Observations/Commentary

Summer Intern Speaker Series in NY and Chicago
John Lothian News is hosting its third annual MarketsWiki Education 2015 Chicago and New York World of Opportunity Summer Intern Education Series – in New York on July 15 and in Chicago August 4, 5 and 7.

The series will feature speakers from around the financial industry who will present short 10 to 15 minute talks that cover the entire scope of our markets, from exchanges to trading firms, indexes, regulation and technology. Interns and new employees will get personal stories as well as valuable information about trends in the markets and what it takes to succeed in this industry.

In short, this is a great opportunity to introduce young talent to the financial space, give them some ideas on how and where they can get started, and help expand our industry in the years to come.

This year, we are introducing a one-day, two session event on July 15, hosted at the New York Stock Exchange at 1 p.m. and 3:30 p.m. Each session is 90 minutes.

In Chicago, the events will be held August 4th and 5th at Stuart School of Business at Illinois Institute of Technology, 565 West Adams. On August 7th at Trading Technologies, 222 South Riverside Plaza, with a social event afterward at the TT Tech Tap.

Each session starts at 3:30 p.m. CST (please arrive by 3:15 p.m. so we can start on time) and runs for 90 minutes.

Click here for more information and to register for the event.

(CTA) Call To Action: Bryan Johnson Calls For Strategic, Practical Marketing For Managed Futures
JohnLothianNews.com

Marketing is one of the toughest parts of running a managed futures firm. It takes time, money and is often outside the skill set of most CTAs. Bryan Johnson of Johnson & Co. has spent the past five years helping and teaching fund managers about its importance and how to do it. He said CTAs may in the perfect spot right now to offer managed futures and expand their businesses.

“Marketing has become more critical than it been ever before,” said Johnson, who sat down with John Lothian News at CTA Expo New York. “There’s more noise and there are more people who are misinformed than are appropriately informed. And that’s all that marketing really is – communicating, educating and informing other people about not only your space but who you are, what your processes are and what your performance is like.”
Watch the video »

Lead Stories

This year’s Managed Futures Pinnacle Award Winners, from CME and BarclayHedge are:
2014 Best Emerging CTA – Ebullio Capital Management
Best Options Strategy – Doherty Advisors LLC
5-year Best Options Strategy – Global Sigma Group
Best Multi-advisor Futures Fund- AC Investment Management
5-year Best Multi-advisor Futures Fund- Abbey Capital Limited
2014 Best Single Sector CTA- Tanyard Creek Capital
5-year Best Single Sector CTA- Kottke Commodity Capital
3-year Best Hybrid CTA – Esulep Management
3-year Best Discretionary CTA- H20 AM
3-year Best Systematic CTA – Mondiale Asset Management
2014 Best Diversified CTA ($500 Million + AUM) – Two Sigma
2014 Best Diversified CTA (Less than $500 Million AUM) – Quantmetrics Capital Management
5-year Best Diversified CTA ($500 Million + AUM) – FORT LP
5-year Best Diversified CTA (Less than $500 Million AUM) – Mandiale Asset Management
Pinnacle Achievement Award – Cliff Asness, Managing and Founding Principal, AQR Capital Management

Also see the John Lothian Productions video interview for CME Group with Cliff Asness, an interesting and intriguing professional in this space.
Cliff Asness
www.mfpawards.com
Cliff is a Founder, Managing Principal and Chief Investment Officer at AQR Capital Management.
Get the full run-down on the Pinnacle Awards site here

With $21 Trillion, China’s Savers Are Set to Change the World
by Enda Curran, Jeff Kearns, Bloomberg
Few events will be as significant for the world in the next 15 years as China opening its capital borders, a shift that economists and regulators across the world are now starting to grapple with.
jlne.ws/1Kfi8NC

Managed Funds Association 2015 Conference Recap
Attain Capital, via ValueWalk
Take the just concluded Managed Funds Association’s “Forum 2015”, where managers have to make it through the squalor, noise, and smells of (wait for it…) the Four Seasons Hotel, dressed in nothing but a suit (usually without a tie). All sarcasm aside, many of the industry’s best and brightest were here in our home town swapping war stories and comparing track records at Managed Funds Association flagship conference highlighting education on managed futures and macro strategies.
jlne.ws/1T68UXa

Quant funds in a box
Hedgeweek
New York-based QuantConnect is an open source, community-driven algorithmic trading platform. The firm has a simple vision: to bring quantitative trading to the masses, providing the infrastructure, data and talent for anyone to build their own algorithmic trading strategy. QuantConnect believes that eventually, quantitative trading will be the primary investment vehicle of the future.
jlne.ws/1HwWPIJ

**JK – And if you like that, you’ll like this – Take One: Data and Fintech Rocking The Free World – from JLN – http://jlne.ws/1dxuJiw

GAIM 2015: What’s next for managed futures?
Automated Trader
Last year at GAIM, the managed futures discussion was a bit different as funds suffered from a heavy drawdown period. Fast forward to today, and there’s been a big recovery after a strong years’ performance. This performance swing brings up questions over the cyclical nature of managed futures strategies. Matthew Sargaison, chief investment officer at AHL, a diversified quantitative investment manager based in London, pointed out that there was a significant shift in the behaviour of markets driven by the financial crisis and its fallout, as well as reactive central bank actions.
jlne.ws/1T5Z2wM

Hedge Funds Keep Greek Exposure Low; Country’s risk said to be too complex to evaluate and hedge
By LAURENCE FLETCHER And STEFANIE ESCHENBACHER, WSJ
By the time Greece decided over the weekend to keep its banks and stock market shut this week, few hedge funds had much direct exposure to the country.
jlne.ws/1FQyE0p

Hedge Funds Fight to Save Puerto Rico Investments
By MICHAEL CORKERY and ALEXANDRA STEVENSON, NY Times
Hedge funds like Appaloosa Management, Paulson & Company and Blue Mountain Capital gathered in a conference room at the Barclays offices in Midtown Manhattan last September to talk about what was then the hottest trade: Puerto Rico.
jlne.ws/1KqJiBm

Traders Wanted: Tudor to Train Macro Managers as Banks Retreat
by Katherine Burton, Bloomberg
Paul Tudor Jones is looking for the next generation of macro managers.
The founder of the $14 billion Tudor Investment Corp., one of the best-performing and oldest macro hedge funds, is starting LaunchPad Trading, a joint venture that will give 20 young macro traders a chance to hone their craft before they start managing client money. It will be funded by Tudor partners including Jones, and HC Technologies, a Chicago firm run by Tudor alum Joseph Niciforo that specializes in algorithmic trading.
jlne.ws/1K6tx3P

Ex-MF Global trader settles CFTC manipulation claims for $500K
BY NATE RAYMOND, Reuters
A former trader at the broker-dealer unit of MF Global Holdings Ltd’s will pay $500,000 to resolve claims that he tried to manipulate palladium and platinum futures prices, a U.S. regulator said on Friday.
jlne.ws/1I9kLRa

***DA: Still waiting on charges against the big kahuna.

Managed Futures/Managed Funds

Speculating on commodities can add diversity to your portfolio
Financial Times
Anyone with an equity fund that tracks the S&P 500 has something close to 10 per cent of their investment in commodities companies, such as oil and gas producers or the miners of metals and minerals. For anyone who owns the FTSE 100, the figure is more than 20 per cent, largely because BP and Shell dominate the UK stock market.
jlne.ws/1HwT71M

Jim Rogers is Extremely Pessimistic
Hedge Fund News From HedgeCo.Net
New York (HedgeCo.Net) Jim Rogers is a legend in the hedge fund industry, having cofounded the Quantum Fund with George Soros. Mr. Rogers also seems to have a different way of looking at things. He displayed that with his best-selling book Investment Biker. MarketWatch recently interviewed Jim Rogers and what the interview revealed is that he is extremely pessimistic about the world stock markets. He is still invested in stocks in China, Japan and Russia, but he sees potential problems in each of those countries in the long run.
jlne.ws/1HwUdKN

Starting a Quant Firm from Scratch – Natasha Reeve-Gray, Altis Partners
Top Traders Unplugged
Our next guest left a well known trading firm in London to start a quantitative trading firm with 3 other partners. There’s a lot to be learned from her insights on starting a business, building a culture, and making it through the obstacles along the way. Listen in for our discussions on the startup phase and the current trading model.
jlne.ws/1dxx4Kk

Hedge Fund Rising Stars Show Commitment to the Greater Good
Institutional Investor
Amid a technology and venture capital boom, these young professionals prove that hedge funds still attract the cream of the crop.
jlne.ws/1HwUq0K

Zombie update: the silent hedge fund apocalypse
Dan McCrum, FT
More hedge funds have closed in the last decade than were open for business at the start of it, according to industry numbers from HFR.
jlne.ws/1JdObz5

Private client wealth managers shun moderately rich
Judith Evans, FT
A third of wealth managers will only provide advice to those with more than £1m to invest.
jlne.ws/1ItNRGJ

Managing the Future With These Alternative Funds
Morningstar
After a strong 2014 run, managed futures are roaring back on the liquid alternatives stage, as investors poured $1.6 billion into these trend-following mutual funds. There is certainly a degree of performance-chasing here, considering that investors had nearly given up on the strategy. Since the group’s meteoric 2008 rise–that year managed-futures funds were one of the few Morningstar Categories to gain in value–the group has largely floundered in terms of performance and flows.
jlne.ws/1T5YCX7

Have wealth managers overlooked the best hedging strategy in town?
Investment Week
The Contrarian Investor examines a segment of the fund market which could be set for a renaissance – despite remaining overlooked in some quarters.
jlne.ws/1T69vIp

Pensions & Institutions

Calpers’s Disclosure on Fees Brings Surprise, and Scrutiny
By ALEXANDRA STEVENSON, NY Times
Earlier this year, a senior executive of the California Public Employees’ Retirement System, the country’s biggest state pension fund, made a surprising statement: The fund did not know what it was paying some of its Wall Street managers.
jlne.ws/1BRqQ3C

Investors climbing risk ladder again to enhance returns
Pensions & Investments
Institutions are again investing in the riskiest real estate as they search for returns, after having moved into more stable, cash-flowing assets following the financial crisis.
jlne.ws/1T6dGE9

John Paulson loses millions on Greece and Puerto Rico
Fortune
Talk about a horrible way to start the week. A number of hedge funds that were already bracing for losses on Greek debt also found out late Sunday night that they would likely have to swallow big losses on investments in Puerto Rico as well. One of the biggest losers appears to be John Paulson.
jlne.ws/1LSwzWU

Investors Plan to Boost Alternatives Allocations
ThinkAdvisor
Institutional and high-net-worth investors are bullish on alternative investments, a survey released Tuesday by Altegris Advisors showed.
jlne.ws/1T5ZmeR

***DA: May be a bit of selection bias in that poll…

Alternative Investments, ETFs Are Increasingly Popular
ETF Trends
Institutional investors and hedge funds are expected to significantly raise their allocation to alternative investment strategies ahead. With exchange traded funds, any investor can access alts strategies as well. According to PwC, the alternative investment industry is expected to expand fivefold to at least $13.6 trillion in the next half decade, compared to its current $2.5 trillion
jlne.ws/1T5ZyLl

***DA: But likely not in this one.

Regulation

ESMA Agrees To Proposed Short-Selling Ban By Greek HCMC
ESMA
The European Securities and Markets Authority (ESMA) has issued yesterday its official opinion agreeing to a seven-day emergency short selling prohibition proposed by the Hellenic Capital Market Commission (HMCM) under the Short Selling Regulation.
jlne.ws/1C4yaZY

CFTC boss Massad one year in
Futures & Options World
Timothy George Massad became one year ago the most powerful derivatives regulator on the planet and was pitched headlong into a regulatory maelstrom that had been building since the financial crisis of 2008. The new chairman of the Commodity Futures Trading Commission entered the fray at a crucial time in the regulatory reform of the US derivatives market.
jlne.ws/1IpJ8dp

National Futures Association: Board Structure and Composition – Proposed Amendments to NFA Articles of Incorporation
NFA
Pursuant to Section 17(j) of the Commodity Exchange Act, as amended,
National Futures Association hereby submits to the Commodity Futures Trading
Commission the proposed amendments to NFA’s Articles of Incorporation regarding NFA’s Board of Director’s structure and composition. NFA’s Board approved the proposal on May 21, 2015, and NFA respectfully requests Commission review and approval of the proposal.
jlne.ws/1LxHCHg

Strengthening the Alignment of Risk and Reward: New Remuneration Rules
UK FCA
The FCA and PRA have released new rules for remuneration of banking staff, following recommendations made by the Parliamentary Commission on Banking Standards (‘PCBS’). The rules seek to strengthen the alignment between risk and reward by introducing measures including longer deferral periods and clawback for all risk takers.
jlne.ws/1GlgeXa

***DA: Say goodbye to “heads-I-win,-tails-you-lose.”

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