Last month, in our “What You Need to Know Right Now… How Hedge Fund are Evolving” webinar, Bower’s CEO, Georgina Bale, hosted 3 leaders from London’s hedge fund community:
- Carrie Whamond, Founding Partner at Alternit One, specialising in IT support and infrastructure to hedge funds
- Linda Voggenreiter, Head of People at Builders Union, an emerging independent investment manager that focuses on the global consumer sector and millennial trends
- Malcolm Butler, COO at Selwood Asset Management, an alternative credit investment manager
While England’s officially entered a recession and markets are volatile, virtual communication tools, new remote work flexibility and access to new investors are just a few of the positive outcomes due to COVID. You can watch the entire conversation here, and we break down the top 8 highlights below from ‘What You Need To Know Right Now… How Hedge Funds are Evolving’:
1. Forced adoption of technology means that communications technologies are now embedded in the hedge fund process.
“The single biggest impact of forced remote working is forced technology adoption. People have proven that they can work productively and in some cases, outperform. This is here to stay,” said Carrie of Alternit One. “Slack and Microsoft Teams are now embedded in the process. They are now a fundamental part of the organisation that wouldn’t have evolved so rapidly without COVID.”
2. Now is not the time to launch a new hedge fund.
We’re currently seeing the lowest activity in new fund launches since 2012. Linda noted that, “Whilst investors are starting to come back into the market, it is a tough time for asset raising. People are still cautious and will allocate and turn to funds they know and trust, building on the relationships already in place.”
3. Virtual events make way for new global investment relationships.
Goldman Sachs, amongst others, are paving the way for untapped investment opportunities, having moved their traditionally in person conferences virtual since Spring. Money managers are now hosting virtual roundtable sessions that investors can join. Due to various travel and geography restrictions, these two parties would never have met otherwise.
4. The old-fashioned boys club is evolving, thanks to millennials and women.
Malcolm’s seen his firm’s culture transform in recent years. “We knew we needed to increase both cultural and gender diversity as compared to when we first launched our fund. After our first year or so, the next 5 hires were all women, making up 6 out of 17 employees. It’s completely changed the balance and made our structure flat, based on competency.”
5. Senior women at hedge funds drive strong results: more diverse workforce + productivity = cultural and financial gains.
Georgina frequently finds that, “Women leaders are more open to working with providers, like Bower. They see service providers as a brand amplifier. Bower talks to hundreds of candidates and we are a brand ambassador. Women going in as junior or an EA with senior men can be daunting. Having strong female leadership changes that dynamic.”
6. While digital interviews are great, you still want to walk in the park with a candidate.
You no longer have to have a meeting at 10pm to accommodate an associate’s grueling schedule. Virtual working allows funds to meet more diverse talent. That said, while digital interviewing and on-boarding has many benefits, it’s hard to make a decision digitally for a long-term candidate and partner. As Malcolm said, “You still want to have a walk in (Regent’s) park, for a cultural fit before hiring them. Human contact can’t be replaced.”
7. Sustainability investing at hedge funds is a core part of the millennial mindset.
Millennials, in particular, want to create change and in turn, invest in companies and funds that make the world a better place: socially responsible investing. For example, Builders Union investments are tied to the generational (millennial) shift. They are part of the United Nations Principles for Responsible Investing (‘UNPRI’), which speaks to priorities of today’s investors.
8. What investment strategies are most at risk? Credit and short-term money positions.
It’s widely understood that debt markets will remain strong as governments are running up tremendous debt to cope with our current economic situation. What’s interesting is that, during economic downturns like this, you’ll see talent (and money) flow from Private Equity to Hedge Funds. PE firms are working to keep their companies alive right now. It’s a tough position.