Key Takeaways
- • Arini Capital, the hedge fund founded by Hamza Lemssouguer, took on eight floors of space in Mayfair, formerly occupied by Apollo, shortly before a credit sell-off hit several of its largest positions.
- • Arini's total drawdown this year has reached 26%, against a history of returns generally between 10% and 25% per year, according to the FT.
- • Lemssouguer still had $1.5bn of commitments at the start of last month after re-opening a closed strategy, so the fund retains capital-raising capacity despite the losses.
- • Deutsche Bank's 2023 purchase of Numis for £410m ($550m at the time) has not yet delivered the expected IPO-driven recovery, with only five UK IPOs so far this year.
- • Sequoia is closing its London office and refocusing on Silicon Valley, arguing it can serve European startups from San Francisco.
Summary
A little-used "HQ Factor" holds that companies moving into flashy new headquarters may be signaling hubris, overextension, or mean reversion after a period of outperformance. The Financial Times' recent coverage of Arini Capital, as relayed by eFinancialCareers, is presented as a case in point.
Hamza Lemssouguer, who generated 5% of Credit Suisse's fixed income trading revenues on his own at age 29 before founding Arini, has built a record of returns generally between 10% and 25% per year, with previous drawdowns in the high single digits to mid-teens. With support from a large base of Gulf investors, the firm leased eight floors in Mayfair, near Hanover Square, formerly occupied by Apollo. Shortly after signing the lease, Arini was caught in a credit sell-off that hit several major positions, including debt of Aston Martin, Merlin Entertainments and Very Group. According to the FT, the year's total drawdown has reached 26%, and news of the losses has spread through the market, with other traders reportedly shorting Arini's holdings in expectation of forced liquidation.
The article notes the HQ Factor is not infallible. Goldman Sachs' move to 200 West Street in November 2009 was followed by continued strong performance, and JPMorgan's Park Avenue headquarters, which rose from an estimated $3bn to $6bn, appears to have caused no difficulty. Arini nonetheless retains fundraising ability, with $1.5bn of commitments at the start of last month when it re-opened a closed strategy.
The piece also covers Deutsche Bank's Numis acquisition. Deutsche bought the UK brokerage in 2023 for £410m ($550m at the time), expecting a recovery in London IPO volumes that has not materialized. Ross Mitchinson, chief executive of Deutsche Numis, described the last few years as "a challenging period for UK capital markets." Numis has earned M&A fees, but only five IPOs have been completed so far this year. Bloomberg reported some cultural friction, with Numis bankers in "shirts and chinos" versus Deutsche's suits, though turnover, including departures of Alex Ham and Stuart Ord, is not notably above domestic peers.
Other items in the same briefing include Mark Tweedie, formerly head of EMEA fintech coverage at Citi, joining KBW as head of European investment banking (Financial News); the completion of Credit Suisse's integration into UBS with a final 200 London roles cut, some of which may be redeployed elsewhere in UBS (Bloomberg); Sequoia closing its London office and scrapping Monday meetings; and Hudson River Trading trading "up or down" financial and commodities markets on Kalshi, without sports or election contracts (Bloomberg).
Hamza Lemssouguer, who generated 5% of Credit Suisse's fixed income trading revenues on his own at age 29 before founding Arini, has built a record of returns generally between 10% and 25% per year, with previous drawdowns in the high single digits to mid-teens. With support from a large base of Gulf investors, the firm leased eight floors in Mayfair, near Hanover Square, formerly occupied by Apollo. Shortly after signing the lease, Arini was caught in a credit sell-off that hit several major positions, including debt of Aston Martin, Merlin Entertainments and Very Group. According to the FT, the year's total drawdown has reached 26%, and news of the losses has spread through the market, with other traders reportedly shorting Arini's holdings in expectation of forced liquidation.
The article notes the HQ Factor is not infallible. Goldman Sachs' move to 200 West Street in November 2009 was followed by continued strong performance, and JPMorgan's Park Avenue headquarters, which rose from an estimated $3bn to $6bn, appears to have caused no difficulty. Arini nonetheless retains fundraising ability, with $1.5bn of commitments at the start of last month when it re-opened a closed strategy.
The piece also covers Deutsche Bank's Numis acquisition. Deutsche bought the UK brokerage in 2023 for £410m ($550m at the time), expecting a recovery in London IPO volumes that has not materialized. Ross Mitchinson, chief executive of Deutsche Numis, described the last few years as "a challenging period for UK capital markets." Numis has earned M&A fees, but only five IPOs have been completed so far this year. Bloomberg reported some cultural friction, with Numis bankers in "shirts and chinos" versus Deutsche's suits, though turnover, including departures of Alex Ham and Stuart Ord, is not notably above domestic peers.
Other items in the same briefing include Mark Tweedie, formerly head of EMEA fintech coverage at Citi, joining KBW as head of European investment banking (Financial News); the completion of Credit Suisse's integration into UBS with a final 200 London roles cut, some of which may be redeployed elsewhere in UBS (Bloomberg); Sequoia closing its London office and scrapping Monday meetings; and Hudson River Trading trading "up or down" financial and commodities markets on Kalshi, without sports or election contracts (Bloomberg).
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