Investment

Chart of the month: May Edition

by Sébastien Poiret

WHY IS ACTIVE MANAGEMENT UNDERPERFORMING THIS YEAR?

2016 has so far been a difficult year for active managers (long only stock-pickers and hedge fund long/short equity managers).

Source: Bloomberg

If we take the US equity markets as the main proxy we see that the MSCI USA Index is up just +1.3% for the year. It does not really reflect the reality of what happened at the sector level.

The difference between the best performing sector (Telecoms & Utilities +11.1%) and the worst performing sector (Information Technology -3.9%) is 15.0% as of today.

At the bottom of the markets on February 10th, while the MSCI USA index was down 11.0%, the difference between Telecoms & Utilities and Financials was 22.0%, only 6 weeks into the year!

The biases for a large number of active managers was to be long Information Technology, Healthcare and Consumer Discretionary where there was and still is good growth (both top line and profit) and to be underweight or short (for hedge funds) Telecom & Utilities, Energy & Material and Industrials (mostly as Oil collapsed from over $100 to as low as $26).

So that fact that equity markets sold off sharply in a short period of time (where managers had to risk-manage their books by often reducing exposures) coupled with this large sector rotation have been detrimental to performance. Concerns about global growth, the sharp up-reversals of Oil and Gold and the crowdedness of some stocks and sectors have been the main reasons for these moves.

Equity market volatility has recently decreased and global equity markets have recovered. We think that fundamentals are slowly taking over and that rationality is coming back which should benefit active management.

Difficult to call a bottom in such a complex sector which is exposed to political risk, but there are some reasons to believe that there is an attractive asymmetrical risk profile for buyers in the biotech sector, one of the few growth sectors in the current macroeconomic environment.

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Antonio Mira
CHIEF FINANCIAL OFFICER, MEMBER OF THE EXECUTIVE COMMITTEE

Antonio Mira joined NS Partners in 2006 as Group Chief Financial Officer. He heads the corporate functions and is involved in coordinating and implementing the decisions of the Executive Committee.
An experienced bank auditor, Antonio started his career in 1995 with Arthur Andersen, where he worked for some 7 years before joining Ernst & Young in 2002 as a Senior Manager.
Antonio is a Swiss chartered accountant and a Business graduate of Lausanne University (HEC).

Sébastien Poiret
DEPUTY HEAD OF WEALTH MANAGEMENT

Sébastien Poiret joined NS Partners in 2008 and manages funds of hedge funds and private client mandates. He also oversees the development of the Group’s offices in Mauritius.

Prior to joining NS Partners, he served as a Trader, Head of Manager research and Portfolio Manager in the USA and Switzerland for a single hedge fund (1998-2004) and for Optimal (2004-2008), Grupo Santander’s fund-of-hedge funds operations.

Sébastien holds a Bachelor’s degree in Corporate Finance from the ESPEME Business School (EDHEC Group) and an MBA in Finance and Economics from the Institute of Business Administration, both in Nice.

Abir Oreibi
BOARD DIRECTOR

Abir Oreibi joined the Board of the NS Partners Group in 2018, where she brings her truly international perspective and rich experience.
Among many other ventures, Abir set up Alibaba.com’s first European office. After living and working in Shanghai, Hong Kong, Bangkok and London, she now lives in Geneva, where she is CEO of Lift Events, an organization that identifies technology trends, their business and social impact through the organization of events and open innovation programs. Issues related to the challenges and opportunities created by new technologies as well as the strategic responses from organizations are at the heart of Lift’s activities.
Abir holds a BA in Political Sciences from the University of Geneva. She is an investor, and member of advisory and innovation boards.

Romain Pidoux, CAIA

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Romain Pidoux joined NS Partners in 2011 and heads the Group’s Risk Management.
He started his financial career in 2005 as Head of Quantitative Analysis for a Swiss Family Office, selecting funds and managing portfolio allocation. In 2008, he switched to the alternative world and joined Peak Partners as hedge funds analyst.
He is a Chartered Alternative Investment Analyst (CAIA) and holds a Master’s degree in international relations from the Graduate Institute of International Studies at Geneva University.

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