closes sixth global secondary fund at $1.05bn, Cathay Capital's venture affiliate seeks $560m for latest fund, Kempen raises $134m in second closing for latest fund, Amethis hard-closes Pan-African fund after surpassing $336m target, Access Capital hits $461m first close for European FoF[more]

    Private-equity firms are raising bigger and bigger funds. They often don't deliver. Blackstone Group is in the final stretch of raising what would be the largest private-equity fund ever. Big funds, however, don't necessarily translate into big returns. The private-equity gia