Regional investor overview

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Regional investor overview

  1. 1. Regional Investor Overview
  2. 2. Regional Investor Overview Americas Nuvest CapitalNortheast (New York, Connecticut & Massachusetts)As the center of the financial industry, New York houses thelargest number of institutional hedge fund investors in theworld.The largest percentage of investors are name-brand fund offunds based in New York and the surrounding areas, but thereis also a healthy mix of old and new family offices, pensions,endowments and foundations that each allocate directly lohedge funds. http://www.migcap.com
  3. 3. Regional Investor Overview Americas Nuvest CapitalConnecticut is home to a half dozen established, multi-billion dollar fund of funds, including some of the world`slargest, UBS Alternative Investment Solutions and K2.Most investors, including GEs corporate pension and theCommon Fund, sit in the southern part of the state.Further north, in New Haven and Hartford, there are a fewnotable end-allocators including Yale University’sendowment, the University of Connecticut Foundation, andinsurer Aetna. http://www.migcap.com
  4. 4. Regional Investor Overview Americas Nuvest CapitalBoston is home to several leading endowments (MIT,Harvard, Tufts) and major consultants(NEPC, Meketa andCambridge). On the non-institutional side, Boston alsoincludes a good number of multi—family offices andadvisors.Which together make up the largest group of investors bynumber. There are a few direct allocating pension investorsin the region as well. But we have not seen these groupactive in making new allocations and /or meeting with newmanagers. http://www.migcap.com
  5. 5. Regional Investor Overview Americas Nuvest CapitalAppetite in the region is strongest in the Boston region forEquity L/S and fundamentally based managers. There issome bias toward independent boutique firms as opposedto larger asset managers. Boston investors are also verysophisticated and have been investing in the emergingmarkets for an extensive period of time. http://www.migcap.com
  6. 6. Regional Investor Overview Americas Nuvest CapitalMid-Atlantic (Pennsylvania, Washington D.C. ,Virginia & NC)The bulk of allocators based in Virginia have ties to UVIMCO(University of Virginias endowment) or VRS (VirginiaRetirement System). As a result, these investors display verysimilar investment views and strategy preferences. VAinvestors have a long history of investing in Equity L/S andbiased toward fundamental strategies. http://www.migcap.com
  7. 7. Regional Investor Overview Americas Nuvest CapitalHistorically these investors have approached emergingmarkets through traditional long only or equity L/Smanagers. In addition to UVIMCO, VRS and SpiderManagement (U. of Richmond’s Endowment).There are several outsourced CIOs that manage portfoliosfor smaller endowments, foundations, and pensions,including investures and Cornerstone. The remaininginvestors are a mix of high quality family office investorsand boutique Fund of Funds. http://www.migcap.com
  8. 8. Regional Investor Overview Americas Nuvest CapitalWashington also has a number of smaller endowments andfoundations with direct HF allocations, but with smallerportfolios and are less active in their allocations (BrookingsInstitute Georgetown, George Washington. American RedCross, Smithsonian and Howard Hughes.) Some notablepensions in the area include Lockheed Martin, National Rail,and World Bank Pension, who are all opportunistic and activein alternatives.Washington D.C. is predominately comprised of institutionalend investors, several of which have ties in World BankPension. (KAUST, Strategic Investment Group and RockCreek). http://www.migcap.com
  9. 9. Regional Investor Overview Americas Nuvest CapitalPhiladelphia has a handful of high quality institutional FOFs(Morgan Stanley AIP, Altalus, SEI), several direct institutions(U Penn, Ascension Health, and Haverford) and a largepresence of smaller family offices and wealth advisors. http://www.migcap.com
  10. 10. Regional Investor Overview Americas Nuvest CapitalNorth Carolina has a mix of endowments, outsourced ClOs,and Fund of Funds which all have ties to UNC (University ofNorth Carolina) and Duke.Additional endowment allocators in the area include Davidson,Wake Forest, Global Endowment Management (outsourcedCIO founded by ex Duke CIO) and Morgan Creek (a large FOFestablished by the former UNC team with endowmentinvestors). These investors have exposure to emerging marketsthrough a variety of vehicles, both public and private. http://www.migcap.com
  11. 11. Regional Investor Overview Americas Nuvest CapitalWest Coast (California & Pacific Northwest)The California hedge fund investor network is split betweenthe Northern and Southern parts of the state. The most activestate and local pension plans are in Sacramento: Calipers andSacramento County Employees Retirement Plan. Both planswork closely with their consultants (UBS and Cliffwater,respectively) but also source and conduct investment andoperational due diligence on their own. http://www.migcap.com
  12. 12. Regional Investor Overview Americas Nuvest CapitalThe San Francisco Bay Area plays host to a group ofinstitutional investors, including university endowments suchas Stanford, UC Regents and Berkeley, and other institutionalFOFs. The active foundations and local pensions are TheWilliam & Flora Hewlett Foundation, Gordon E. & Betty I.Moore Foundation and City of San Jose.Palo Alto, located one hour south of San Francisco has a fewsignificant family offices: CM Capital (Cha Family). OakhillInvestments Management (Robert Bass Family) and CapricornManagement LLC (eBay Family) and Meritage (Jim Simons,Renaissance Tech). http://www.migcap.com
  13. 13. Regional Investor Overview Americas Nuvest CapitalSouthern California has the states largest fund of funds inPacific Alternative Asset Management Company (PAAMCO)Local university endowments include; California Institute ofTechnology and the University of Southern California there areother notable family offices/foundations active in alternativesincluding MIG Absolute Return LLC (Paul Mirage Family),Broad Family Office (Eli Broad Family) Hilton Foundation andthe J. Paul Getty Trust. http://www.migcap.com
  14. 14. Regional Investor Overview Americas Nuvest CapitalThe institutional nature of the region, coupled with the need forlarge capacity, creates strong demand for institutionalmanagers with high quality pedigree.The Pacific Northwest is home to several institutional investors,a few endowments/foundations and prominent family offices.A few examples of these investors are Bill & Melinda GatesFoundation, Weyerhaeuser, Vulcan Capital, University ofSeattle to name a few. Traditionally, the PNW has had a benttowards managers in the credit, multi-strat or FI space. Theseinvestors are not big conference goers and gel most of their dealflow through capital introduction or through word of mouth http://www.migcap.com
  15. 15. Regional Investor Overview Americas Nuvest CapitalThe investment community in Seattle is a very tight knit groupand they share ideas frequently with each other through theSeattle Alterative Investment Board. Lastly, we have noted overthe years that this area is very fee sensitive and the investors inthe area do not respond well to products that are highly levered.Several investors from this region have made the trip to Asia orLatin America and are highly interested in Emerging Markets. http://www.migcap.com
  16. 16. Regional Investor Overview Americas Nuvest CapitalThe other area with a higher concentration of alternativeinvestors/consultants in the PNW is Portland, Oregon.Portland is home to investors and consultants like; RV Kuhns.Oregon State Investment Board, CTC Consulting and CommonSense Investment Management. http://www.migcap.com
  17. 17. Regional Investor Overview Americas Nuvest CapitalOregon State Investment Board and many others have startedto go direct to HFs and actually have hired a head ofalternatives to disintermediate their exiting FoF book. Again,these groups dont traditionally see much deal flow.We are one of the few cap intro teams to service this region ona regular basis. The investors in this area tend to like biggerbrand names or new managers with quality pedigree. Therehas not been much discussion from these groups about EM. http://www.migcap.com
  18. 18. Regional Investor Overview Americas Nuvest CapitalMidwest (Chicago, Ohio & Missouri)The Illinois hedge fund investor base is centered in Chicago, andis considered to be among the most experienced allocatorcommunities in the US. The major investor groups areinstitutional fund of funds, followed by foundations,endowments and family offices. http://www.migcap.com
  19. 19. Regional Investor Overview Americas Nuvest CapitalGrosvenor Capital Management, the 5” largest hedge fund offunds manager in the world with approximately $758 in assetsunder management, together with Mesirow Advanced Strategiesand Aurora Investment Management. which run $14 billion and$11 billion, respectively, are major investors in L/S equity, andare particularly focused on pedigreed managers with renewedcapacity. http://www.migcap.com
  20. 20. Regional Investor Overview Americas Nuvest CapitalThere are also several large managed account platforms whichinvest globally across strategies There are several $1- $5 billionFund of Funds in the region as well.Chicago is also home to a number of family offices and major USfoundations that invest in hedge funds, including the Prttzxerand MacArthur Families, as well as the University of Chicagoand Northwestern. http://www.migcap.com
  21. 21. Regional Investor Overview Americas Nuvest CapitalMany of these sophisticated investors continue to look forpedigreed Asian and EM managers. Wisconsin has 3 largeallocators who are active/becoming active in hedge funds inthe State of Wisconsin Investment Board ("SWlB"), theUniversity of Wisconsin Endowment and WisconsinAlumni Research Foundation ("WARF"). http://www.migcap.com
  22. 22. Regional Investor Overview Americas Nuvest CapitalMissouri and Ohio both contain a mix of Public Pensions,Endowments, Foundations and Consultants. Public SchoolRetirement System of Missouri ("MOPERS"),.Missouri State Employees Retirement System ("MOSERS"),Ohio Public Employees Retirement System ("OPERS"), TheOhio State University, and Washington University are some ofthe prominent investors in the region, although some arefurther along the direct investing curve than others. http://www.migcap.com
  23. 23. Regional Investor Overview Americas Nuvest CapitalSoutheast (Texas & Florida)The Texas hedge fund investor community is primarily splitbetween two major cities, Austin and Dallas, with large publicinstitutions located in the state capital (Austin) and prominentfamily offices located in the business capital (Dallas-Ft.Worth).Houston, the states largest city, has fewer hedge fundinvestors. http://www.migcap.com
  24. 24. Regional Investor Overview Americas Nuvest CapitalAustin is home to some of the largest direct public hedge fundallocators in the United States. including four pension fundsTeachers Retirement System of Texas Teachers ("TexasTeachers" or "TRS°’), Texas County and District RetirementSystem (TCDRS), Texas Treasury Safekeeping Trust Company("Texas Trust"). and Employees Retirement System of Texas.(ERS), which announced it would be going direct in 2012. http://www.migcap.com
  25. 25. Regional Investor Overview Americas Nuvest Capitalln addition, the University of Texas Investment ManagementCompany ("UTIMCO"), the largest public universityendowment in the US, allocates directly to hedge funds. (TexasPermanent School Fund, which is often described as asovereign wealth fund. allocates through fund ol funds, but iscurrent reconsidering that policy.) http://www.migcap.com
  26. 26. Regional Investor Overview Americas Nuvest CapitalWhile all of these institutions have relationships with pensionfund consultants. most have staff equipped to handle managersourcing and investment due diligence directly. All of theseinvestors invest solely in the institutional quality, pedigreedmanagers and their portfolios have global exposure in bothequities and credit.(The same can be said for the major private hedge fundinvestor in Austin, Perella Weinberg, which runs a fund offunds business that incorporates an outsourced CIO platform.) http://www.migcap.com
  27. 27. Regional Investor Overview Americas Nuvest CapitalDallas, on the other hand, is populated with smaller, privatefamily offices that have been long-time hedge fundinvestors. As many of these FOs are familiar to each other,managers can leverage this community by meeting with thenotable groups and Benefitting from word-of-mouth.The Dallas FO community includes various firms tied tomultigenerational dynasties, such as Crow, Hunt and Bass(in Ft. Worth). http://www.migcap.com
  28. 28. Regional Investor Overview Americas Nuvest CapitalThey have historically invested in pedigreed L/S equity andcredit managers, but also have an appetite for high profilelaunches. Dallas is also home to AT&Ts pension fund, oneof the largest corporate pensions in the world and a directhedge fund allocator. http://www.migcap.com
  29. 29. Regional Investor Overview Americas Nuvest CapitalThe nearby Ft. Worth community includes Crestline, theBass-founded institutional fund of funds, as well as threeinstitutions that directly allocate to hedge funds, CookChildrens Health Care System. Employee Retirement Fundof the City of Ft. Worth and the endowment of TexasChristian University ("TCU"). http://www.migcap.com
  30. 30. Regional Investor Overview Americas Nuvest CapitalHouston’s investor base is primarily high-net worth that investvia small multi-family offices. The hedge fund investorcommunity is significantly smaller in number than Austin andDallas.There are two major private players: fund of funds SalientPartners and Covariance Capital, an outsourced CIO seeded byTIAA-CREF. The endowment of the University of HoustonSystem, a public university, also invests directly. http://www.migcap.com
  31. 31. Regional Investor Overview Americas Nuvest CapitalIt should be noted that Texas has several private collegeendowments that invest directly in hedge funds, and they aregenerally accessible through their consultants. In addition toTCU in Ft. Worth, the list includes Southern MethodistUniversity(in Dallas), Rice University (in Houston) and BaylorUniversity (in Lubbock). http://www.migcap.com
  32. 32. Regional Investor Overview Americas Nuvest CapitalThe Florida Investment community is split between theNorthern institutions (Alfred l. DuPont Trust, Florida StateBoard and (UFICO) and the Southern Florida Family OfficeCommunity. Pre 2008 there was more investors in Florida,but many were hurt by Madoff exposure.Currently the larger investors in Southern Florida areGenspring, CV Advisors, Forrestal, Gamma and Collins.Most of these investors will look across strategies, but tendto make smaller initial investments. http://www.migcap.com
  33. 33. Regional Investor Overview Americas Nuvest CapitalCanadaThe Canadian investor landscape is primarily split between twocities. Montreal and Toronto, with a handful of investorscoated in other cities like Ottawa, Bedford. Quebec, Vancouverand Sainte-Foy. We believe out of 30435 allocators in Canadaonly 26 currently have money to put to work. http://www.migcap.com
  34. 34. Regional Investor Overview Americas Nuvest CapitalThere is a heavy concentration of pension plans andendowments in Canada. While most of the investor groupshave in-house teams, they also utilize outside consultants(notable names being Albourne and Mercer/Hammond).Overall, Canadian investors tend to be highly "sticky," thoughthey tend to be slower to make investment decisions (13months or more).Active institutional allocators in the region include: OntarioMunicipal Employees Retirement System, Ontario Teachers,CPPIB, University of Toronto, CN Rail Caisse de Depot,Canadian Pension Plan, BIMCOR and McGill University. http://www.migcap.com
  35. 35. Regional Investor Overview Americas Nuvest CapitalInvestors in Canada have a strong focus on absolute returnsrather than relative returns and most are still restructuringportfolios post the crisis of 08. Some groups who were heavilyinvested in FoFs are now in the process investing directly withmanagers, increasing the demand for product in the region.Canadian investors generally invest in funds where they believethat the organization is strong overall, with particularemphasis placed on infrastructure and risk managementsystems. http://www.migcap.com
  36. 36. Regional Investor Overview Americas Nuvest CapitalCanadian investors are also extremely focused on creatingpartnerships and tend to like founders share classes. ln regardto strategy, Canadian investors are interested in Fi RV. Credit,Multi-strat and Emerging Market names.Unlike many other regions in North America, institutionalinvestors in this region will look at and invest in day onemanagers http://www.migcap.com
  37. 37. Regional Investor Overview Americas Nuvest CapitalBrazilThe Brazilian investor landscape is predominately splitbetween Rio de Janeiro and Sao Paulo. Sao Paulo tends tohouse more "institutional" type investors such as FoFs,Consultants and Advisors, Private Banks and to a lesserextent, family offices.Rio de Janeiro has a much higher concentration of familyoffices, ultra high net worths and a handful of FOFs. inour estimation, Brazilian investors make up $1.1 trillion inassets overall. http://www.migcap.com
  38. 38. Regional Investor Overview Americas Nuvest CapitalHistorically, Brazil was a difficult place to extract capitaldue to the fact that the country‘s base-rate of return (LD!Rate) had been as high as l5%, making it a fairly closed offeconomy. Interest rates crowded out the market and mademoney market funds very popular providing a high risk·freerate of return.Five years ago Brazil started investing in equities and todaymany investors in the region are exceptionally bullish onfinding high-quality "stock-pickers" in the form of LSequity to generate consistent alpha going forward. http://www.migcap.com
  39. 39. Regional Investor Overview Americas Nuvest CapitalMost CIOs we work with have a clear idea of their assetallocation models and focused on reducing their traditionalconcentration to federal securities and diversifying away fromfixed income toward equity investments Many haveapproached US .based managers (as opposed to EU/Asiamanagers) for ease of due diligence and monitoring.Under the Brazilian regulatory regime, allocators (notmanagers) bear responsibility for the clients investment Therisk appetite is, therefore, low for non "vanilla" product. http://www.migcap.com
  40. 40. Regional Investor Overview Americas Nuvest CapitalThese allocators also require a direct line to the portfoliomanager and lack of access is usually a non-starter forBrazilian investors. Because they require access to the PM at alltimes, large conglomerates with multiple layers ofmanagement are generally not of interest.Many South American pension plans have a hard time seeingreal value in offshore hedge funds, preferring long terminflation-linked bonds, with a smaller percentage (<10%)dedicated to hedge funds and private equity. http://www.migcap.com
  41. 41. Regional Investor Overview Americas Nuvest CapitalThese plans are conservative by nature and many simplycannot manage the risk. Several plans we work with have hador have some existing hedge fund exposure locally. Others planon introducing hedge funds as an asset class for the statepension products only and not for their private pensionreserves due to the perceived risk profile of these investments.While most plans do not see a major need for additional hedgefund exposure currently, they believe it can be a way todiversify risk in the future and mitigate currency risk. http://www.migcap.com
  42. 42. Regional Investor Overview Americas Nuvest CapitalThe investors in this region traditionally lean towards GlobalMacro products or Equity L/S. They are not big buyers ofcredit, Fl or commodities (they get this locally). They do nothave an interest in more emerging market exposure —- otherthan some select Asia names and we find that these investorsare looking to diversify away from more EM exposure. http://www.migcap.com
  43. 43. Regional Investor Overview Americas Nuvest CapitalMany investors in the region tell us that the hurdle to"m0nitol" these investments becomes too cumbersome —therefore, the US is an easy place to invest since many ofthe investors in the region travel to the US several times ayear. http://www.migcap.com
  44. 44. Thank YouThanks for viewing our Regional InvestorOverview . We hope it will be of help to you! http://www.migcap.com

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