Key Takeaways
- • River and Mercantile launched its Global Macro Fund in February 2018, managing $2.1 billion in assets across its macro strategy, which represents the smallest of the group's four investment lines but serves as the natural home for the firm's first hedge fund offering.
- • The fund's investment approach explicitly combines quantitative models with discretionary decision-making, operating under the principle that macro considerations are paramount to investment decisions and that systematic and discretionary processes must be integrated.
- • Co-portfolio managers Joe Andrews (nine years of industry experience) and Mike Faulkner (27 years of experience, group chief investment officer) leverage River and Mercantile's institutional infrastructure, derivatives trading capabilities, and operational support to maintain competitive fee structures and efficient position execution.
- • River and Mercantile's transition into hedge fund management represents a logical extension of its existing capabilities across long-term investment funds, asset management, pensions advice, and fiduciary services, allowing the firm to offer alternative solutions to its client base.
Summary
River and Mercantile Group's entry into hedge fund management culminated with the February 2018 launch of its Global Macro Fund, marking the firm's first dedicated hedge fund offering. The fund manages $2.1 billion in assets within River and Mercantile's macro strategy division, which, despite being the smallest of the group's four investment lines, represents a natural extension of the firm's existing expertise in alternative investment solutions.
The Global Macro Fund operates on a dual framework that positions macroeconomic analysis as the foundational element of all investment decisions while requiring that decision-making integrate both systematic quantitative models and discretionary judgment. Co-portfolio manager Joe Andrews explains this methodology: "For a long time we've built quantitative models to help inform our macro views, and these have fed a discretionary decision-making process. Over the past five years though, we've taken this further. The global macro strategy is systematic – we've made the link between the quantitative models and positioning more explicit." This approach reflects an evolution from informal integration of quantitative insights into a formalized systematic strategy that maintains discretionary oversight.
The fund benefits from significant structural advantages not typically available to startup hedge funds. River and Mercantile's substantial operational infrastructure, derivatives trading team, and group support systems enable the portfolio managers to concentrate exclusively on investment decisions while maintaining cost efficiency. Portfolio management is shared between Andrews, with nine years of industry experience, and Mike Faulkner, group chief investment officer with 27 years in the business, combining deep market knowledge with institutional resources to execute positions efficiently and keep management fees competitive relative to traditional hedge fund structures.
The Global Macro Fund operates on a dual framework that positions macroeconomic analysis as the foundational element of all investment decisions while requiring that decision-making integrate both systematic quantitative models and discretionary judgment. Co-portfolio manager Joe Andrews explains this methodology: "For a long time we've built quantitative models to help inform our macro views, and these have fed a discretionary decision-making process. Over the past five years though, we've taken this further. The global macro strategy is systematic – we've made the link between the quantitative models and positioning more explicit." This approach reflects an evolution from informal integration of quantitative insights into a formalized systematic strategy that maintains discretionary oversight.
The fund benefits from significant structural advantages not typically available to startup hedge funds. River and Mercantile's substantial operational infrastructure, derivatives trading team, and group support systems enable the portfolio managers to concentrate exclusively on investment decisions while maintaining cost efficiency. Portfolio management is shared between Andrews, with nine years of industry experience, and Mike Faulkner, group chief investment officer with 27 years in the business, combining deep market knowledge with institutional resources to execute positions efficiently and keep management fees competitive relative to traditional hedge fund structures.
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