Signia manages investment portfolios for individuals, family trusts and institutions. The firm has three main offerings; a multi-asset portfolio service, the alternatives business and private capital.
CEO Carnegie Smyth (pictured) explains that the private capital offering is not just about assets but also knowledge. “It’s about bringing individuals together and getting people to network as the true value entrepreneurs create is when they do business together.”
This makes sense given the firm’s client base: the successful entrepreneur, single family offices and increasingly institutional clients; drawn to Rosenthal’s hedge fund skills.
There is a clear focus on what the firm aims to achieve. “The goal is to tailor our services to the needs of each client. We offer something different from our competitors. Unless you have the right talent in-house, you can’t offer a world class service.”
The in-house talent behind the Alternatives offering is headed up by Michael Rosenthal, Head of Hedge Fund Investment. The Alternatives strategy at Signia is a continuation of the strategy Rosenthal ran for institutional clients from 2002-2013 as CIO of Amundi.
Rosenthal says: “Our hedge fund portfolios are invested across the full range of hedge fund strategies from directional strategies such as Global Macro and Event Driven to non-directional such as Relative Value and Market Neutral strategies.
“My job is to invest in the most attractive strategies from a risk reward perspective at each point in the market cycle. And secondly to be picking the optimal alpha opportunities within each hedge fund strategy wherever these may be.”
This is a tough task. As Rosenthal points out, a UK large cap stock-picker has a universe of 100 stocks from which to invest; there are 15,000 hedge funds globally across 40 strategies and no two do the same thing, so managing money in this asset class is a constant challenge; as he succinctly puts it “part art, part scienceº”
Rosenthal builds his portfolios with an obsessive focus on uncorrelated alpha: “I want my portfolio to be making money for clients each and every month but I target zero correlation across my positions and with general equity and credit markets.” He terms it “independent, uncorrelated pods of alpha”.
Signia’s hedge fund portfolio has done an excellent job of generating consistent positive performance whilst avoiding drawdowns and capital loss. The hedge fund portfolio has had no negative months over the last year, and has seen very strong three year outperformance against indices.
Looking forward, Rosenthal is very positive on Macro strategies and on Event Driven with a focus on Merger Arbitrage. He says Macro trading is more interesting than it has been in several years “as the major economies stop moving as one and as Central Bank policies diverge in a post QE world.”
He likes Merger Arbitrage across Europe and the US “because corporates have a done a stellar job of reconstructing their balance sheets and have inflated stock equity to use for acquisition in what is a tough environment for organic growth.”
He also mentions cheap currencies as a contributing factor “ARM’s takeover by Softbank was at a 40 per cent premium but in Yen terms Softbank only paid a 9 per cent premium compared to fourteen days earlier.”