CEO blog: September 2019 notes

By Jack Inglis, CEO

Published: 30 September 2019

Summer came to an end and we embarked on a busy September with initiatives for both managers and investors. In collaboration with AIMA Sponsoring Partner RSM we published our In Harmony paper. This showed how deeper partnerships and innovation around fee models can create a closer alignment of interests between investors and hedge fund managers. AIMA’s Research Committee and representatives of our Global Investor Steering Committee provided valuable discussion of the findings to help IR and marketing teams understand what mutually aligned partnerships should look like.

I learned even more from investors when I was in Sydney this month for AIMA’s Annual Australia Investor Forum. This was attended by many of the domestic superannuation pension schemes as well as local and overseas managers among the 450 strong audience. Allocators are cautious on equity markets and dissuaded by negative yielding bond markets, so alternatives must play a part.  I enjoyed particularly the onstage conversation between the CIO of the Australian Catholic Super, Michael Block and Bill Bohnsack, President of Oak Hill Advisors which confirmed the interest in private markets in preference to traditional bonds and equities. In public markets it was fascinating to hear from David Harding as he transitions Winton to a multi-strategy firm and reduces over-reliance on trend following.

We’ve got more lined up in investor/manager engagement in the coming month. We have our AIMA Canada Investor Forum in Toronto with a strong number of North American investors due to attend. Guest speakers include Eileen Murray, Co-CEO of Bridgewater Associates, and Jonathan Hausman, Head of Global Strategic Relationships at Ontario Teachers’ Pension Plan. Also, in London this October we host AIMA’s Spotlight on Raising Assets where we will hear good insights from managers and investors about the capital raising and retention process. Both these events are still open for registration.

I polled AIMA’s global governing board for their views on our key considerations ahead of our September strategy meeting.  It was clear from the results that the pervading themes of ESG investing and Diversity and Inclusion have become important to their firms. AIMA has been doing much on both: our Responsible Investment Primer, published in May, and our forthcoming practical guidance on Diversity and Inclusion represent significant milestones in framing these discussions and making changes in important topics for our industry.

Regulatory modifications are rarely out of sight and our attention is firmly on the review of the existing AIFMD regime where we await the EU commissioner’s action plan. Our sources suggest that the review will focus on three key areas: Remuneration, Liquidity & Leverage and Third Country issues. We don’t want to see a re-opening the Level 1 legislation, which is the overarching legal framework, so we are encouraging member states to focus on the specific detail included in Level 2 and maintain stability in the directive much as it appears now.

It was last October that stock markets fell into a tailspin. Equity and bond markets have been good through most of this year. Let’s hope we don’t get a repeat but the political situations in the US, UK and HK/China mean anything could happen….

I’ll report back next month.