Paul Brewer, Deepak Gulati and Philippe Jabre pursue three very different investment strategies, but all reached the same conclusion in recent months: time was up. Weak recent performance led the trio – who founded Rubicon Fund Management, Argentiere Capital and Jabre Capital Partners – to decide to return money to investors in their flagship funds.
The managers are not departing the stage quite yet, as some of their firms’ smaller offerings will continue. But it seems a significant moment that three founders of recent Billion Dollar Club firms should choose to step back – a reminder that performance, not reputation, determines success.
Not that managers need the reminder, particularly in the wake of a year that proved disappointing for so many. The calamitous final quarter – the worst on record for the EuroHedge Composite Index – showed managers were unprepared for newly volatile markets. They must be ready now, as few expect the relatively calm start to the year to last.
Our latest European Billion Dollar Club, which provides a year-end snapshot of the industry, reveals the impact of the stormy final quarter. Some big-name equity managers, including Lansdowne Partners and Pelham Capital, slipped down the rankings, while Andurand Capital Management and Horseman Capital Management were among several to be relegated.
No one expects such firms to be out of the rankings for long. The recovery could be a longer one for Swiss manager GAM, which slid 20 places following its well-reported troubles (qualifying assets fell by a striking two-thirds). In contrast, the success of some firms, most notably Selwood Asset Management, which rose 53 places after being named EuroHedge Firm of the Year, provides grounds for hope.
The buzz surrounding the industry return of Martin Taylor, three years after closing his hugely successful Nevsky Capital, is also a reason to be optimistic. Taylor is a manager who did very well then chose to retire, rather than hang on, when performance declined. Investors appear to respect that, judging by suggestions his launch could be Europe’s biggest since the return of Chris Rokos in 2015.
Performance is everything, and the enduring appeal of managers such as Rokos and Taylor rests on their track records. But there is only a very limited number of star managers from times gone by preparing to return. Instead of focusing exclusively on such names, investors trying to find the stars of tomorrow could do worse than consult our list of recent EuroHedge Award winners and nominees.
We interview two of them, Lansdowne’s energy manager, Per Lekander, and Aspect Capital’s systematic macro team, in this issue. They are living proof of the pipeline of individuals and ideas waiting to deliver for investors even as old stars fade. Amid the gloomy headlines that can sometimes enshroud this industry, the rising generation of talent should not be forgotten. The closure of big-name flagships makes for good headlines, but there are plenty of new managers ready to take their place.
Editor’s letter: Ins and outs show performance is all on EuroHedge.