Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
The firm, established in1987, now manages $16.4 billion. Its research-driven approach was established by its founder and CEO, David Harding, who had previously launched the AHL managed futures trading system (subsequently acquired by Man Investments in 1994); AHL went on to become the first hedge fund-type product made available to Hong Kong retail investors.
Winton executives like to compare themselves with their larger rival by saying Man Investments has emphasised marketing, whereas Winton is all about its 110 research professionals, most of whom boast doctorates. The firm says the performance of its flagship futures fund has not had a negative year in the past 10, and has achieved annualised returns of nearly 20% in that period. Year-to-date, the $7.2 billion Winton Futures Fund has returned 9.18%, as of end August.
Although for now it intends to keep its research and investment teams concentrated in London, Winton is now moving sales, marketing and client service functions overseas. This year it will open an office in New York. There are possible designs for Hong Kong on the drawing board, with an eye to trade more contracts in regional markets such as India and, once futures contracts emerge on stock exchanges, China.
Winton has hired Alex Fraser in London to drive business in Asia ex-Japan. She hopes to replicate a recent success in Japan, forged by the firm's Japan business development team: the introduction of a managed futures strategy via Japan's MUFJ. This is an 80% principle-protected note structured by Goldman Sachs, in which Winton serves as the trading advisor. The inaugural tranche raised A$1 billion ($805 million). Noting that MUFJ has now also distributed five tranches of a Man futures fund, Winton officials believe there will be scope to do more business.
Asia including Japan now accounts for about 10% of Winton's assets under management. The firm has existing relationships with institutional investors and investment banks in the region, notably Singapore and Hong Kong. The Mandarin-speaking Fraser says her job is to develop relationships with investors in Taiwan and Korea, and eventually China, as opportunities and regulations allow.
For example, Winton is keen to take advantage of recent deregulation in Taiwan regarding its insurance companies' investments, and hopes the incoming Capital Markets Consolidation Act in Korea will open new distribution possibilities. Winton is keen to discuss possible arrangements with financial holding companies in Taipei and Seoul, with the hope of replicating the distribution model it has achieved with MUFJ.
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