Motivation is key for this hedge fund allocator

According to an experienced hedge fund investor in Geneva, those hedge funds that have the right working spirit and real engagement from employees and partners are the ones to invest in. Start-ups that claim to replicate their previous job's strategies, that struggle with the fees, or that rely on their first-year returns in their sales pitch may not necessarily be the right choice.

"We like hedge funds run by people that are completely committed to their business and engaged to deliver proper returns," said HilmiUnver, head of ultra-high-net-worth and family office at NotzStucki, during the recent Geneva Opalesque Roundtable. "I was in London for two days where I went to visit the ones that are my highest convictions, and those people always give me the same impression. Those managers and their key staff have a large amount of their own money in their funds, and they are extremely committed to provide an attractive working place for all of their employees so that they feel happy to come in the morning and motivated to work on the next big idea that will allow them to extract alpha."

NotzStucki is an independent asset management company formed in the 60s that manages roughly CHF8bn ($7.94bn). The firm was a pioneer in investing in hedge funds and co-manages one of the oldest funds of hedge funds, called Haussmann, with Bank Mirabaud and BancaCeresio.

Unver went on to say that, like all allocators, he has made mistakes over the years and learned from them. One of the popular mistakes was allocating to some managers "that were not prime." They were second or third generation managers that had spun out of an established hedge fund that hard-closed, and they claimed they could duplicate what they had done before. "Very few managed to deliver,......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.