Gladstone Capital Management’s George Michelakis, whose Lasker offering won Fund of the Year at the 2018 EuroHedge Awards, has discussed his strategy and career in a rare interview.
The former Lansdowne man shared his views on the prevailing equities environment, his approaching to portfolio building and how his background as an International Chess Master informs his broader investment philosophy.
Michelakis runs the firm’s $250m Gladstone Lasker strategy, which won the prestigious leading fund prize following standout double-digit gains over the past two years. The long/short fund continues to perform, up approximately 7.2% to the end of the March this year.
Former winners of Fund of the Year include CQS, TCI, Brevan Howard, GLG and other leading managers (see table below).
Since launching in 2006, the strategy has recorded double-digit gains in various market environments. In 2018, as equities took a tumble, the strategy advanced 22.8%, which followed a 37% return the previous year.
“Setting up a portfolio in a straightforward way to be long certain assets and short certain assets hasn’t really worked for managers,” he told EuroHedge. “It hasn’t been straightforward because you’ve had politics, you’ve had threats of recession, you’ve had trade wars – a lot of disruption which has meant that any single narrative hasn’t lasted long.”
“We are trying to create a much more all-weather approach to stock-picking, portfolio construction and risk management,” he added. “When long/short equity is done well, it monumentally outperforms traditional long-only investing.
Key shorts last year included Maxar, the Canadian robotics and surveillance technology manufacturer, stricken UK construction management business Carillion, and Banco Popular in Spain.
Elsewhere, the fund had exited its positions within the FAANG group (Facebook, Amazon, Apple, Netflix and Google) by May 2018, having been investors in Apple since 2009 and in Google since 2010.
Prior to his investment career, Michelakis came third in the World Under-20 Chess Championships in 1992 and holds the FIDE International Chess Master title.
“I think there’s a competitive, sporting dimension,” he said of the similarities between chess and hedge funds. “To me, it’s all about seeing all the constituent parts of what we do as these unique pieces… We’re very much now carving up, or almost deconstructing, the long/short strategy into its constituent parts and pushing further down that road, which is very much a unique path, a path of independence, for us.”
The full interview will appear in the April issue of EuroHedge and online next week
Coming next week: Interview with Fund of the Year Gladstone Lasker on EuroHedge.