The Managed Funds Association’s Forum 2012 conference is well underway here in Chicago, and we love the chance to learn what some of our favorite CTAs are up to, as well as learning more about emerging managers. With so many managers in town, it’s not unusual to bump into them around town, such as our encounter with Troy Buckner of NuWave ($880m AUM) after dinner last night. We learned that he’s a rollerblader and a skier, but we couldn’t help talking shop, as well. Buckner explained to us that he believes large CTAs have benefitted from a tailwind in form of falling interest rates, and are likely to struggle (but not blow up) in a different environment. When and whether we reach that environment, we just have to wait and see.
We’ve also had a chance for some good conversations with other managers, as well, such as Roland Austrup of Integrated Managed Futures ($27m AUM), who continues to impress us with the program’s research and development. They are always hard at work new ideas to potentially improve the program, and are focused on having the best risk management possible. Their team of researchers at the University of Waterloo gives them a leg up in the research department when compared to other emerging managers. The global concentrated program, which was their big research effort back in 2008 and 2009, recently reached the 3-year track record mark in March. Designed specifically for high net worth investors, this program continues to be an excellent lower volatility multi-strategy program, and one we recommend investors consider for their portfolios (on Attain’s Recommended list).
We also had a chance to sit down with Doug Bry of Northfield Trading ($274m AUM) and learn about his unique path to becoming a CTA. In a previous life, he was a criminal defense attorney for 10 years. His next venture, Northfield, was originally launched as a software development company before evolving into a CTA in 1989. The program is at new all time highs for many of their individual accounts, while the composite just below the high water mark. Bry also talked with us about his experience as NFA director, and had good things to say about the work that the new set of directors is doing on the MF Global debacle.
Things are just warming up, and we have plans to talk with as many managers as the MFA schedule will allow. Stay tuned.
Ignoring the Biggest CTA Trade in Years
Several news organizations couldn’t help but fall all over themselves this week talking about how George Soros made a billion in the Yen and other U.S. Funds Scored Big in the Yen. We hope this isn’t the contrarian indicator that kills the trade, as the Yen is on a historic slide – new Prime Minister Shinzo Abe has been following through on his initial efforts to devalue Japan’s currency. Not even the hullaballoo over the G7’s criticism earlier this week was able to elicit more than a temporary hiccup in the trend:
Disclaimer: past performance is not necessarily indicative of future results.
With a big move like this, there are always going to be plenty of people making money (and many who are losing money). But when the press started pointing out the big winners this week, we couldn’t help but notice a glaring omission: no mention of CTAs. We know that quite a few CTAs have made (or are currently making) money on short Yen trades, including Covenant Capital Management Aggressive, Briarwood Capital Management Diversified, Mark J. Walsh & Co. Standard, and Integrated Managed Futures Corp. Global Concentrated. (Disclaimer: past performance is not necessarily indicative of future results).
One of the best trades for managed futures in years, and not even a mention in mainstream coverage about it? Well, Bridgewater gets a mention toward the end of the WSJ article, but no one seems able to decide whether they’re a hedge fund or a CTA (for our money, they’re the former, though BarclayHedge counts them as a CTA). Just another day in our industry, and a reminder of why the lack of hedge fund/CTA distinction in the media rubs us the wrong way.