From the page on the OpalesqueTV youtube channel. This is video from 2010, but I thought it still carries relevance and long-term logic:
Opalesque’s first CAMPUS series features Melvyn Teo, Associate Professor of Finance at Singapore Management University. Teo is also Director of the BNP Paribas Hedge Fund Centre at the Singapore Management University.
In this Opalesque CAMPUS, Teo shares his findings that hedge funds charging lower than average performance fees tend to have a higher liquidity risk, which will translate into problems for investors, when they try to pull money out of the fund. One example of such a problem is the “return impact” of redemptions, when the return of the fund tends to fall in the next month.
Teo also gives specific recommendations what investors can do to better understand the liquidity risk a fund may carry.
I will post from time to time some videos by the Opalesque TV. These are excellent videos about the Asset & Fund Management industry; informative, instructive and insightful interviews with the leading and emerging managers and companies operating in the field.
Kaizen Asset Management runs a South African multi-strategy fund, investing in a diversified portfolio of securities, commodities, derivatives, gilts and cash. The core focus is long-short equities, with alternative assets classes used predominantly for hedging of risk and / or speculation.
Mark Witten, a CFA charterholder with an MBA and a BComm (Honours) cum laude, is Managing Director of Kaizen. In this Opalesque.TV BACKSTAGE video he explains the factors that are behind his fund’s strong outperformance of the benchmark : 214% net return since fund launch in July 2010 versus a gross gain of 93% of the JSE Top 40 Index. A “multi-modal” concentrated approach on top 20 ideas, together with specific portfolio and risk management frameworks, make Kaizen very unique. The fund uses three buckets – fundamental, trading & opportunities – and also develops “mini portfolios”. Hear Witten speak about:
– Idiosyncratic drivers of the South African Markets
– Macro as the first level of risk: Effective hedging with derivatives
– 2nd level of risk: Why it’s important to get the sectors right
– What should managers do in a market sell-off?
– What Mark Witten learned being a chef in his family’s restaurants
– Why a strong team needs debates more than a “yes”-culture
– Why South Africa’s drift to the left could be a boon for investors
– Outlook and macro themes: make sure to make good money on the short side
Mark O. Witten is a CFA charterholder with an MBA and a BComm (Honours) cum laude, in Law and Finance. He started my career at RMB Asset Management in 2000 before joining Goldman Sachs Asset Management in London. Witten also completed a masters credit at London School of Economics before backpacking through the USA, Fiji and Australia. After completing an MBA at UCT’s GSB, he moved to Johannesburg and joined Peregrine Capital as an analyst, covering the construction, energy and infrastructure sectors. He then re moving to Praesidium Capital in 2008 as a Fund Manager. Prior to setting up Kaizen, he spent a year with ex-Peregrine Capital director Shane Watkins in 2009 assisting him to set up Silk Road Fund Managers in Cape Town.