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Baillie Gifford, AKO, Fundsmith
Is Fundsmith a HF? I thought it's concentrated LO. Do they also have a HF?
They've ran me over on a couple shorts in my career. I didn't know WTF was going on until a couple months later and learned FS had added $1bn position.
Ah, not sure. This person asked for quality long only, so I thought to put down any fund I follow.
One fact to add is that Fundsmith was only founded in 2011 and they haven’t gone through a full blown cycle.
Fair, but hard to see what Terry owns suffer a 80% drawdown, especially when the eps of his companies keep compounding.
Would definitely add Lansdowne Partners, recently transitioned to LO. Would say the top blue chip hedge funds in London are Lansdowne, TCI, Egerton and AKO. A couple of other great funds have spun off from there including Pelham, Gladstone and a few others. There are a couple of Elliott spin-offs too, but those are newer funds (i.e. Sparta/Palliser).
There are plenty of L/S funds - they just tend to be stickier and do not churn through associates like the pods or some of the larger US funds driving fewer hiring openings. A lot of it is also done through networking rather than headhunters.
I think you have to rememeber what a hedge fund actually is - it is a fee structure that typically allows for greater than 100% gross exposure and has a performance element. AKO and Egerton both run substantial long only products given their capacity constraints on the short side - I know for definite that the LO portion of assets at one of those funds is greater than the long-short portion. The same is true of many of the large US HF who also have LO products.
One other thing to consider about Europe is that it is a smaller equity market (by market cap and number of companies) so running a large (think $2bn gross on each side) hedge fund is actually quite difficult without constraining yourself on liquidity and disclosure, especially on the short-side of your book. There are many funds operating in the $750m to $5bn AUM space in London doing quite nicely and flying under the radar. There are also many big l/s funds within the big asset managers paying comp packages that are more than comparable to HF - think Blackrock, Henderson etc. Blackrock probably runs one of the largest L/S strategies in Europe when you add together their UK and EU L/S products - you just don't see them talked about that much in the HF bracket given the team is nicely hidden within a megacap organisation.
Would you mind to name a few of the smaller HF that are performing good and are most of the times overlooked? THX!
Bump
Interesting, unusual for us in the US. What do the large asset managers pay PMs in the LS equity strategies? How much capital do managers run?
There are not many that are outperforming this year. Many are down double digit.
I'd check the HSBC weekly HF report (Google may help you here for an old version), short disclosures in Europe for fund names and then cross reference with Form ADV/Companies House for AuM/P&L if in the UK.
If you want to be an investment analyst....learning advanced Google skills is a good place to start.
Just out of curiosity, do prime brokers have the same liquidity on the short side in Europe as they do in the US? I'm thinking about picking up coverage of some European names and trying to figure out if it's worth the trouble of waking up at 3am for earnings reports.
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