Sun, Dec 15, 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. 50 South Capital & Preqin highlight emerging manager outperformance in a new report[more]

    Bailey McCann, Opalesque New York for New Managers: New data from Preqin and 50 South Capital, the investment arm of Northern Trust, shows that emerging managers are outperforming established managers by almost 4% a

  2. An academic wrecking ball aims at hedge funds[more]

    From Bloomberg: Quant investing, and indeed much of the hedge fund industry, is built on the power and freedom that come with the ability to sell short. When you short a security (borrow and then sell it, meaning you make money if the price falls and you then re-buy it), you can profit when markets

  3. PE/VC: Private equity buys $101bn of European businesses, 30 under 30 venture capital 2020: Meet the young investors backing tech's next big thing[more]

    Private equity buys $101bn of European businesses From Bloomberg: European equities' cheap valuations have turned the region into a honeypot for private-equity and arbitrage funds looking to reap double-digit returns. With the buyout firms enjoying a massive amount of dry powder, especial

  4. PE/VC: The truth about private equity fund size, US VC investment in female founders hits all-time high[more]

    The truth about private equity fund size From Institutional Investor: As the end of the year approaches, institutional investors in private markets are wrapping up work on the last few funds we need to invest in to hit our targeted annual commitment levels. You see, private equity

  5. Crypto: Almost 70 crypto hedge funds have closed this year as institutional investors shy away, Central bank talk of launching cryptocurrencies is all bluff, Thailand and Hong Kong in crypto collaboration with cross border token project, Crypto loans see solid growth, platforms attract community interest, A Bitcoiner in the Senate? Is Bakkt CEO in US govt. good or bad for crypto?, Bank of France to test digital currency in 2020[more]

    Almost 70 crypto hedge funds have closed this year as institutional investors shy away From The Block Crypto: Nearly 70 crypto-focused hedge funds that largely cater to institutional investors, such as pension funds and family offices, have closed this year. The number of new fund