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El doble filo del HWM

Por casualidad leo en el Washington Post:

“Ackman’s private fund is about 24 percent below its high-water mark. That means it has to rise about 32 percent from its current level just to get back to where it was at year-end 2014 before it can resume generating “carried interest” fees for Ackman.”

¿Puede este hecho modificar el perfil de riesgo que tome el gestor en las futuras inversiones del fondo?

¿Tomará Ackman las mismas decisiones de inversión si estuviera por encima del HWM que necesitando un 32% para llegar a volver a activar el carried interest?

¿Sus inversores estarán interesados en el nuevo perfil de riesgo si es que cambia?

El HWM es justo puesto que no se le cobra 2 veces a un inversor por un mismo beneficio y ayuda a alinear a inversores y gestores. Sin embargo, después de caídas tan grandes esta alineación se pierde, puesto que el gestor ya ha cobrado y tiene un 32% de revalorización sin incentivos, a diferencia de los inversores.

En este caso, siempre quedaría pensar que los inversores de Ackman pueden estar agradecidos del 14.8% de revalorización anual acumulada desde 2004.

Liquidating a fund

Comparto un artículo del año pasado relacionado con la industria de fondos de inversión.

 

Dear Fund Director,

If you are liquidating a fund which was under your mandate, you are not alone. Fund industry has its own trends and fashions. And trends and fashions have always a maturity date.

Last week we were informed about the end of the Goldman Sachs BRIC fund. The fund was swallowed up by the GS Emerging Markets Equity Fund. The underlying cause was that the BRIC acronym is not in vogue any longer but formally GS stated reasons were to “optimize” its assets and “eliminate overlapping products”.

Indeepfd - BRIC fund liquidation

(Source: Bloomberg)

This story can also happen to us. Some reasons to liquidate a fund could be:

  • The fund assets are low, we couldn’t reach our asset expectations 3 years after launch.
  • The fund assets are low, the asset class is no longer in fashion.
  • The fund performance was poor in comparison to the benchmark.
  • The fund manager was an “investment star” and decided to leave the company. Then we faced big redemption flows.
  • The fund is doing something very similar to another of our funds. In the end, we are duplicating the strategy and confusing the investors.
  • The investment strategy didn’t work as it was supposed to.

However, in all this cases please think about a nice wording when you inform the regulator and your investors. GS did it very well.

If possible, also as GS did, try to merge the fund you would like to liquidate with another company fund with a similar investment strategy and risk profile and inform properly your investors about the new fund (however, you should sportsmanslikely accept losing part of the investors during or just after the change).

Remember: 1 – Merging sounds much better than liquidating, specially in the headlines. 2 – Offering investors a solution is always better than simply kick them out. 3 – Cash is also a solution. In some cases, probably the best.

I hope this GS example helps you with your next fund “liquidation”.

Papers sobre Activist Investors y Corporate Governace

Las actuaciones de los Activist Investors ha sido una constante durante los últimos años. Aunque hay mucho que comentar sobre el tema Activist Investors, este post es para recomendar un par de papers centrados en el impacto a medio- largo plazo de las acciones de los Activist Investors en las empresas y en el resto de accionistas y stakeholders.

A mi modo de ver, la parte positiva de estos dos papers, ambos llevados a cabo por profesores y universidades de prestigio, son las visiones diferentes que nos aportan. Por un lado, Coffee Jr.-Palia nos proponen en su paper del 2015 titulado “The Wolf at the Door: The Impact of Hedge Fund Activism on Corporate Governance” una visión mixta del efecto de los Activist investors:

“Although some view this trend optimistically as a means for bridging the separation of ownership and control, we review the evidence and find it far more mixed. In particular, engagements by activist hedge funds appear to be producing a significant externality: severe cut-backs in long-term investment (and particularly a reduction in investment in research and development) by both the targeted firms and other firms not targeted but still deterred from making such investments.”

Por otro lado, recomendar el paper “The Long-Term Effects of Hedge Fund Activism”, 2015, Bebchuk-Brav-Jiang, en el que afirman:

“We find no evidence that activist interventions, including the investment-limiting and adversarial interventions that are most resisted and criticized, are followed by short-term gains in performance that come at the expense of long-term performance. We also find no evidence that the initial positive stock-price spike accompanying activist interventions tends to be followed by negative abnormal returns in the long term; to the contrary, the evidence is consistent with the initial spike reflecting correctly the intervention’s long-term consequences. Similarly, we find no evidence for pump-and-dump patterns in which the exit of an activist is followed by abnormal long-term negative returns.”

El caso es que las actuaciones de los Activist Investors han sido muy discutidas por la opinión pública por los efectos negativos que podrían tener en los intereses a largo plazo de las compañías que tomaban por objetivo.

Sea cierto o no, lo que si puede ser necesario es que éstos faciliten mejores explicaciones a los accionistas y sociedad. Es probable que éste haya sido el motivo por el cual se haya creado un lobby en el que se publican interesantes artículos relacionados con los Activist Investors. Se trata de http://www.investorrights.org/ .

Según comenta su Mission Statement: “CIRCA’s mission is to get out the facts about activist investing and the role activist investors play in our economy. Activist investors directly benefit all public shareholders, including the investment vehicles for all of the country’s stock based savings vehicles, such as mutual funds and public and private pension funds.”

Así pues, ya tenemos lectura para el fin de semana. Espero que os haya sido de interés.

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