Key Takeaways
- • Kairos Multi Strategy Fund won the Hedge Funds Review European Fund of Hedge Funds Award for best sub-$500 million diversified FoHF in 2015, recognizing its active portfolio management approach and diversified holdings across event-driven, European equity long/short, and Asian equity long/short strategies.
- • The fund's portfolio composition between Q3 2014 and Q2 2015 consisted of approximately 20% event-driven strategies, 18% EU equity long/short funds, and 16% Asian equity long/short funds, emphasizing geographic and strategy diversification.
- • Kairos employs an aggressive manager discovery strategy, targeting 2,500 manager meetings annually across Asia, Europe, and the US, with explicit focus on identifying undiscovered, motivated managers running new funds rather than established players in crowded trades.
- • As of November 2015, the fund recorded zero losses year-to-date across its portfolio except for one US-based fund with minimal basis point declines, with its top-performing Asian equity manager delivering over 30% returns through market timing and multi-country equity exposure.
- • The investment philosophy emphasizes disciplined portfolio rotation, systematically selling outperforming funds and replacing them with higher-conviction positions, with CIO Michele Gesualdi noting that relying on single funds creates unnecessary concentration risk.
Summary
Kairos Multi Strategy Fund secured recognition as the best diversified fund of hedge funds under $500 million in the 2015 Hedge Funds Review European Fund of Hedge Funds Awards, validating its multi-strategy approach to manager selection and portfolio construction. The award reflects the fund's differentiated strategy of actively rotating managers while maintaining exposure across complementary hedge fund categories, including event-driven strategies, European and Asian equity long/short managers, and other specialized positions.
Between Q3 2014 and Q2 2015, the fund's portfolio construction reflected balanced diversification with event-driven strategies representing approximately one-fifth of assets, EU equity long/short funds at 18%, and Asian equity long/short funds at 16%. This allocation structure enabled exposure to multiple market drivers while reducing single-strategy concentration risk. Michele Gesualdi, Chief Investment Officer of multi-manager funds, emphasized that this rotational approach is essential given the varying drivers of outperformance across market cycles, requiring continuous assessment rather than static positioning.
The fund's competitive advantage centers on proactive manager discovery and willingness to back emerging fund managers with strong incentive alignment. Rather than exclusively targeting established names, Kairos prioritizes identifying motivated managers launching new funds, reasoning that entrepreneurs with concentrated business exposure tend to exhibit superior risk discipline. Senior analyst Moreno Tatangelo highlighted that this approach provides access to uncrowded trading opportunities unavailable to competitors. The team pursues approximately 2,500 manager meetings annually across Asia, Europe, and the United States—a level of engagement Gesualdi suggests exceeds industry norms for fund-of-funds competitors.
Performance metrics as of November 2015 reflected the efficacy of this strategy. The portfolio recorded no losses year-to-date with only one US-based fund producing minor basis point declines. The standout performer was an Asian equity specialist that generated returns exceeding 30%, leveraging flexibility to deploy capital across multiple Chinese and Asian equity markets and demonstrating effective market timing execution. This concentrated outperformance underscored the value of the fund's manager-discovery focus, particularly in emerging regional markets where information asymmetries create performance opportunities for disciplined selectors.
Between Q3 2014 and Q2 2015, the fund's portfolio construction reflected balanced diversification with event-driven strategies representing approximately one-fifth of assets, EU equity long/short funds at 18%, and Asian equity long/short funds at 16%. This allocation structure enabled exposure to multiple market drivers while reducing single-strategy concentration risk. Michele Gesualdi, Chief Investment Officer of multi-manager funds, emphasized that this rotational approach is essential given the varying drivers of outperformance across market cycles, requiring continuous assessment rather than static positioning.
The fund's competitive advantage centers on proactive manager discovery and willingness to back emerging fund managers with strong incentive alignment. Rather than exclusively targeting established names, Kairos prioritizes identifying motivated managers launching new funds, reasoning that entrepreneurs with concentrated business exposure tend to exhibit superior risk discipline. Senior analyst Moreno Tatangelo highlighted that this approach provides access to uncrowded trading opportunities unavailable to competitors. The team pursues approximately 2,500 manager meetings annually across Asia, Europe, and the United States—a level of engagement Gesualdi suggests exceeds industry norms for fund-of-funds competitors.
Performance metrics as of November 2015 reflected the efficacy of this strategy. The portfolio recorded no losses year-to-date with only one US-based fund producing minor basis point declines. The standout performer was an Asian equity specialist that generated returns exceeding 30%, leveraging flexibility to deploy capital across multiple Chinese and Asian equity markets and demonstrating effective market timing execution. This concentrated outperformance underscored the value of the fund's manager-discovery focus, particularly in emerging regional markets where information asymmetries create performance opportunities for disciplined selectors.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.