Sauren Golden Awards 2013

George Papamarkakis receives 2 golden medals in the annual awards by Sauren Fonds-Research AG for his performance in the Global Macro category.

Since 2003 the SAUREN Fonds-Research AG has been awarding gold medals to the most promising fund managers across a range of categories, and in 2013 a total of 216 fund managers worldwide received an award.

It should be stressed that the ratings do not assess the key quantitative figures of the funds but instead the quality and personal abilities of the fund managers. Sauren holds more than 350 intensive meetings every year with the fund managers responsible for investment decisions – we have built up a detailed hoard of information arising from more than 5,000 meetings over time.

The SAUREN gold medals are widely recognised  as the seal of quality for promising fund managers. Specialist media such as “FONDS professionell”, “n-tv” and “Das Investment”, as well as Internet portals like “attrax” and Switzerland’s “FundInfo”, regularly publish the latest ratings or include the gold medals in their fund comparisons.

End of an era for emerging market credit?

It’s the end of the unsustainable love affair for emerging market (EM) credit, bears contend, after last week's rout exposed a new normal: tighter monetary conditions in the US, which raises the spectre of slower inflows into emerging capital markets.

 For bears, the jury is out about the time-scale of any unwind from pockets of EM credit and how messy the break-up could be, while the optimists point out, though positioning is high by historic standards, emerging markets can withstand the recent volatility thanks to their strong growth prospects. The high degree of volatility is causing concern as funds confront paper losses, value-at-risk challenges, event risks – amid protests from Brazil to Turkey, for endogenous reasons – and febrile market sentiment as investors awaken to the Fed’s tapering of its bond-buying plan by year-end. Most EM currencies have fallen against the US dollar in recent weeks while US Treasury yields have risen, attracting funds back to the US. The South African rand, Mexican peso, Brazilian real and Indian rupee have been hit in particular.

An additional factor aggravating volatility this time around is the current-account deficits many emerging economies are running. This external financing requirement makes them vulnerable to currency shocks and any slowing of the capital inflows that sustain their current-account deficits.

As yet it is unclear whether currency depreciation is a symptom or a cause, but much of the unwinding of positions in debt markets has been from local currency bonds, exerting downward pressure on currencies. Redemptions from EM bond funds topped $2.53 billion in the week ending June 14, the second-largest outflow on record, according to EPFR Global.

The Fed and emerging markets: The end of the affair

THERE are many reasons why a fund manager might want to sell the rand. South Africa’s economy is barely growing. Unemployment, at 25% of the workforce, is on a par with the grimmest parts of the euro zone. The mining industry is beset by labour unrest just as commodity prices are falling. The country’s large trade deficit is a sign that local producers are struggling in vain against foreign competition. The rand has fallen by 16% against the US dollar this year. Only the Syrian pound and Venezuelan bolívar have fared worse.

Yet these local difficulties are not the only reasons for the rand’s slump. South Africa has the financial markets of a rich country: it is easier to buy and sell bonds and stocks there than in most middle-income countries. So the rand is a convenient currency in which speculators can take a position on emerging markets more generally. As the fast-money crowd sense the beginning of the end of loose monetary policy in America, bonds and currencies in emerging markets are the assets they want to sell. The rand is merely the worst-hit in a long list of vulnerable currencies.

In the past month 19 of the 24 emerging-market currencies tracked by Bloomberg have fallen in value against the dollar. The trigger for this sell-off was a remark in May by the chairman of the Federal Reserve, Ben Bernanke, that the Fed’s purchases of bonds using central-bank money might soon tail off.

MaxQ Fund awarded as Discretionary Global Macro Fund of 2012

North Asset Management’s MaxQ Fund received two awards at the Choice European Hedge Fund Awards 2013. The MaxQ Fund was up +15.51% last year and this continued the strong performance seen in 2011. As a result the Fund won “Discretionary Global Fund of 2012 and Discretionary Global Macro Fund last 3 years” at the Investors Choice European Hedge Funds Awards and has been nominated for 2 further awards this year. 

George Papamarkakis, North CIO commenting on the results stated: “The Fund was able to take advantage of a diverse set of market opportunities and in particular within the European time zone, both within the Eurozone as well as with unique country specific exposures outside of the Eurozone. The Fund returns were achieved through a balance of relative value, cross market strategies as well as directional strategies. The Fund returns were also through capital gains, achieved predominately in fixed income strategies and to a lesser extent in foreign exchange and equities”.

The European Hedge Fund Awards recognise genuine excellence in the field of hedge fund investment management by considering a range of qualitative and quantitative assessment criteria. Uniquely, distinguished hedge fund investors on the HedgePo platform determine the award winners, placing strong emphasis on qualitative assessment criteria, such as investment process and risk management. Emerging managers are considered in separate categories.