Legends 4 Legends Event Report
Top Hedge Fund Managers Ponder the “Great Unwind” and Raise Record Amount for Children at Legends 4 Legends in Amsterdam
The recent inaugural Legends 4 Legends gathering of the hedge fund industry on 15 September 2016 in Amsterdam raised a record 70,000 euros for a single event for Alternatives 4 Children (A4C), the organising charity (supported by the Nyenrode Finance Circle), which supports projects worldwide which make a difference to the lives of children in need.
Organiser Marc De Kloe: “The issue that was clearly top of mind for all investors was how to position themselves for a future “Great Unwind” of central bank quantitative easing policies. In general, managers are cautious, but there is clearly still a lot of scope to seek out investment gems.” While they were doing this, the participants in Legends 4 Legends also managed to raise a record amount for Alternatives 4 Children at the same time.
The event attracted top speakers from the international hedge fund industry, who gave insights into their investment strategies and the latest market trends. Almost 250 participants from alternative investment managers, pension funds, family offices, private banks and consultants from Europe, the U.S. and Asia, gathered at the EYE Film Museum in a spectacular setting on the north bank of the IJ River in Amsterdam.
Introduction by the Nyenrode Finance Circle
During her introduction, Katherine Kucherenko, vice-chairman of the Nyenrode Finance Circle, threw some light on the academic context of the hedge fund industry: “A long line of research suggests that the hedge fund industry has made positive contributions to financial markets and the broader economy, although there is an ongoing academic debate about the added value of the industry. Some studies show that, by hunting down and profiting from anomalies, hedge fund managers are making the market more efficient. At the same time it is said that while making particular inefficiencies disappear, the hedge funds are amplifying the oscillations of the overall market.”
Kucherenko pointed out that the industry feels pressure to cut costs, reduce complexity, increase transparency and, of course, to improve performance. In addition, she highlighted that investors expect the industry to help them give substance to their ESG policies and provide them with investible solutions which reflect the responsibilities they are willing to take towards society.
Last but not least, she emphasized the importance of the Legends 4 Legends initiative: “Today, many industry leaders acknowledge that the solution lies in creating economic value in a way that also creates value for society by addressing its needs and challenges. Investors and hedge funds must reconnect their success with social progress. It will help us to reshape capitalism and its relationship to society. And perhaps, it is our best chance to legitimize this industry again.”
Panel: Allocators – ‘We’re putting the band back together!’
Financial Investigators’ editor-in-chief Jolanda de Groot moderated the first panel with Gerlof de Vrij (CEO & CIO Blenheim Capital Management), Erik van Houwelingen (Board member and chairman of the investment committee at ABP), Niels Oostenbrug (Director at Amundi), Andries Nieuwland (Sr. Partner at Providence Capital) and Jeroen Tielman (Founding Partner of QStone Capital). De Groot –being an exceptionally skilled moderator - discussed with panel members how they invest, why they do or do not invest in hedge funds, what they are looking for now and what lessons have been learned. Nieuwland: “Hedge funds have to get their act together so they once again live up to the fees they charge. Those who can’t, have no right to exist.”Van Houwelingen: “We have invested 20bln in hedge funds and are happy with the results which have been in line with expectations.”
Keynote: Active Investing – ‘The boy and the dike’, by Harold de Boer, Managing director at Transtrend
De Boer, architect of Transtrend’s Diversified Trend Program, has taken a polder boy’s perspective on markets and liquidity and elaborated on how active investing contributes to dry feet (and how passive investing causes flooding). According to De Boer, responsible investing requires constructive activity: “Investors who are investing passively, are not investing at all.” He added: “Hedge funds should not be for closet passive investors, but should realise that all market risk is ‘active’ by nature and investors should follow the convictions of their own research by having firm price targets in mind when they implement their strategies.” Another point he made was: “It’s not the central banks that should be blamed for the large impact their words have on how the markets move these days. It is the investors that collectively pay too much attention to those words who are to blame for that.”
Panel: Macro – ‘The World Turtle: The Giant Turtle that bears the world on it’s back’
Tim Schuler, investment strategist and head of macro at EnTrustPermal, moderated the second panel of the day with Gerlof de Vrij (CEO & CIO at Blenheim Capital Management), Omar Kodmani (CEO of EnTrustPermal), Ashley Dodd-Noble (Portfolio manager at London Diversified Fund Management) and Sean Shepley (Head of Research at Glen Point Capital). The ‘legends’ discussed what is currently holding up the world, where are the opportunities and threats and which leg will collapse.
Industry overview with the Legends
Theta’s Capital Management partner and portfolio manager, Ruud Smets, interviewed before and after lunch two legends, respectively Stuart Roden (Chairman of Landsdowne Partners) and Rob Citrone (Founder of Discovery Capital). The legends took many different questions from the audience and offered their insights on markets.
Roden: “The one real structural challenge I find to what we are doing, especially here in Europe, is the difficulty of finding real talent. With all the focus on risk management and new regulations there are few people that are being allowed to take real risks early in their careers like Pete and I were. I see no evidence that industry size, the growth of passive investing or instant information for everyone would limit the opportunity for hedge funds.”
Citrone: “We’re cautious on equity markets and turned net short, especially in Europe. Especially the upcoming referendum in Italy worries us as well as the complacent view of a Clinton win in November. A 30 percent correction in Europe wouldn’t surprise us as perceptions change. It will be a buying opportunity.”
In an interview with Marc de Cloe, Philip Green, Partner at TCI, gave his view on finding the ‘Holy Grail’ of investments, along with market outlooks ranging from equities to currencies and credit, and popular perceptions of the global hedge funds industry. Green: “Through Porsche, one can buy Volkswagen at a PE of 3, which is tremendous value no matter the costs of the emission scandal.”
Keynote: Equity opportunities – ‘It ain’t much if it ain’t Dutch’, by Alex Roepers, Founder of Atlantic Investment Management
In his keynote, Nyenrode IDP alumnus, value investor and the founder of Atlantic Investment Management, Alex Roepers, offered his views on current equity market dynamics and argued that the investment opportunities are available as the rotation to ‘value stocks’ has begun and his company is now targeting the rich environment of mid-cap industrial and consumer product and services companies and banks, which have returned to a more solid financial footing. His presentation highlighted opportunities at four different midcaps. Roepers: “ZIRP has led to an extreme valuation bifurcation, but the rotation back to Value has started”.
The participants of the Panel “It ain’t much if it ain’t Dutch’ - Khing Oei (CIO at Eyk Capital Management), Iwan Vink (Fund manager at WinCap Fund), Joost Akkerman (Associate Director at Privium Fund Management) and Willem de Vlugt (Fund manager at Evaluation Capital) – presented their top investment ideas. The participants of the panel ‘Credit – Legend of Freedom’ – Graham Neilson (Chief Investment Strategist at Cairn Capital), Barry Lau (Managing Partner at Adamas Asset Management), Gennaro Pucci (Founder of PVE Capital) and Michiel Meeuwissen (Co-Head Hedge Fund Solutions at Kempen Capital Management) discussed investment opportunities in credit space.
“Winning for the Future” Hedge fund industry awards
The first industry awards were presented to funds that excel in ESG, Operational issues and performance. In five categories, there were two winners - the Pioneers (the Legends of Tomorrow) and the Performers (the Legends of Today). The winners per category are:
- Pioneers: TriumBlackwall Europe L/S Fund
- Performers: Adamas Asian Opportunity Fund
- Operational Infrastructure and Enterprise Risk management
- Pioneers: CIMA Opportunities
- Performers: Gladwyne Master Fund
- Corporate governance
- Pioneers: Eyck European Tactical Opportunities Fund
- Performers: Saemor Europe Alpha Fund
- Pioneers: Privium Sustainable Alternatives Fund
- Performers: Saemor Europe Alpha Fund
- Legend of today and tomorrow
- Pioneers: TriumBlackwall Europe LS Fund
- Performers: Saemor Europe Alpha Fund
De Kloe: “The awards demonstrate that alternative investment funds need to have an awareness of ESG issues which are increasingly critical in the decision making processes of many institutions. Although the application process can take some time, if a manager has a good operational set-up this information should be readily to hand. They emphasise our message that operational preparedness is as important as investment expertise in today’s world.”
The next Legends 4 Legends event will take place in 2017, more information is available on this site: https://events.bizzabo.com/202074/home/