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1.
CHINA HEDGE：
请介绍一下贵公司背景和历史？以及你们的投资哲学和投资目标？
Fortune Asset Management Ltd 联合创始人兼CEO Simons
Hopkins：成立于1996年，Fortune是英国历史最悠久的对冲基金咨询公司。Fortune的研究服务名为“全球基金分析”(Global
Fund
Analysis)，后者是基金市场情报的一个领先数据源。过去几年中Fortune进入了当前的几个业务，作为一个多基金经理投资顾问公司提供定制化的资产组合管理服务，主要基于对冲基金，但是同样也关注多类别资产模式。我们为许多私人财富管理机构、家族办公室、保险公司、银行、养老基金以及独立金融顾问提供服务。
如今，Fortune是Close
Brothers集团有限公司的子公司，后者是位于伦敦金融城的一家独立商人银行集团，创建于130多年之前，目前在伦敦股票交易所上市。
和其它对冲基金公司不同，Fortune受到英国金融服务管理局(Financial
Services Authority,
UK)的监管，并在此监管范围提供投资管理服务；同时Fortune还是注册于美国证监会(US
Securities and Exchange
Commission)的投资咨询机构。
公司由一些在交易和投资领域拥有多年经验的专业人士组成，包括前施罗德投资主管Nancy
Curtin，《Market
Wizard》系列及《Schwage》期货作者的对冲基金专业人士Jack
D. Schwager，以及公司联合创始人Rick Tarvin，后者是Fortune的投资风险指引的数量专家，并领导分析师团队。
我们的目标是为客户提供良好的投资回报。
基于200余家合规格的对冲基金以及超过80个管理账户，我们为客户建立风险分散的基金和管理账户资产组合，以满足客户的需求。所有的基金和管理账户都是经由我们团队经过一个基金管理流程进行选择的，采用了准确的投资纪律，包括详细的基金研究和尽职调查。这是Fortune自1996年成立以来的显着标志。
我们希望通过成本有效性控制为客户提供投资策略。这主要基于我们的信息技术平台FortuneNet，为客户提供整合的信息，反映其投资的各个方面，为客户提供实时的、远程的7天每天24小时的监控，同时避免对于对冲基金中的基金(FOF)模式的依赖。
该平台主要设计为在一个单独运营的环境中，增进资产组合构建、风险监控以及经理人监测等。Fortune提供一系列关键的解决方案，包括独立的离岸结构以及公司治理或者和客户一起管理其现有投资管理外包关系。
2. CHINA HEDGE:
资产组合如何构建？你们遵循怎样的投资流程？谁涉及到每一个相关步骤以及你们通过何种研究进行投资决策？你能举一个例子么？
Simon:
Fortune投资流程是我们的高级投资团队创立的，并在过去十多年中不断的进行了改进。它包括八个步骤。它不仅仅导致了批准经理人统计库(Approved
Manager
Universe)的创立，还使得我们成功构建了行业领先的资产组合。
1． 为潜在投资确定经理人
2． 初次面谈及撰写经理人研究
3． 详细的尽职调查
4． 投资委员会批准
5． Fortune批准经理人统计库 （大约200位经理人）
6． 资产组合构建 （每个产品大约20-30个经理人）
7． 风险管理
8 . 投资后资产组合监控：数量和质量
我们的投资流程帮助我们确定这些资产组合所包含的经理人是他们策略领域里面最为优秀的分析师，并只在详细的尽职调查之后被选择。我们的流程的差异性在于自主的风险监控和业绩分析，帮助我们在最佳方法之下满足客户的目标。
Fortune所有产品的一个关键的特性是，我们的客户可以通过我们的安全网页门户FortuneNet得到他们资产组合完全透明的信息，并且介入详尽的研究和尽职调查工作。
3. CHINA
HEDGE:
你们资产组合的特征是什么，例如投资范围、地理配置、预期风险及收益、杠杆以及资产组合限制等？
Simon:
我们的目标是按照客户对于风险、回报、流动性、相关性以及透明度的要求建立资产组合。
我们和客户一起构建资产组合。每一个资产组合都是为客户量体裁衣。我们提供100%的资产组合以及尽职调查透明度。我们为寻求广泛的资产组合透明度和流动性的客户提供管理账户。
4. CHINA
HEDGE:
你们选定和筛出一个对冲基金经理的要点是什么？什么是你们选择对冲基金经理的决定因素？
Simon:
Fortune通过下面四个步骤选择那些最终加入我们批准经理人统计库的基金经理。
1.
我们的网络：基于他们广泛的投经验，我们每一个高级投资管理团队成员都在行业里面人脉颇深。同时，Fortune集团所有的28位投资专业人士也拥有许多人际网络。这些网络让我们能够得到接触一些优秀基金经理的机会。
2.
我们的种子基金声誉：我们作为对冲基金初始资金注资者的良好声誉使得许多经理人愿意主动联系我们。
3.
我们的可比公司研究：我们经常性对不同策略进行研究。为了完成这些，我们建立了数据管理和分析平台，使得我们能够迅速和有效的预测一个经理人的风险和回报特征。这些研究希望能够确定经理人在某个环境之下能够取得相对其它对手和业绩标准前1/4的回报/收益数字，时间安排是1，3，5年或者10年期。
要点包括：
• 超额回报水平的排名
• 风险/回报的分布图
• 风险回报的分段分析
• 和指数以及资产组合其它经理人的相关度
• 管理资产的水平和增长
• 相对总资产的业绩表现连续性
• 信息率
• 夏普值
• 指数上升阶段业绩表现
• 指数下跌阶段业绩表现
• 阿尔法和贝塔回报率水平
排名下滑意味着该经理人有可能被替换。
4.
我们在过去几十年中建立了自己的操作系统：从1996年开始，我们已经编制了完整的研究内容
– 包括尽职调查 –
覆盖超过700家对冲基金和管理账户。一些管理人至今还在其原来的公司，一些现在创办了自己的基金。
当考虑到"业绩评价原则"的时候，我们仅仅考虑和风险相关的回报。业绩评价必须基于相应的比较基准。有两个基本的原则：
1）风格 –
没有必要将一个经理人的业绩和市场上所有的经理人以及指数进行比较。每一个经理人的业绩将和相似的经理人以及符合其策略的指数进行比较，这一点我们在比较组别分析中进行。
2）时间 – 所有的公司必须在同样的一个有效时间段内进行比较。
5. CHINA HEDGE: 对于对冲基金中的基金(FOF)经理而言，自上而下的资产配置和自下而上的经理人选择是投资的关键方法。你们如何评价这两种方法的重要性？你们在资产组合构建中如何整合上述两种方法。
Simon:
我们的投资使用了自下而上的系统及自上而下的覆盖，自上而下的覆盖中我们：
• 确定市场范围
• 确定需要优先考虑或者避免的策略
• 确定关键市场风险
• 审视总体收益
自下以上评价我们：
• 采取尽职调查
• 确定经理人和策略的风险
• 包含200为合格经理人的Fortune平台
6. CHINA HEDGE:
有批评指出对冲基金和对冲基金中的基金(FOF)之间的信息是不对称的。例如，麦道夫表示自己是一个CTA经理人，但是因为保密性他们从来不披露其交易模型。不仅仅麦道夫，其它一些领先的CTA和数量经理人都选择不向投资者披露其策略。你如何解决这种不对称信息问题？
Simon:
麦道夫不是一个对冲基金经理人。他是一个中介。他从来不为那些种子基金交易一分钱。所有假设的收益都是虚拟的。这些基金都被设定为基于虚假的交易记录。
我们通过要求透明度来解决这种问题。我们同样坚持机构在投资之间进行整体的检查。也许最为中肯的就是，在2007年我们开始转向管理账户，这能够给我们的客户提供每日定价以及更大的增强透明度和投资者调查的水平。
7. CHINA HEDGE:
大多数对冲基金中的基金(FOF)分析师仅仅检查不同对冲基金策略，因此被指责无法进行单一策略的详细调查，也不能像投资者一样思考。你如何看待普通和专业的分析师？你如何构建这种团队？
Simon:
我们所有的员工都是经过严格的考察的，他们具备良好的交易以及专业的能力，同时在该领域属于领先的专家及持有专业的职业操守。同时，下面的一些选项被用来评价我们投资团队成员的业绩表现。
• Fortune产品的整体表现
• 个人负责的产品的表现
• 对于团队投资流程的贡献
• 对于团队研究流程的贡献
• 成功确定新的基金经理
• 稳健的风险控制
Fortune的团队由在全球顶尖金融机构拥有长达几十年的交易和投资经验的人士领导。他们大多数在瑞银、潘恩韦伯、汇丰、野村、保诚、施罗德、美林、瑞士信贷以及摩根士丹利工作过。
8. CHINA HEDGE:
你如何看待对冲基金中的基金(FOF)的商业模式？在麦道夫案件之后，人们开始质疑对冲基金中的基金(FOF)在采取严格的尽职调查方面的能力，而且他们更加偏好于直接投资对冲基金或者聘请第三方尽职调查提供商。您们有何想法？
Simon:
我的想法已经发表了。我相信对冲基金中的基金(FOF)是一个好策略，但是它昂贵、流动性差、不透明而且不可避免的复杂。我强烈认为管理账户在接下来的几十年中能够成为对冲基金投资强劲的增长领域，因为他们能够为上述问题提出解决方案，并且更安全，因为托管机构保护了投资者的资产。
9. CHINA HEDGE:
你在中国对冲基金中有所配置吗？你如何看待大中华区经理人？什么是他们的优势和劣势？你认为有哪些地方可以改进？未来你会增加还是减少对于中国经理人的配置？为什么？当你寻找大中华区经理人时，你观察的是什么？潜在的高回报？你将考虑更多保守的策略例如套利和固定收益么？
Simon:
当然我们有所配置，但是我们担心是他们对冲的能力。这一点来讲对于那些在亚洲的欧洲经理人以及本地经理人都是一样。考虑到净值的下滑，我们肯定是要增加配置，但是我们会更多考虑那些不会关闭的对冲基金和在2008年没有限制投资者赎回的经理人。
10. CHINA HEDGE:
在未来几年你认为何种策略和哪个区域能够跑赢其它对手？为什么？
CHINA HEDGE:
多数对冲基金中的基金(FOF)认为这几年进行中长期的不良资产投资非常不错。目前这种策略是今年至今表现最差的，HFRX不良资产指数下滑了8.65%。你同意这种看法么？
Simon:
我们认为目前是最好的投资时机，但是你要把握好时机。一些杠杆贷款和金融股已经反弹了超过50个百分点。
CHINA HEDGE:
可转债套利策略在2008年经历了糟糕的一年，自雷曼兄弟倒闭之后，他们的流动性就干涸了。而今年这种策略以及国内反弹了20.44%（HFRX
CB
Index），是今年表现最好的策略。你如何看待可转债套利策略良好变现的持续性？你会关注今年的信贷息差么，即使最近几个月信贷息差有所收紧。
Simon:
我们相信他们会收紧，而高息策略将是最好的资产配置之一。现在全球都在关注通胀预期。
CHINA HEDGE:
你如何看待全球宏观策略？你认为它在趋势市场上更为适用吗？你如何看待全球宏观经理人的波动性？
Simon:
我们强烈认为把握好平衡的全球宏观策略能够提供非常良好的回报。
CHINA HEDGE:
新兴市场今年至今表现优异，特别是中国和印度市场。你认为这些经理人能够持续获得现金流入或者你认为目前这些市场已经开始非理性和高估值了吗？
Simon:
这些市场明显是趋势投资。他们将产生许多的波动性问题。
11. CHINA HEDGE:
你如何看待全球金融危机和经济衰退？你相信经济复苏么？经济学家对于美国通胀预期目前分为两派：部分担忧未来的CPI高涨，部分觉得美联储有足够时间消化市场风险。你觉得目前是通缩还是通胀？你如何管理资产组合以及避免从脆弱的经济中遭遇损失？
Simon:
我们短期认为是通缩，长期认为是通胀。
在过去的几个月中我们看到市场发出了一些从经济衰退中反弹的一些信号，主要是基于通胀预期超过了通缩的预测。过去几个月中一系列积极的因素反映了这个情况，例如波罗的海干货指数、美国住房建设、消费者信心指数、制造业ISM等等。经济下跌的速度已经开始放缓，全球经济目前不再面临大型的系统性风险，这一点已经很清楚。
不清楚的事情是，是否当前的一些稳定的现象意味着经济复苏的持续性。美国企业领导者们都在卖出股票；日本出口下滑了40.9%；目前失业率也停留在9.5%的高点，这些都说明消费者信息还是非常脆弱。
还有一个无法估算的是当前一些国家经济刺激政策的成本。经济拯救计划的出台必然带来货币或者财政政策的扩张。税率也可能上涨，因为存款利息上升，这些都可能是的经济成长面临巨大压力。如果全球经济体不能从一些中央银行的经济政策中复苏过来，收回的流动性将是的全球经济又称新返回到一个通缩的状态。
Fortune的基金经理基于他们自身的熊市和牛市观点，表示相信这个世界将逐渐因为通缩和通胀的压力变得分裂成两个不同的阵营，今年部分市场将出现分化。
从市场噪音中脱离出来，Fortune的对冲基金经理和行业策略师们选出了三个能够实现超额回报的领域：反美元弱势和商品策略；逐渐增长的管制、上升的公共行业和财政支出；增长的主权风险和高税收以及生产率降低、高失业率、增长的储蓄和通货膨胀；以及那些被称为“发达新兴市场经济体”。这些领域可能投资奏效，但是目前前景也是不确定性的，而且不同的资产类别也会出现分化。因此我们觉得那些市场细分的专业对冲基金投资者能够取得对抗通缩或者通胀的成功，并取得最好的回报。我们将持续将我们的资产组合配置在下属一些策略领域：流动性交易、股票对冲和不良资产。
12. CHINA HEDGE:
麦道夫一案显示了运营尽职调查的问题。你们进行运营尽职调查的程序是什么，如何保证不被卷入类似的庞氏偏局？
Simon:
我们向美国证监会警告关于麦道夫案件已经多年。Fortune的老员工，总裁Frank
Casey和Harry Marcopoulos都曾经指出过这种问题。
我们认为机构水平的对冲基金满足如下几个条件：
• 独立的财务总监
• 分离的交易功能
• 充分的后台业务
• 严谨的纪律
• 高质量的行政
• 高质量的机构经纪
• 高质量的机构核数
• 管理公司的监管
• 独立董事
任何被宣布为"潜在投资"的经理人都需要经过Fortune严格的尽职调查程序。在这一步，该基金的每一个方面都需要被仔细检查。该审查包括资产组合、交易以及运营程序、法律结构、组织、金融框架和文件。这一程序通常经过多次实地考察和验证。
作为尽职调查的一部分，Fortune通常需要实地进行一个运营尽职调查问卷的流程，关注商业结构和基础问题、法律、交易以及其它一些运营风险。它能够为经理人提供关于上述方面一些所有需要提交和审查的文件的一个全方位的考察。
Fortune的评价流程与下述要点关系密切
• 公司结构的复杂性（包括所有权、利润能力以及办事处地址）
• 基金背景、投资条款和费用
• 团队、潜在的利益冲突以及人力资源事项
• 非投资团队的能力（例如运营和CFO背景）
• 柜台质量（包括经纪、核数、行政和托管机构）
• 投资者基础的质量
• 基金总资金历史趋势
• 董事会结构和管制
• 诉讼和监管
• 法律事务
• 资产组合透明度、风险管理和确认
• 交易和交易配置
• 交易和调整程序
• 现金管理
• 系统、后台以及灾难恢复
在实地考察中，Fortune通常要求整编和审视一系列文件。下述文件通常包括在内（但不限于）：
• 客户报告样本
• 基金大纲
• 合伙人简历
• 认购合同复印件
• 公司注册和合伙协议文件
• 投资管理和咨询合同
• 法律组织图
• 财务报表
• 设计借款、资金以及信贷的所有文书复印件
• 行政和托管协议
• 主要业绩记录证明
• 检测及控制资产组合风险程序样本
• 运营程序指南
• 法律业务指南
• 推荐名单
13. CHINA HEDGE:
你有在中国拓展业务的计划吗？如果有计划如何成立其业务分支？你如何在中国成长的过程中占据有利位置？
Simon:
我们正在寻求在香港的并购业务，以增加亚洲配置。我们认为中国是未来全球资产组合的一个大买家。
14. CHINA HEDGE:
中国主权财富基金中投公司计划今年底之前在对冲基金领域投资60亿美元。你们是否加入这场竞争？或者说你们是否有能力和其它对冲基金中的基金(FOF)经理人区别出来？
Simon:
Fortune在帮助资金管理人进行另类配置时提供投资顾问服务，特别关注对冲基金但是也包括其它一些大的资产类别。我们拥有业务上非常富有经验的团队，今天我们也为一些欧洲的大型家族和机构进行咨询，利用我们完全自动的信息技术平台，帮助他们更好的建立分散风险的资产组合。
Fortune在管理账户领域已经累计了多年的经验。我们的数据库中包括100余位经理人，可以用来建立绝对回报的资产组合，并提供每日定价、双月赎回以及经过严格监控的托管机构的安全度。我们的管理账户基金自1999年以来就拥有长期和良好的历史记录（作为对冲基金中的基金(FOF)以及自2007年以来作为管理账户基金）
。
23.7.2009
郑伟伟执笔
被访问嘉宾简历：
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Fortune Asset Management Ltd. 联合创始人兼CEO Simons
Hopkins
Simons
Hopkins在欧洲投资领域拥有超过20年经验。他于1986年在SG华宝开始其投资银行生涯，并于1988年加入瑞银集团担任欧洲股票专家。从1990年到1996年，他作为法国股票市场专家在巴黎度过了六年，一开始为汇丰，后来为野村工作。他在后者担任法国股票业务总监，建立了高评价的股票销售和研究业务。
1996年，Simons
Hopkins创办了对冲基金管理和咨询公司Fortune以及其研究分支Global
Fund
Analysis。2006年，欧洲领先的商业银行Close
Brothers集团有限公司收购了该公司控股权。 |
今天，Fortune管理着一系列基金、定制的外部资金委托，总计超过30亿美元资产。其机构客户包括保险公司、私人银行、家族办公室和捐赠基金。该公司还通过其新兴管理人项目为20家单一策略基金进行了注资。他为Fortune团队带来了对于全球投资者的深刻理解和基金投资的能力。
Simons
Hopkins经常在财经媒体上对于基金行业的热门话题进行评论，并在多个重要会议上发言，包括经合组织以及伦敦经济学院的对冲基金会议。他1986年以荣誉学位毕业于布里斯通大学法学院。
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如果您想了解更多的对冲基金经理采访报告，请参考我们的对冲基金快报。如果您对对冲基金采访报告有任何疑问，请联系郑伟伟yolanda.zheng@chinahedge.com.cn
1. CHINA HEDGE: What is the background and history of your company? What are your company’s investment philosophy and investment objectives?
Simon Hopkins,
CEO and co-founder of Fortune
Asset Management Limited:
Founded in 1996, Fortune is one of
the longest standing hedge fund
advisory firms in the UK.
Fortune’s heritage is in research
service called Global Fund
Analysis, which remains a leading
source of fund market
intelligence. Over the years
Fortune has evolved into its
current business as a multi
manager investment advisory firm
offering customized portfolio
management services principally
focused on hedge funds but
spanning a multi-asset class mode.
We serve a range of private wealth
management groups, family offices,
insurance companies, banks,
pension funds and independent
financial advisers.
Today, Fortune is a subsidiary of
Close Brothers Group plc; an
independent merchant banking group
founded in the City of London over
130 years ago and is listed on the
London Stock Exchange.
Unlike many hedge fund groups,
Fortune is authorised and
regulated by the Financial
Services Authority in the United
Kingdom to provide investment
management services and registered
with the U.S. Securities and
Exchange Commission as an
investment adviser.
The firm is staffed with seasoned
investment professionals with a
vast experience of trading and
investing including Nancy Curtin,
former head of investments,
Schroders and Jack D. Schwager, an
industry veteran, whose prolific
knowledge of hedge fund strategies
has been illustrated in his Market
Wizards books as well as Schwager
on Futures. Finally there is Rick
Tarvin, co-founder of the firm,
who is the quant behind Fortune’s
investment risk guidelines and who
leads our team of analysts.
Our aim is to deliver superior
investment returns in partnership
with our clients.
Drawing from over 200 approved
hedge funds and a universe of over
80 managed accounts, we work with
clients to build diversified,
decorrelated portfolios of Funds
and Managed Accounts to meet our
clients' objectives. All Funds and
Managed Accounts are selected by
our investment team as a integral
function of the fund management
process, applying the same
exacting investment disciplines of
detailed manager evaluation and
due diligence that has been the
hallmark of Fortune since 1996.
We seek to implement an investment
strategy cost effectively through
our information technology
platform FortuneNet which serves
to collate and aggregate
information with respect to all
the underlying legacy and
prospective investments, providing
our clients with real-time, remote
access to their investments 24/7,
whilst obviating the need for a
fund of funds structure.
The platform is designed to
facilitate portfolio construction,
risk oversight and manager
monitoring within a single
operating environment. Fortune
provides a total turn key solution
including independent offshore
structures and corporate
governance or works in partnership
with its clients and their
existing mandates.
2. CHINA HEDGE: How is your
portfolio constructed? What kind
of investment process do you
follow? Who is involved at each
step and which kind of research do
you carry out to make investment
decisions? Could you please
illustrate this with an example?
Simon:
The Fortune Investment Process
was created by our senior
investment team and has been
refined over the last decade. It
consists of eight steps which not
only yield an Approved Manager
Universe but ultimately result in
carefully constructed, industry
leading portfolios.
1. Identifying Managers for
potential investment
2. Initial interview and written
manager evaluation
3. Detailed Due Diligence
4. Approval by Investment Committee
5. Fortune Approved manager
universe (approximately 200
managers)
6. Portfolio Construction
(approximately 20-30 managers in
each product)
7. Risk Management
8. Post-Investment Portfolio
Monitoring: Quantitative and
Qualitative
The steps of our Investment
Process ensure that these
portfolios contain managers who
are the best analysts in their
strategies, and have been chosen
only after extensive due
diligence. Our process is further
differentiated by proprietary risk
monitoring and performance
analytics that helps ensure we are
meeting our clients’ objectives in
an optimal fashion.
A key differentiating feature
offered by all of Fortune’s
products is that clients can
obtain full transparency
encompassing not only the
composition of their portfolios,
but also the extensive research
and due diligence work conducted
on each fund in the portfolio via
our secure web portal called
FortuneNet.
3. CHINA
HEDGE: What are the
characteristics of your portfolio,
such as invest universe,
geographic exposure, target risk
and return, leverage, and
portfolio limit etc.?
Simon:
Our goal is to build a
portfolio to satisfy clients’
objectives as risk, return,
liquidity, correlation and
transparency.
We build portfolios in
collaboration with our clients.
Every portfolio is a client
tailored experience. We provide
100% overall portfolio and due
diligence transparency. We offer
managed accounts for those clients
seeking greater manager portfolio
transparency and improved
liquidity.
4. CHINA
HEDGE: What are your criteria to
pick and remove a hedge fund
manger in your portfolio? What are
the dominant factors that you are
looking for when you are examining
hedge fund managers?
Simon:
Fortune typically sources
managers who will ultimately join
our Approved Manager Universe by
one of the following four routes:
1. Our Networks: Given their broad
investment experience, each of the
senior members of the Fortune Team
has developed an extensive network
of industry contacts. In addition,
the 28 investment professionals
across the entire Fortune group
have excellent industry contacts.
These networks are often a source
of intelligence on superior
managers and can be tapped to
identify managers worthy of closer
scrutiny.
2. Our Seeding Reputation: Our
prominence as a hedge fund seeder
results in many managers
contacting us proactively.
3. Our Peer Group Studies: We
regularly conduct peer group
analysis of different strategies.
To do this, we have built a
proprietary data management and
analysis platform which allows us
to quickly and efficiently
evaluate a manager on a number of
risk and return criteria. The
analysis seeks to confirm the
manager under consideration has
demonstrated an ability to
generate consistent top quartile
return/risk numbers against its
relevant peer group and benchmark,
as measured over 1, 3 ,5 and if
possible 10 year periods.
Criteria include:
• Ranking on level of
out-performance
• Risk/return scatter diagram
• Quartile analysis of risk and
return
• Correlation to indices and other
managers in the portfolio
• Level of and growth in assets
under management
• Consistency of performance
versus growth in AUM
• Information ratio
• Sharpe ratio
• Performance in up month of the
index-upside capture
• Performance in down months of
the index-downside capture
• Levels of alpha and beta in
returns
A ranking that falls means that a
manager is likely to be replaced.
4. Our Database Constructed Over
the Last Decade: Since 1996, we
have been compiling detailed
research coverage - including due
diligence - on more than 700 hedge
funds and managed accounts. Some
of these managers have remained
with their original firms; some
have split off to form new funds.
When comes to the Performance
Evaluation Principles, we only
consider a manager’s return
relative to his risk. Performance
evaluation must be measured
against equivalent comparisons.
There are two dimensions of
requisite similarity:
1) Style—It makes no sense to
compare a manager’s performance to
all other managers or general
market indexes. Rather each
manager’s performance must be
compared with other similar
managers or sub-indexes that match
the strategy style, which we do in
our peer group analysis.
2) Time—All comparisons must be
made over identical time periods
to be meaningful.
5. CHINA HEDGE: Top-down asset
allocation and bottom-up manager
selection are the key methods for
FoHF investments. How do you weigh
the importance of these two
methods respectively? And
practically how do you integrate
both top-down asset allocation and
bottom-up manager selection into
your portfolio construction?
Simon: Our investment does
employ a bottom-up system with
top-down overly. In terms of the
top- down overlay, we:
• Identify key market themes
• Identify strategies to
prioritize and to avoid
• Identify key market risk
• Review overall performance
And from a bottom-up perspective,
we:
• Undertake due diligence
• Identify risk of manager and
strategy
• Fortune platform has circa 200
approved managers
6. CHINA HEDGE: There are
criticisms that the information
between hedge fund and fund of
hedge fund is asymmetric. For
example, Madoff claimed himself as
CTA manager and they never
disclosed their trading models to
investors since they are
confidential. Not just Madoff,
other outstanding CTA or Quant
managers seldom disclose their
strategies to investors as well.
How do you solve this asymmetric
information problem?
Simon: Madoff was not a
hedge fund. He was a broker. He
never trades a single cent for the
so-called feeder funds. All the
supposed gains were totally
illusory. Those funds that
invested must now restate their
own fictitious track records.
We solve the problem you allude to
by demanding transparency. We also
insist on a whole host of
institutional checks as outlined
above before investing. Perhaps
most pertinent is our move to
managed accounts in 2007 which
provide our clients with daily
pricing and far enhanced levels of
transparency and investor
intelligence.
7. CHINA HEDGE: The majority of
the FoHFs analysts are generalist
analysts who look at different
hedge fund strategies and that is
blamed because they could not go
to the depth of individual
strategies and could not think as
investors. Do you prefer
generalist or special analysts?
How do you structure the team in
your company?
Simon: All of our staff have
been carefully screened, to ensure
not only impeccable educational
and professional pedigrees but
also that they are of the highest
ethical calibre. In addition, the
following criteria are used to
assess the performance of members
of the investment team in their
annual assessment and regular
performance monitoring:
• Overall performance of Fortune
products
• Performance of individual
products for which individuals
have lead responsibility
• Contribution to team investment
process
• Contribution to team research
process
• Successful identification of new
manager
• Prudent risk management
Fortune's team is headed up by
true investment management
practitioners with decades of
experience of trading and
investing at some of the world's
leading financial groups including
UBS, Paine Webber, HSBC, Nomura,
Prudential, Schroders, Merrill
Lynch, Credit Suisse and Morgan
Stanley.
8. CHINA HEDGE: What do you
think about the business model of
FoHF? After the Madoff scandal,
people become doubting FoHFs’
ability in conducting stringent
due diligence and would rather
invest in hedge fund directly or
hire third party due diligence
providers. What are your thoughts
on this?
Simon:
My thoughts have been well
publicized. I believe the FoHF
model is one of the expediencies
but it is often expensive,
illiquid, untransparent and
unnecessarily complex. I strongly
believe that managed accounts will
prove the strongest growth area
for hedge fund investing over the
next decade as they provide all
the answers to these problems as
well as being far safer, as
custody of the assets remain with
the investor.
9. CHINA HEDGE: Have you ever
allocated your portfolio into
Chinese hedge fund managers? How’s
your view on Greater China
managers? What’s their strength
and weakness in general? In which
aspects do you think they can
further improve? Will you have
more or less exposure to greater
china managers in the year ahead?
Why? When you look at greater
china managers, what are you
looking for? Potentially higher
returns? Will you consider more
conservative strategies such as
arbitrage or fixed income strategy
from greater china managers?
Simon:
Yes we have but we have been
sorely disappointed with their
ability to hedge. This goes for
both the ex-pat European managers
in Asia and the homegrown
practitioners. Given the collapse
in values we will undoubtedly have
new exposure but only to larger
established players who are not at
risk of closing down and who have
not indiscriminately gated their
investors in 08.
10. CHINA HEDGE: What kind of
strategies and which geographical
markets do you expect that could
outperform in the year ahead? Why?
CHINA HEDGE: Lots of FoHFs think it’s a
good year to position in
distressed strategy from middle to
long term perspective. So far this
strategy is one of the worst
performers with YTD at -8.65% (HFRX
Distressed Index). Do you agree or
disagree with that?
Simon: We believe that this will provide
a once in a lifetime investment
opportunity but timing is key.
Some levered loans and financial
stocks have already bounced by 50
percent plus.
CHINA HEDGE: Convertible arbitrage strategies
had a terrible year in 2008 since
Sep when the liquidity dried up
after the bankruptcy of Lehman.
And it totally reversed from this
year with YTD at 20.44% (HFRX CB
Index), which is the best
performer so far. Do you think the
good performance of convertible
arbitrage strategy is consistent?
Do you concern about the credit
spreads in the year ahead even
though credit spreads have
tightened a lot in the past few
months?
Simon: We believe they will tighten more
and that HY will prove to have
been one of the better asset
classes. The world is now
concerned with inflation on the
horizon.
CHINA HEDGE: How’s your view on Global Macro
strategy? If you agree they are
more contrarian strategy and
better to be employed in trendy
markets? What’s your view on the
volatility of global macro
managers?
Simon: We are strong believer that macro
themes will provide good
opportunities for those that get
them right on balance.
CHINA HEDGE: Emerging market has outperformed
since this year, especially
emerging China and India markets.
Do you think those managers will
have consistent positive cash
inflow this year or do you think
these markets are irrational and
over-valued at current valuation
level?
Simon: These markets have a tendency to
overshoot. They will be very
volatile with many problems
creating set backs to the long
term growth trajectory.
11. CHINA HEDGE: How’s your
view on the global financial
crisis and economy recession? Do
you believe the recovery story?
Economists appear to be dividing
themselves into two camps on US
inflation prospects: those who are
worried about a breakout in the
CPI ahead, and those who argue
that the Fed has plenty of time to
cut such risks off at the post. At
this stage, are you more
inflationary or deflationary? How
do you position yourself to better
manage your portfolio and mitigate
the suffering from the fragile
economy?
We are short term deflationary but
long term inflationary.
In the last few months we see
market shows early signs of a
reversal in the pace of economic
decline, based on evidence that
reflationary forces might be
overtaking deflationary ones,
which were manifested via a series
of positive indicators announced
over the month such as Baltic Dry
index, US Housing Construction,
Consumer sentiment, manufacturing
ISM etc. That the rate of economic
decline has slowed, and that the
global economy is no longer on the
verge of a systemic meltdown,
seems clear.
What is less clear, however, is
whether recent signs of
stabilization equate to a
sustainable economic recovery. US
CEOs are selling shares into
rally; Japanese exports slumped
40.9% yoy and the continuing rise
in unemployment, which hit 9.5%,
continues to point to a fragile
consumer at best.
And one of the imponderables that
we concern is the sheer cost of
the various governmental stimulus
programs themselves. Staggering
rescue packages come with equally
staggering price tags that must be
either financed or monetized. Tax
rates are likely to head higher,
just as saving rates increase, a
combination which is likely to
generate further downward pressure
on growth. Should global economies
gain sufficient traction such that
Central Banks are forced to drain
liquidity prematurely, this early
removal of the proverbial ‘punch
bowl’ may derail signs of nascent
recovery and throw global
economies back into a deflationary
decline.
Fortune managers, irrespective of
their near term bullish or bearish
views, believe that the world is
likely to swing between the forces
of deflation and reflation in the
same ‘schizophrenic’ pattern that
has characterized markets this
year, which also reflects our
view.
Sifting through market noise to
synthesize the view of Fortune’s
hedge fund managers and industry
strategists, we find 3 themes
reigning supreme: the anticipated
dollar weakness and commodity
play; the increasing regulation,
rising public sector and fiscal
spending, increased sovereign risk
and high taxation coupled with
decreasing productivity, high
unemployment, increasing savings
and rising inflation; and the
so-called ‘Developed Emerging
Economies’. These themes may play
out, however, the investment
landscape is uncertain and likely
to be marked by significant swings
in asset classes over the
remainder of this year. Hence we
believe that nimble hedge fund
managers who can exploit a range
of possible outcomes along the
deflation-reflationary spectrum
are most likely to deliver the
strongest returns. Consequently we
seek to position our portfolios by
combining the following
strategies: Liquid Trading, Equity
Hedge and Distressed.
12. CHINA HEDGE: The
breakthrough of Madoff Scandal
brings in the problem of
operational due diligence. What’s
your process to conduct your
operational due diligence which
prevents you from investing in
such alleged Ponzi schemes?
Simon:
We were consistently warning
the SEC about Madoff for years.
Fortune's veteran President Mr
Frank Casey painstakingly pieced
together the case with Harry
Marcopoulos.
We define an institutional quality
hedge fund as a fund that exhibits
most and preferably all of the
following characteristics:
• Independent CFO
• Separate Trading Function
• Sufficiently Deep Back-Office
• Pedigree of Principals
• High Quality Administrator
• High Quality Prime Broker
• High Quality Prime Auditor
• Regulation of Management Company
• Independent Directors
Any manager classified as a
“Prospective Investment” must now
undergo Fortune’s rigorous due
diligence process. At this stage,
every aspect of the fund’s
operations is examined in detail.
The review encompasses the
portfolio, trade and operational
procedures, and legal,
organizational, and financial
framework and documents. This
process often entails multiple
on-site visits and external checks
and validation.
As part of this due diligence,
Fortune will work onsite to fill
in an extensive Operational Due
Diligence Questionnaire which
focuses on business organization
and infrastructure issues,
compliance, trade and
reconciliation and disaster
recovery and all elements of
operational risk. It is intended
to provide a full record of the
manager in each of these areas and
also consists of a list of
documents that would need to be
supplied and reviewed.
Fortune’s review process closely
examines the following:
• The Complexity of the Firm’s
Structure (including ownership,
profitability, and office
locations)
• The Fund Background, Investment
Terms & Fees
• The Team, Potential Conflicts of
Interest & HR Issues
• The Strength of the
Non-Investment Team (i.e.
Operations and CFO background)
• The Quality of Counterparties
(e.g. Brokers, Auditors,
Administrator, Custodian)
• The Quality of the Investor Base
• The Pattern of AUM Historically
• The Board Composition and
Governance
• Litigation and Regulation
• Compliance Procedures
• Portfolio Transparency, Risk
Management & Verification
• Trading and Trade Allocation
• Trade & Reconciliation Process
• Cash Control Procedures
• Systems, Back Office & Disaster
Recovery
During the onsite visits, Fortune
also requests to compile and
review a series of documents.
These documents typically include
(but are not limited to):
• Sample Client Report
• Fund Prospectus
• Resumes of Fund Partners
• Copy of Subscription Agreements
• Articles of Incorporation or
Partnership Agreement
• Investment Management and
Advisory Contracts
• Legal Organisational Chart
• Financial Statements
• Copies of All Agreements
involving Borrowing or Money or
Credit
• Administration and Custody
Agreements
• Proof of Prior Track Records
• Sample of how firm intends to
Monitor and Control Risk in the
Portfolio
• Operating Procedures Manual
• Compliance Manual
• Full list of References
13. CHINA HEDGE: Do you have
any plan to expand your business
in China since China has attracted
more and more attentions from the
world? If you have any plan to set
up your China branch or office?
How do you position yourself to
better share the growth story of
China?
Simon:
We are seeking to acquire a
business in Hong Kong to give us
increased Asian focus. We see
China as big buyers of global
portfolios in the future.
14. CHINA HEDGE: The Chinese
sovereign wealth fund, CIC, is
expected to invest 6 billion into
hedge funds by the year end. And
if you are going for the
competition, what do you think is
your strength that distinguishes
yourself from other FoHF managers?
Simon:
Fortune offers an
investment advisory service where
we assist money managers with
alternative allocations,
principally focused on hedge funds
but spanning a multi-asset class
model. We have one of the most
experienced teams in the business
and today we advise some of the
largest families and institutions
in Europe, providing them with
deep and trenchant analysis of the
opportunity set and building decorrelated, diversified
portfolios within a fully
automated IT platform.
Fortune has developed
considerable expertise in the
managed account approach to skill
based investing. Our program draws
on an investable universe of about
100 managers which we can use to
build absolute return portfolios
offering daily pricing, bi-monthly
liquidity and the safety of a
small number of carefully
monitored custodians. A fund of
managed accounts has a long and
credible track since 1999 (as a fund
of funds and since 2007 as a fund of
managed accounts)
23.7.2009 by Yolanda Zheng in
London
Profile of Simon Hopkins:
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Simon Hopkins, CEO and
co-Founder of Fortune Asset
Management Limited
Simon Hopkins has over 20
years' experience in the
European investment business.
He started his investment
banking career with SG Warburg
& Co in 1986, joining UBS in
1988 as a European equity
specialist. From 1990 to 1996
he spent over six years as a
French equity market
specialist in Paris, first
with HSBC James Capel, then |
|
Nomura France, where as
director of French equities he
built a highly-rated equity
and research business.
In 1996, Mr. Hopkins
established Fortune, a
diversified hedge fund
management and advisory firm,
and its research affiliate
Global Fund Analysis. In 2006,
Close Brothers Group plc, a
leading UK merchant bank,
acquired a controlling
interest in the firm. Today,
Fortune manages the Fortune
family of funds, and numerous
customised mandates,
overseeing over £3 billion for
a wide range of institutional
clients including insurance
companies, private banks,
family offices and endowments.
The firm has also seeded over
20 single strategy funds over
the last decade through its
unique emerging manager
program. He brings to the
Fortune team a deep
understanding of global
investors and the driving
forces of fund investing.
Mr. Hopkins is a regular
commentator on fund industry
topics in the financial media
and has addressed numerous
conferences, the OECD and the
London School of Economics on
hedge fund investing. He
graduated with honours from
the University of Bristol's
Faculty of Law in 1986. |
Please check out CHINA HEDGE
Weekly for more
exclusive hedge
fund manager interviews. If you
have any other questions with
regards to the interview reports,
please contact Yolanda Zheng,
yolanda.zheng@chinahedge.com.cn
for more information.
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