New and established players take trophies in a tough year
A mix of long-established names and some newcomers to the hedge fund industry came through in a turbulent and challenging year to win prizes at the EuroHedge Awards for 2007
More than 1,000 leading figures in European hedge funds gathered at The Grosvenor House on London's Park Lane on 24 January for the seventh annual EuroHedge Awards to honour the top-performing players in the industry in 2007.
In the spectacular setting of the Great Room, the great and the good of the industry came together for an evening of celebration, entertainment and networking – with the 20 awards being carried off by a mixture of new and established names.
Despite the vicious market conditions in the opening weeks of the year and the news earlier in the day from Paris of the multi-billion trading fraud at SocGen, the mood was generally upbeat – although the winners left no doubt that 2008 is likely to be an even more challenging year than 2007 for the industry as a whole.
The turbulent conditions in the second half of 2007 had made competition for nominations especially hard-fought, with the eventual winners in a number of strategy areas remaining unclear until the December returns were in.
In some cases, the awards were very close-run races indeed. In others, the results were more clear-cut. And a number of funds that had looked well set for nominations earlier in the year fell by the wayside as the more difficult conditions in the final months of the year took their toll.
But, as ever, it was a year when quality and consistency shone through – both in terms of the more familiar players and the relative newcomers – and all the managers that earned nominations in a very testing year are to be congratulated.
GLG Emerging Markets, the big macro and emerging markets hedge fund run by Greg Coffey at GLG Partners, took the plaudits of the industry by winning the overall Fund of the Year award.
Greg Coffey (right) and his growing GLG Emerging Markets team beat off tough competition to win the Fund of the Year Award, adding to the New Fund of the Year Award they won last year
The GLG fund, which had won a New Fund of the Year award the previous year for its outstanding performance in 2006, won the main award this year after a second successive year of stunning returns – posting a net return of more than 50% for the second year running.
Coffey and his team beat off strong competition from a high-quality shortlist of six contenders for Fund of the Year – comprising Algebris Global Financials, Brevan Howard, Lansdowne UK Equity, Odey European and Peloton ABS.
Other big winners this year included Odey European, which won the major award for European Equity after an outstanding performance that saw the fund return 57% in a year marked by increasingly volatile and tough equity market conditions – and Brevan Howard, which shared the award for the Macro fund of the year together with GLG Emerging Markets with a very impressive net return of 25% on its huge size of over $16 billion.
The much-coveted Management Firm of the Year Award was won this time by Sloane Robinson, reflecting the global equity firm's success in achieving the highest level of outperformance over the EuroHedge medians across its range of products and high weighted Sharpe ratios, with five of its funds returning more than 35% on the year.
Sloane Robinson – led by Hugh Sloane and George Robinson – won the firm of the year award from a very strong field of seven nominees comprising BlackRock, CQS, GLG Partners, Lansdowne Partners, Threadneedle and Trafalgar Asset Managers.
In a very close race in UK Equity, Threadneedle UK Crescendo ended a multi-year winning streak for Lansdowne UK Equity – which had previously won the award three years running and was only narrowly denied an unprecedented fourth win.
Algebris Global Financials – an affiliate of The Children's Investment Fund that has made a stunning start over its first 15 months – won the new specialist sector award in Global Equity with its outstanding return of 53% in a very challenging year for the financial sector, while Sloane Robinson International took the Global Equity award for funds operating across all sectors.
Peloton ABS won the Credit award with its spectacular net return on the year of 87% and also won the New Fund of the Year award for non-equity strategies. The New Fund of the Year award for equity strategies was won by Horseman Emerging Market Opportunities – the newest addition to the high-performing Horseman stable, which posted a net return on the year of 61%.
Other first-time winners at the awards this year included Altima Global Special Situations in Event-Driven, BlackRock UK Emerging Companies in Small-Caps, North of South in Emerging Market Equity, Duet Global Opportunities in Equity Market Neutral & Quant Strategies, Maple Leaf Macro Volatility in Convertible & Volatility Strategies, Lionhart Aurora in Mixed Arbitrage & Multi-Strategy and BlueCrest's BlueTrend systematic fund in Managed Futures.
Meanwhile, repeat winners from 2006 included Morley G7 in Fixed-Income and JP Morgan Europe Dynamic Long/Short in the European Equity category for funds with assets of less than $500 million.
For the JPMorgan fund, the award for the second year in succession was all the more notable for the fact that the firm had lost the fund's previous portfolio manager early in 2007 and had thus succeeded in continuing its excellent progress under a new management team.
It was a year when many of the top names in the industry came to the fore – with the high concentration of nominees that had previously won either nominations or awards in previous years highlighting the consistent excellence of a number of funds in different strategy areas over the years.
None has been more consistent in this regard than CQS, the big convertibles fund run by Michael Hintze and his team – which maintained its unique and remarkable record of a nomination for the Convertible award in each of the seven years since the EuroHedge Awards began.
There was also a fifth nomination for Lansdowne UK Equity – the $7 billion fund run by Peter Davies and Stuart Roden that was once again the high performer in its category in terms of return, despite being by far the biggest fund in its peer group.
Other five-time nominees this year included Gartmore's AlphaGen Volantis and Old Mutual UK Specialist in Small-Caps, GLG Market Neutral in Convertibles and Winton in Managed Futures.
The shortlists in virtually all of the main categories were peppered with previous nominees, underlining the emergence in the industry of so many consistent generators of high risk-adjusted returns over the years – and the tried and tested nature of our awards methodology in identifying and highlighting consistent excellence.
Apart from the addition of the new specialist sector award in Global Equity, the line-up of categories and the methodology for the EuroHedge Awards this year were virtually unchanged from previous years.
To reflect the increasing size and scale of the industry – as well as the decline of the dollar – the minimum level of assets required for a fund to quality for an award was raised to $250 million for all but two of the main categories: Small-Cap Equity and the smaller-fund European Equity award.
As in previous years, we stuck to our tried and tested formula for identifying and deciding the nominees and the eventual winners – with the Sharpe ratio being used to select the nominees and the fund with the best return then winning each award, providing its Sharpe ratio was within 25% of the best Sharpe ratio in the category.
To ensure that funds with high performance are not beaten by those with very low returns solely because the manager has achieved very low volatility, we also require that any winner must achieve a return above that of the relevant EuroHedge median.
For the New Fund awards, we took into account all the new funds that had begun trading between July 2006 and June 2007 – with the minimum asset size for inclusion being set at $50 million.
For Management Firm of the Year, only firms with at least four funds and at least $2.5 billion of assets under management were taken into account – with the final decisions being made by a points-scoring system that ranks various factors including overall outperformance against the EuroHedge medians (weighted by assets), average Sharpe ratios (also weighted) and growth in assets (by absolute amount and percentage).
In winning their respective big awards this year, GLG and Sloane Robinson have become the first firms over the last seven years to take both a Fund of the Year award and a Firm of the Year award – although no group has yet won the management firm of the year award more than once.
Previous winners GLG and Lansdowne were both strong contenders for the Firm of the Year award again this year in what was, as ever, a very close-fought race. GLG received a record seven nominations for its ever-growing range of funds – while CQS, Lansdowne, Peloton, Sloane Robinson and Trafalgar all achieved four nominations.
To view the full report on the nominees and winners in individual award categories click here.
EuroHedge awards 2007 winners: at a glance
Threadneedle UK Crescendo
BlackRock UK Emerging Companies
EUROPEAN EQUITY (under $500m)
JPM Europe Dynamic Long/Short
EUROPEAN EQUITY (over $500m)
GLOBAL EQUITY (all sectors)
Sloane Robinson International
GLOBAL EQUITY (specialist sectors)
Algebris Global Financials
EMERGING MARKET EQUITY
North of South Emerging Markets
Altima Global Special Situations
EQUITY MARKET NEUTRAL & QUANT STRATEGIES
Duet Global Opportunities
CONVERTIBLE & VOLATILITY STRATEGIES
Maple Leaf Macro Volatility
MIXED ARBITRAGE & MULTI-STRATEGY
Morley G7 Fixed Income
HIGH YIELD, EMERGING MARKET & DISTRESSED DEBT
Spinnaker Global Opportunity
GLG Emerging Markets
NEW FUND OF THE YEAR – ARBITRAGE, RELATIVE VALUE & MACRO
NEW FUND OF THE YEAR – EQUITY STRATEGIES
Horseman Emerging Market Opportunities
MANAGEMENT FIRM OF THE YEAR
FUND OF THE YEAR
GLG Emerging Markets