Hedge Funds Club’s Stefan Nilsson has a chat with Stephen “Fish” Fisher, Chairman, CIO and Co-Founder of First Degree Global Asset Management in Singapore. The two former JP Morgan colleagues talk about commitment and character in investment management.
Eleven years into First Degree’s journey, you now run a well-established fund platform. What are the key success factors that have taken the firm to where it is today?
One of the best pieces of advice I received when I started at JP Morgan in 1992 was “Just stick around”. I stuck around there for 18 years and now for 11 years in my own firm. Longevity shows commitment and a certain type of character that clients can rely on. Especially in asset management where clients are making long-term decisions. The fact that we are here after 11 years is a proof statement that takes 11 years to make.
The funds on your platform are quite diverse across hedge funds, venture capital, private equity, digital assets and so on. When considering additions to your platform, do you look at what strategy bucket they fit into or do you simply look for great PMs? And what traits do you look for in exceptional fund managers?
We don’t control who walks through our door. The fact is that in recent years alternative ‘beta’ sources have been popular as opposed to traditional alpha strats such as long-short equities. Our skew towards VC, PE, private debt, microfinance, etc reflects, in part, the market appetite for alternative beta. That said, we don’t accept any strategy and I can honestly say we reject 90% or more of the strategies presented to us. We have a number of rules that assist us to screen managers. First, they have to have a strategy with a reasonable chance of success. The investment thesis must make sense. Second, if it’s an alpha strategy then it has a higher bar to jump than a beta play. Alpha is very, very difficult to earn consistently. Third, the manager must be engaging and engaged. To be successful the manager needs to sell himself and needs to be focused on his work. The manager’s personality is a big deal to us. Can we trust him with our licence? Portfolio management is about attention to detail. Basis points matter. This is not a Wolf of Wall Street game.
Before you launched First Degree in 2011, you, like me, worked at JP Morgan. With now more than a decade of running your own shop, what has been the best part of this transition?
Big successful organisations have a brand that is tightly guarded. Like a supertanker, it takes miles and forever to change course. There is a place for creativity but this is not their main function. One can be someone at a big organisation but it’s more difficult to do something. I always want to do stuff. Having your own shop facilitates this objective.
As your business has continued to grow, do you still have time for your other passions, such as being a DJ?