Ratio weathers severe stress test for smaller hedge fund boutiques

Thu Mar 24, 2011



Like many small boutiques, Ratio Asset Management suffered disproportionately in the industry downturn. But inflows are returning, the firm is expanding and the five-year performance track record is very solid


Jonathan Sharpe

Ralph Jainz Ton Tjia


As a demonstration of just how pronounced and protracted the industry downturn has been for even some of the more established hedge fund boutiques over the past two or three years, long/short European equity firm Ratio Asset Management offers a pretty good case in point.

Founded by former Gartmore European smaller companies head Jonathan Sharpe and ex-Cazenove partner and top-ranked small-caps broker Ralph Jainz in February 2006, Ratio has just celebrated its fifth anniversary and has just about done exactly what it set out to do five years ago - despite having lived through the most violent equity market cycle imaginable.

Its flagship Ratio European Fund - which focuses on small and mid-cap equities - has delivered solid and largely uncorrelated five-year performance during a wild period for European equities, and for smaller-company stocks in particular.

Last year it delivered a net return of 12.73% on...

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