Edgefolio Newsletter – October

A lot of exciting things are taking place at Edgefolio!

We are pleased to present a comprehensive list of new features and updates that have been made this month. Below is a taste of the most exciting features.

We then present market insight from our newest research, as well as insight from our founder and our CEO. We round the newsletter off, as we always do, with some Hedge Fund news from the world.

We hope you enjoy this concise read of what’s been going on at Edgefolio this month.

New features to Edgefolio:

New investor-facing feature – Investment Exposure:

For the past few months, we have been wondering:

“Is there a better way of understanding a manager’s investment behaviour, and thinking?”

Answer: Yes – we believe there is.

This month we have introduced the Exposures and Holdings section of the fund profile that makes it even richer.

Animated GIF - Find & Share on GIPHY

Read the full press release on the new feature here.

Market funds with no track record:

We now allow portal owners to hide both Fund analysis and Peers tabs.

New Investor Tags:

Portal Owners can now assign any Tags to Users, and search and filter by these tags in the Users table.

Rearrange Funds:

The new feature allows to change and save the order in which Funds are listed in a FundPortal.

New Updates:

Better integration with your workflow

We understand marketing your fund is hard, so we’ve been steadily improving FundPortal to make things easier. For this batch of updates, we’ve been paying particular attention to streamline how FundPortal integrates with your existing workflows.

You can read the whole list of improvements and bug fixes here.

‘Making it Big’ Report

Charting the evolution of the billion-dollar hedge fund.

Made in collaboration with GPP and AIMA, the report provides insights from larger managers who have blazed a trail in building a billion-dollar hedge fund business. The research examines their path to growth, providing a roadmap for all emerging and start-up managers as they make their way to $1 Billion AUM.

Read our blog post about the survey here.

Rowen Pillay AlphaWeek Interview:

Our CEO, Rowen Pillay discussed with AlphaWeek about the current state of the hedge fund industry’s use of technology in the capital raising space.

Communications, processes, and insights from investor’s point of view are the basis of the discussion.

“Today’s tools allow allocators to analyse how a manager performs against other similar managers, as well as other available products on the market. Being able to roll this manager in and out of the asset allocator’s portfolio, quickly run backtests, and portfolio simulations to understand the potential impact from a risk and return perspective is what is rapidly accelerating the adoption of technology.

Technology and the solutions today also enable connectivity, so gone are the days of clunky desktop software. By moving to cloud-based solutions, you are able to get real-time data updates, and most importantly connectivity to other stakeholders in the industry. It’s an exciting time to be a player in this space!”

You can read the full interview here.

Information vs. Wisdom – Insight from our founder, Leo Gasteen.

Are you looking in the right places when assessing a fund manager?

“I would argue that the analysis of historical information and data is merely the foundation on top of which the assessment is built, not the assessment itself. It shows you what was produced, but not necessarily how, nor why.

It is akin to seeing a wonderful dish on your favorite chef’s Instagram feed, without actually seeing the recipe, thought process and iterations. In some cases, when revealed the recipe and thought process might be enough to put you off what looks like a fantastic dish. In some cases, the dish was arrived at by pure luck, void of any thought process or recipe.

To assess what the fund manager has produced, we must be prepared to dive into the ‘how’ and ‘why’. Otherwise, we may be fooled into eating a beautiful looking dish that leaves you with a sour aftertaste.

To tap into the ‘how’ and ‘why’ behind the performance, we need to break through into the manager’s knowledge, understanding and wisdom. Leo argues the manager’s exposure data will give you the best and deepest understanding available.”

Read the full article here.

Stories from the Internet:

(Click title to view full article.) 

Active vs. Passive Fund Management in Europe

5 takeaways from the first European Active/Passive Barometer

The European Morningstar Active/Passive Barometer is a semiannual report that measures the performance of active versus passively managed funds within their respective Morningstar Categories. The barometer is unique in the way it measures active managers’ success relative to the actual, net-of-fee performance of passive funds rather than an index which isn’t investable.

5 takeaways about active vs. passive fund management from our report
  1.  European stock-pickers’ long-term success rates are low. A majority of active managers both survived and outperformed their passive average peer in just two of the 49 categories we examined over the decade through June 2018.
  2. Over the 10 years through June 2018, active managers’ success rate was less than 25% in more than half of the categories surveyed. This includes core-holding categories.
  3. Survivorship rates are positively correlated with odds for success. The biggest driver of active funds’ failure is their inability to survive, which is often a result of lacklustre performance.
  4. Comparing mortality rates between active vs. passive fund management shows that the latter has the better odds of survival over the long term. The contrast is starker over longer look-back periods.
  5. Active fixed-income managers’ success rates have also been low. Over the past decade, less than a fourth have managed to both live and outsmart their average passive peer in 10 of the 12 categories we studied.

Hedge Funds Officially Welcomed in From the Shadows

Hedge funds and other alternative investments will no longer be dubbed “shadow banks”, by global regulators, lifting a pejorative label which has stuck to the $45 trillion sector since the financial crisis.

Treated with suspicion by regulators and policymakers, “shadow banks” have in recent years been welcomed as providing market-based capital to plug gaps left by retreating banks.

The Financial Stability Board, which coordinates financial rules for the Group of 20 Economies (G20) is replacing the term with “non-bank financial intermediation” in all its work.

“The new terminology emphasises the forward-looking aspects of the FSB’s work to enhance the resilience of non-bank financial intermediation,” the FSB, which is chaired by Bank of England Governor Mark Carney, said in a statement on Monday 22nd October.

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