Due to government restrictions and social distancing recommendations, all our networking events in Tokyo, Singapore, Hong Kong and Australia are currently on hold. We are monitoring the situation and hope to be able to resume our event schedule soon.
Monthly Archives: March 2021
The investment team that manages the award-winning Global Arbitrage Fund at Singapore-based Ariana Investment Management has spun out to form their own, employee-owned firm called Aravali Asset Management from which they will continue to manage the Global Arbitrage Fund. The Global Arbitrage Fund is a market-neutral strategy that trades in a range of arbitrage styles. Mukesh Dave is the Founder and CIO. Prior to launching the Global Arbitrage Fund, Mukesh worked at Savant Partners, UBS, Barclays and Citi.
German-born Katharina Reimer is a well-known face in Hong Kong’s financial industry. She has worked at ING Investment Management, Atradius and several other firms. Since 2017 she is the Executive Director of the Karen Leung Foundation, a cancer charity with close links to the hedge fund industry which will host the 9th annual SohnX Hong Kong conference on 20th May (event details here: SohnX Hong Kong — The Sohn Conference Foundation). HFC’s Stefan Nilsson caught up with Katharina to find out more about the life she leads in Hong Kong.
From where and how do you get your daily general news updates?
I generally start the day by browsing through my various news alerts which come in via email. I am also a subscriber of The Economist and listen to their podcasts when I walk up the Peak in Hong Kong a couple of times a week. I rarely have time to read an actual newspaper with two kids under five in the house.
What do you do to unwind on a weekend?
Unwinding on the weekend tends to be a challenge as we have a fun yet always busy family life. However, my husband and I like to steal ourselves away for long Saturday lunches and I often do a solo hike and coffee prior to that for some “me” time.
Can you name a great book you have recently read?
As mentioned earlier, “reading” is somewhat of a luxury at the moment for me. The last book I read in full was “The Moment of Lift” by Melinda Gates. The last audio-book I listened to is called “The Woman I Wanted to Be” an autobiographic account by Diane von Furstenberg. I tend to gravitate to books that connect to real-life and personal stories. Two of my all-time favourite novels are “The Alchemist” and “Shantaram”.
Your soundtrack of choice?
Anything old: The Rolling Stones, Mick Jagger, David Bowie, Queen, to name a few. I do have a couple of DJs I sometimes listen to who paved the way for modern music back then in Germany – after all, I am from Berlin, the music capital of Germany.
What drink do you start the day with and what drink finishes it?
It used to be an oat latte, but I recently participated in a nutritional reboot program and I now have a green or herbal tea to start the day and once I get to the office, I’ll have that latte. Depending on what day of the week it is, either sparkling water or a glass of Malbec finishes the day.
What’s the worst money mistake you’ve made?
I invested in a new restaurant launch in Hong Kong. Needless to say, in a city that features three restaurants per person, this was not the smartest well-thought-out investment idea.
Have you ever had a great mentor and what did you learn?
I had several great mentors along the way and especially in the earlier parts of my career. One of the biggest lessons I learned was to never be afraid to ask a question, as regardless of how old you are, there will inevitably be things you don’t know.
What gives you energy?
Sport and exercise. I don’t really run anymore that much these days, but I play tennis and hike regularly. If I don’t, I really do see a difference in my focus and energy levels.
How do you stay grounded and focused as a person in these turbulent and fast-changing times?
I am a person which works extremely well under pressure. Challenging times are generally nothing that worries me. 2020 has certainly upped the ante a bit and staying grounded was more of a task than normal. Again, exercise and carving out a bit of “me” time are generally key for me to prevail.
Can you name a terrific restaurant that you love?
Currently in Hong Kong, given that travel is limited, my favourite place is Frantzen Kitchen. The food and wine menu are delectable and the French toast with truffle is absolutely divine. I almost don’t want to recommend it, as it is tiny and reservations are hard to come by, given they now operate at half capacity.
What’s your favourite museum in the world?
The Metropolitan Museum of Art in New York.
Are you active on social media and what do you actually use it for?
In 2019 we started looking differently at our cancer awareness work and I signed up for an Instagram account. Now, next to LinkedIn, that’s my preferred channel for research when it comes to wellness brands and trends. LinkedIn remains more of a corporate outreach channel for me and where I keep up to date with some topical matters that leaders talk about.
Do you have any secret guilty pleasure that you are prepared to reveal here?
Ice cream – I love it and can eat a whole tub.
What kind of battle dress do you normally put on for work?
My mother always wore elegant clothing and mostly very feminine items. I have stepped in her footsteps and mostly wear a dress or a feminine ensemble. In my book, casual Friday goes as far as dark jeans, crisp shirt and a blazer.
Do you celebrate your wins? If so, how?
Yes! And celebrations would typically involve a nice lunch or dinner paired with a glass or two of champagne with the team.
What makes you happy?
My husband and the kids. My youngest son was born just before Covid started in Hong Kong and he has by far been our silver lining in all the madness.
After many years in New York with Sompo Japan Nipponkoa Asset Management, Kota Matsuura has moved back to Tokyo. He has joined Mita Securities as a Portfolio Manager.
Scott Clements has joined Tribeca Investment Partners in Singapore in a business development role. Scott was most recently a Managing Director at Canaccord Genuity Group. Previously he has worked at Eigencat, Scotia Bank, Scotia Capital, TMG Financial Products and Hambros Bank.
Trevor Easterbrook has joined The SILC Group in Sydney as Director of Investment Solutions. Trevor is focusing on providing financial solutions in direct investments, managed accounts, structured products and boutique alternative assets to the group’s wholesale clients. Trevor was until recently CIO of Levitas Capital, a hedge fund forced to shut down after being the target of a cyber attack initiated via a fake Zoom call invite. Trevor has previous experience from Ausbil Investment Management, PMA Investment Advisors, UBS, ABN Amro, Bankers Trust and PwC.
Chad Slater, best known as Co-Founder of Morphic Asset Management, has joined Sydney hedge fund Drummond Knight as a Senior Investment Manager. Drummond Knight was founded last year by former Point 72 Portfolio Manager Lindsay Taylor. Chad co-founded Morphic in 2012 and in 2019 it was acquired by Ellerston Capital, a $5bn Australian fund manager. Slater started his career with a stint at the Australian Federal Treasury and then worked at Putnam Investments, BT Investment Management and Hunter Hall.
Akira Muramatsu has joined Natixis Investment Managers in Tokyo in a marketing and client service role. He most recently spent nearly seven years with Winton and was previously at Man Group, MSCI, Goldman Sachs and Shinsei Bank.
Interview – Scott Treloar: “The alternative investment industry needs revolution rather than evolution”
HFC boss Stefan Nilsson talks with Noviscient CIO Scott Treloar in Singapore about how to reimagine investment management, putting investors first, digital infrastructure, revolution vs evolution and teaching the next generation of portfolio managers. Scott set up Noviscient in 2016. Prior to that he was Portfolio Manager and Chief Risk Officer at Vulpes Investment Management and has prior experience from Deutsche Bank. He started his career in Australia with Macquarie Bank, Novalis Capital and Committed Capital.
You launched Noviscient in 2016 to address the challenges of selecting managers with skill and combining their strategies to create customised solutions for investors. Tell us about your first few years on this entrepreneurial journey.
Our mission is to “reimagine investment management.” The challenge is how to build a transparent market for skills to allow investors to access those emerging fund managers generating excess returns. So, we spent the last few years developing a platform model to source, select and allocate capital to global emerging managers. But we do it in a particular way. Rather than sending our investors’ capital out to these emerging managers, we get them to send their trading strategies to us and we execute on their behalf. It is an open partnering arrangement. We are a fund manager without fund managers. There are two major benefits to this approach: 1) we remove counterparty risk and hence the need for slow and costly operational due diligence on the emerging managers – the capital never leaves our platform; and, 2) we are now working with and risk managing our emerging managers in real-time and providing transparency and control to our investors. We see what we are doing as industry-changing. The vision is to digitise the whole investment management value chain to provide better, faster, cheaper solutions for our investors. This is not a trivial undertaking and we have put a lot of effort into our platform and algorithms, from capital raising to investing to reporting. In parallel, we are building a community of emerging managers, service providers and investors that believe, as we do, that there must be a better way for the industry to operate – one that genuinely puts investors first.
Low cost for investors is something you seem focused on. How does Noviscient achieve that while still being able to build a viable business?
While investment management is all about information, it currently operates in a physical, offline way. Information is managed by legacy technology and held in the form of pdfs, emails, checklists and in people’s heads. Imagine if we could operate in a fully digital mode. Managers, investors and service providers linked by APIs. Information held in online databases. A fully online process of governance, investing and reporting. We think this may not be feasible for incumbent fund houses with their vintage technology and offline processes, but for new entrants with the advantages of cloud capabilities and open-source software, it is absolutely possible. We are doing it better, faster, cheaper. My COO says I should not say we are “cheap”. But I don’t mind being cheap. There is a massive wedge between the cost structures of online and offline businesses. By being online and benefiting from platform economies of scale, we operate at around 25% of the equivalent unit cost compared with incumbents. Further, it allows us to charge performance fees rather than management fees. This aligns with our mentality of creating value for clients and sharing in some of that value (performance fees), rather than transferring value from clients (management fees).
What can you tell us about your new “fund in a box” initiative?
Our digital infrastructure, linked with our use of Singapore’s VCC initiative, allows us to set up and operate new funds very quickly and cheaply. Some of our emerging manager partners have investors looking to allocate capital specifically to their strategies. But they don’t want to have the costs and time lag of setting up their own fund. They have been asking if we can help them. Hence, we started working on this “fund in a box” initiative, which allows us to set up a fund vehicle quickly and far more cheaply with all the benefits of being online – transparency, real-time reporting and so on. Essentially, we partner with them. They focus on strategy generation and we provide robust infrastructure. Managers can start to build a track record with a much lower AUM, from $10m, on a modern platform with quality support. We remove the major frictions encountered by new managers when trying to get started in this industry.
How do you think the alternative investment industry will evolve after the global pandemic gets under control? Are trends such as remote working here to stay?
I think the alternative investment industry needs revolution rather than evolution. Remote working is just a start. The current investment management model is from the 20th century. Big fund houses focused on growing AUM through marketing and distribution arrangements. Structural and economic frictions are blocking capital allocation to those emerging managers generating stronger returns. It is not delivering the performance, alignment or transparency that investors want. Instead, I see an ecosystem of specialised emerging managers focused on generating alpha and connected via APIs to platforms providing execution and reporting infrastructure. At the same time, the traditional fund houses will give way to a small number of large, low-costs market/factor firms offering exposure to risk premia at scale. And finally, robo-advisors will transform into “integrators” that elicit investor requirements and construct solutions using the alpha and risk premia components mentioned above. And that will be it. A smaller, more focused, value-creating industry. Ineluctable, but it will take some time.
You have been sharing your investment management expertise by lecturing at Singapore Management University and Henley Business School. Why do you enjoy teaching?
I find teaching smart quantitative finance students helps me learn and at the same time I can provide the students with some of my experiences across investment banking and asset management. I am a sort of non-traditional professor, but they seem to like it.
What skills do you think are the most important to have for people who want to succeed in investment management in the coming years?
The first I think is attitude. I see investment management as hopefully becoming more of a profession focused on creating value for our clients (investors) and less on individuals becoming wealthy. That is stewardship over salesmanship (a reference to the book “Enough” by John Bogle). At the end of the day, someone is “successful” if they can contribute to their field and to others, not if they end up with the most money – although this is not necessarily a universal opinion, I know. More technically, investment management professionals will need skills in data engineering and analytics. At the high end, it will be skills involved in modelling the dynamics of financial markets while appropriately handling the variability and uncertainty. I also see sequential decision-making (stochastic optimal control/reinforcement learning) as becoming more and more important. In short, we must move on from marketing and relationship management to a more professional, data-driven industry that is characterised by an “investor-first” mentality.
Japanese insurer Dai-ichi Life has sold its 17% holding in Janus Henderson. The Japanese insurer and the US$402 billion London-based asset manager will, however, continue to work together, including developing and distributing new fund products in Japan.
Yasuhiro Odajima, formerly of Aquila Capital, Pictet Asset Management and Man Investments, has joined the Alternative Investment Department of Grid Parity for Sustainable Society in Tokyo.