Alma CQS Asian Macro
Cumulative Performance (%)
Fund Inception 28 May 2021
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance quoted. The investment return and the principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost.
Strategy & Manager
Alma CQS Asian Macro seeks to generate absolute total returns through the application of a directional discretionary macro strategy, capitalising on investment opportunities driven by the markets and economies of the Asia-Pacific region.
The Investment Manager expresses investment themes through long and short positions in highly liquid, easy-to-price instruments such as futures, forwards and listed options in the equity, commodity, currency and rates markets.
The Investment Manager focuses on investment opportunities driven by the markets and economies of the Asia-Pacific region including Australia, New Zealand, Japan, India, China and the Association of South East
Asian Nations (ASEAN). The Investment Manager focuses on the major regional economies and markets and the Sub-Fund is unlikely to have positions in frontier markets. From time to time the Investment Manager
may take positions in non-Asian markets where the Investment Manager believes there is a significant influence from Asia-Pacific economies or markets.
The Investment Strategy is contrarian, value-orientated and research-driven, and combines longer term strategic positions with shorter term tactical positions. For strategic views, the Investment Manager uses primarily fundamental data while using its proprietary “stress indicators” based on market prices on a daily basis to help with the tactical positioning. The Investment Manager emphasises capital preservation by employing strict risk management and stop-loss disciplines.
The Investment Manager seeks to identify substantial mis-pricings and expects to have two to three investment themes at any point in time. Typically, investment themes form over weeks or months, and would
take 6-18 months or longer to play out, often in several phases or waves across different geographies and asset classes. The Investment Manager may not invest in assets or instruments associated with such investment themes continuously and may trade in and out depending on market conditions.
CQS is a multi-strategy asset manager, founded by Sir Michael Hintze in 1999 with $21.6bn in AUM.
The core investment team of the CQS Asian Macro Fund consists of two dedicated investment professionals: Geoffrey Barker and Nicholas Bibby. The team leverages the insights of the other 70 investment professionals within the CQS investment/research department.
Goeffrey Barker has managed the strategy since inception in 2006 with the same team and investment process.
Prior to joining CQS with his team in August 2019, Geoffrey managed the same Asian Macro strategy that was previously known as Counterpoint. Before this, Geoffrey was the manager of the BIA Pacific Macro Fund (2006-2013) that was twice named “Best Asian Macro Fund of the Year”. Previously, he was the Chief Economist and Head of Research for HSBC in Asia. He also ran the research department and was the Japan economist both for Baring Securities and Smith New Court in Tokyo.
Geoffrey holds an MBA from City University Business School in London and a BSc in Economics and Politics from Bath University, England.
Nicholas joined CQS in 2019 and has 20 years’ industry experience.
He joined following his role as an Economist at the City Financial Investment Company. Previous to that, he held multiple positions as a director, at Ballingal Investment, Barclays Capital and was Executive Director at UBS.
He earned a Bachelor’s degree in Economics from Sussex University and a Masters in International and Financial Economics from Durham University.
Statistics & Commentary
The performance data shown represents past performance. Past performance is not a guarantee of future results. Current performance may be lower or higher than the performance data quoted. The investment return and the principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost.
Sector Breakdown as a % of AUM
as a % of AUM
as a % of AUM
as a % of AUM
Investment Manager's Commentaryas of 30/07/2021
The I1C-U share class of the Fund rose a net +1.3% in April taking year-to-date performance to +7.7%. By asset class, most of the Fund’s returns came from the Currency book (+113bp gross) but modest gains were also made in Bonds (+38bp), in Equities (+18bp) and in Commodities (+2bp).
Our thinking at the start of April was that fears over inflation had reached a fever pitch but that the risks to global growth were still being under-estimated. Investors were overly focused on the US economy that was relatively resilient and not sufficiently concerned about the dangers elsewhere. In particular, China’s rigid pursuit of “zero-COVID” was liable to conflict with the desire to stabilize demand via public works spending and easier monetary policy. Early April saw Shanghai resort to a full lockdown – after reporting a higher number of daily COVID cases than had occurred originally in Wuhan – and other major cities increased their health policy vigilance. Meantime, for fear of being quarantined, many people across the country reined in their activity. With Omicron being highly contagious, it was hard to see a quick return to normality.
Similarly, in Europe, it was becoming difficult to see an early end to the Russia-Ukraine conflict that was raising food and energy costs globally and knocking confidence. Europe’s dependence on natural gas and lack of storage and supplies of alternatives were squeezing corporate profit margins and reducing consumers’ disposable incomes. Overall, higher costs and weaker growth were leading to stagflation.
From a market viewpoint, we initially focused on shorting government bonds while remaining long oil and looking for opportunities to play the “opening-up” theme in Asia via equities in Singapore. As the month progressed, we became more negative on risk assets and shifted the Commodity book outright short, cutting losing long positions in oil and gold and recouping the losses via shorts in cyclical metals. We also closed out our short position in US Treasury bonds for a profit as the market ran into long-term resistance… although this proved to be premature.
We realized, perhaps belatedly, that the US dollar was liable to have a further leg up as the hawkishness of Fed policy contrasted with China’s need to keep monetary conditions easy and with the outright dovishness of the Bank of Japan. We went short the Japanese yen and the offshore renminbi (CNH) in greater size. These two positions accounted for our gains in the FX book.
Finally, in Equities, we shifted away from Asia – that had already seen a bear market – and shorted the US, via the Nasdaq, as we expected rising real rates and deteriorating global activity and a strong dollar to hit US growth names. A bear squeeze on the last day of the month reduced our gains but we were still profitable.
In all the noise of April, we kept our gearing modest (at an average of 55% on an “equity-equivalent risk” basis) and our net VaR (1-day, 99%) at just 0.78%.
Facts & Documents
Fund Domicile: Luxembourg
Fund Type: UCITS SICAV
Fund Launch: 28 May 2021
Base Currency: USD
Depositary, Administrator, Transfert Agent: RBC Investor Services Bank S.A.
Dealing: Each day with a 1-day notice
Cut-off time: 10 am CET
Management Company: Alma Capital Investment Management
Investment Manager: CQS (UK) LLP
Fund Managers: Geoffrey Barker
Countries where the fund is registered:
Luxembourg, Austria, UK
The information related to the integration of sustainability risks and to the potential adverse sustainability impacts at the sub-fund level can be found in the prospectus of the Fund.
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