German manager beats Americans in their own market – from Wiesbaden

How do you achieve top hedge fund performance in US managers’ own back yards? By mixing teams of Germans, Russians and Ukrainians, according to Wermuth Asset Management, whose US-focused Quant Global Strategy fund topped a list of returns from 51 rivals last year by November, according to Bloomberg.

The $300m German alternative asset firm also had the best of 61 Russian hedge funds, thanks in no small part to its significant operations in Russia.

The firm’s Quant Global Strategy, concentrating on the US, made 9% in the year to November.

Over the whole of last year the average North American hedge fund fell 3.3%, according to investable indices of Hedge Fund Research, while the S&P 500 index fell 0.8%.

The performance of Wermuth’s US-centric fund beat 51 other peer portfolios, according to Bloomberg.

It has made 32% a year, on average, since inception in October 2007, according to the manager. In 2008, as US and global shares slumped, investors in Wermuth’s product more than doubled their money.

In a year that Russia’s RTS index fell 22%, Wermuth’s Quant Strategy Eastern Europe fund gained 1% – the only such fund of 61 on Bloomberg’s database to report a positive performance. Since inception in September 2005 it returned 17% per annum, in US dollar terms.

The Russian fund takes views of WAM’s economist, Dieter Wermuth, and bottom-up analysis. Quant strategies are then applied to enter and exit positions automatically based on trend-following models developed in-house.

Sergey Ilchenko (pictured), head of the quant department at WAM, said: “The international financial community has looked skeptically at Moscow’s aims to become an international financial center. Now some hard figures delivered by a German asset manager’s team based in Moscow may change that.”


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