October 2008
- Eurohedge
- Bank of Italy registers Theorema's Focus fund
Theorema Asset Management, the long-standing London-based investment
firm led by Giovanni Govi, has won Bank of Italy registration for
its recently-launched Theorema Focus Fund.
The firm said it was only the second foreign EU-based non-UCITS
fund to achieve this status, adding that the central bank registration
would increase its opportunities for distributing the fund to institutional
investors in Italy.
Theorema added that the successful registration with the Bank of
Italy “should be seen as a significant stamp of approval for the
Focus Fund, but also for our overall management organisation”.
Theorema Focus, managed by Francesco Masoni and listed on the Irish
Stock Exchange, was launched in February this year and is a concentrated
‘best ideas’ long/short equity portfolio that represents the best
ideas of the firm’s diversified Theorema Europe Fund.
The firm’s flagship Theorema Europe fund, which has been running
since June 2001, has performed very steadily this year in a horrendous
market for long/short equity funds – and was flat for the year to
the end of September at a time when many other well-known European
long/short equity players were already down by 20% or more.
Theorema Focus has also performed much better than most of its peers.
Having been narrowly up after its first six months since launch
in February, the fund was down by just over 2% to the end of September,
following a loss of 3.66% in September.
April 2008 Click on a link to read the article
- Eurohedge
Summit 2008 -A walk on the short side
The short side was also the focus of an animated and highly entertaining
panel session featuring four fund managers from different backgrounds
– long/short managers Giovanni Govi of Theorema and Tim Steer of
New Star, long-standing market-neutral manager Vincent Bourgeois
of HSBC/Halbis and short-only manager John Cenedella (ex-GLG, now
launching a short-only index derivatives fund via his own Forbes
firm).
Govi drew gales of laughter by reading an excerpt from a study on
shorting about the character, psychology, attitudes and personal
habits of fund managers engaged on the short side.
And both Govi and Steer reinforced how difficult it can be to think
in the negative mindset required for successful shorting – and to
keep conviction – in an equity market that is structurally geared
towards positive thinking as a result of the huge long bias of fund
managers at large and the “propaganda” generated every day through
investment bank research and other means of communication.
“We look for a hard, hard catalyst,” said Govi. “You have to switch
your mind completely from being positive about everything to being
negative about everything. That is the biggest challenge.”
For his part, Steer pointed to forensic analysis of company accounts
as the trigger for most of his successful shorts. “Every figure
in a set of accounts, except the cash figure, is a matter of opinion,”
he said. “Forget the P&L and look at the balance sheet: the
good news is always in the P&L; the bad news is always in the
balance sheet.”
He added: “It’s like an iceberg – you will never see everything.
But there are things that are always warning signs – continual acquisitions,
continual exceptional items, continual changes to accounting policies,
depreciation policies and so on – and these are the things you have
to go on. This is the ice above the water.”
As for Bourgeois, who advised the audience that being a market-neutral
manager was “always frustrating”, he said: “You can be consensual
in making money on the long side. You can’t on the short side.”
He added: “The biggest problem you face is the exogenous event –
the smart activists getting involved, or the private equity and
M&A bids. These are the things that disrupt the natural order
of things whereby bad things should happen to bad people and good
things to good people.”
February 2008 Click on a link to read the article
January 2008 Click on a link to read the article
- Eurohedge
- Theorema adds best ideas Focus fund to growing list
Theorema Asset Management, the long-established London-based long/short
European equity firm led by Giovanni Govi, is adding to its growing
product range with the launch of a best-ideas long/short portfolio.
Theorema Focus will run a book of some 10 long positions
and 15 shorts, aiming to run a tight net exposure ranging from -10%
to +30% and a punchy gross exposure of around 200%. It will go live
at the start of February, although the strategy has already been
running successfully since 1 November as a managed account for an
existing investor of the firm. The Focus portfolio will be a concentrated
version of the firm's six-year-old flagship Theorema Europe Fund,
which had a very good year in 2007 - gaining 13.5% on volatility
of 3.8%. Solely led by CIO Govi since co-founder Emanuele Antonaci
stepped back last year, Theorema runs around $1 billion across its
three funds - the pan-European Theorema Europe, the twice-levered
Theorema Europe Plus and the long-only Axioma. The funds are run
by Govi, former Fidelity man Frederic Gautier and Paolo Mortarotti.
In addition the firm's experienced team includes Pedro Furtado Reis,
Jelena Olman, Francesco Rustici, Owen Taylor and Francesco Masoni.
Masoni is the portfolio manager on the Focus fund, under the overall
leadership of Govi. Performance in 2007 was boosted by Govi's decision
to rein back an increasingly risk-taking and overly directional
style on the long/short funds and return to the firm's historic
roots of running a low-vol strategy with a capped net market exposure
of 50% and a focus on stock-specific shorting rather than index
hedges. The firm is also believed to be planning a 130/30 fund launch
later this year and is examining some other possible new products.
June 2007 Click on a link to read the article
- Eurohedge
- New era at Theorema as Govi takes the helm
Investors appear to have reacted positively to the recent changes
at Theorema Asset Management, the long-established London-based
long/short equity specialist whose flagship fund is now six years
old.
Giovanni Govi, who started Theorema with Emanuele Antonaci back
in 2001, has taken over as sole CIO at the firm - with Antonaci
stepping back from day-to-day involvement and his equity stake being
redistributed among the Theorema team.
Having slipped from a peak of €950 million in 2005 to below €600
million earlier this year, assets are picking up again. The firm
is confident of hitting a target of €1 billion across its three
funds - the pan-European Theorema Europe flagship, the twice-levered
Theorema Europe Plus version and the long-only Axioma vehicle -
by the end of this year.
Frederic Gautier, who joined from Fidelity last year to run Axioma
and who has been co-managing all the Theorema funds with Govi over
the last few months, has now fully taken over Antonaci's areas of
portfolio management responsibility.
The rest of the investment team - analysts and sector specialists
Pedro Furtado Reis, Jelena Olman, Francesco Rustici and Owen Taylor,
as well as trader and hedging strategist Francesco Masoni - are
now equity partners in the business.
In addition, Paolo Mortarotti will soon be rejoining the firm from
UBS O'Connor, where he had spent three successful years as a portfolio
manager in the consumer and media sectors.
Since June 2001, the Theorema Europe Fund has performed well for
investors - producing an annualised return of 11% on low volatility.
The punchier Plus fund, which started in September 2004, has posted
a much higher return - annualising at 31% - but on much higher volatility.
Following a big drawdown last May for both the main fund and the
Plus strategy caused by its increasingly risk-taking profile, the
investment mandate was tightened up significantly last summer under
Govi's leadership.
Net market exposure is now firmly capped at 50%, with greater emphasis
also being given to stock-specific shorting rather than index hedging,
and the funds have performed very strongly since then.
Theorema Europe has since posted 11 consecutive positive months
and is up by around 8% this year - despite its low market risk exposure
- while the Plus strategy up by almost 16%. Axioma, a concentrated
best-ideas long-only portfolio, has been flying - showing an annualised
return of 44% since its launch last autumn.
April 2007 Click on a link to read the article
28 March 2007 Click on a link to read the article
- Eurohedge
- Changes at Theorema as Antonaci steps back
Emanuele Antonaci, co-founder of the London-based Theorema Advisors,
is stepping back from day-to-day involvement at the firm in a series
of changes that see Giovanni Govi, who co-founded the firm with
Antonaci six years ago, becoming the sole CIO.
Since Antonaci and Govi launched Theorema in 2001, the firm has
grown to a team of 17 people running some $700 million across three
funds – the flagship Theorema Europe long/short equity strategy,
the twice-levered Theorema Europe Plus version and a concentrated
long-only product called Axioma that started life last year.
Frederic Gautier, who joined Theorema from Fidelity last year to
run the new Axioma vehicle and who has been co-managing the Theorema
funds with Govi for several months, now becomes an equity partner
at the firm and will fully assume Antonaci’s previous areas of portfolio
management responsibility.
Antonaci will take up a new advisory function with the firm, but
he is ceasing to have any day-to-day portfolio management responsibilities
at Theorema.
The firm intends to continue with the same sector specialisation
as before, with four sector specialist analysts assisting the two
portfolio managers – Pedro Furtado Reis (financials), Jelena Olman
(telecoms and media), Francesco Rustici (industrials, materials
and healthcare) and Owen Taylor (consumer sectors and commercial
services).
Francesco Masoni, who joined the firm two years ago from Morgan
Stanley, continues to be in charge of trading and hedging strategies.
To enhance the long-term stability and development of the business,
the firm is awarding equity to key partners and employees as a result
of Antonaci’s departure – including the whole investment team.
The investment team is already invested in the Theorema funds and
Govi and Gautier plan to add significantly to their personal investments
in a show of commitment and confidence in the firm’s future.
Since its inception in June 2001, Theorema Europe has performed
well for investors – producing an annualised return of 10% on low
volatility. The punchier Plus fund, which started in September 2004,
has generated a much higher return – annualising at 28.8% - but
on much higher risk.
Last year the flagship fund had a big drawdown in May – losing 4.22%
and a further 1.06% in June, and dropping 9.38% and 2.37% in the
case of the Plus fund – although it still produced a net return
of over 10% for the year and of more than 20% for the Plus version.
As a result, the investment mandate has been tightened – with net
market exposure capped at 50% - and 2007 has started well, with
the Plus strategy up 4.2% in January and both funds flat in February.
The move to rein back the fund’s increasingly risk-taking profile
up to last May’s setback is paying dividends on the flagship Theorema
Europe strategy too - which has had eight consecutive up months
since last July, showing positive returns even in the tricky months
of last October and February this year.
Axioma, the concentrated long-only strategy, launched in August
last year and is up by 21.5% after its first seven months, losing
less than 1% in February against a 2.2% fall in the MCSI Pan Euro
Index.
Among other changes Silje Augustson, who left Theorema two years
ago to set up her own third-party marketing operation, is rejoining
the firm to take charge of marketing and business development.
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