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Home › Marketing Technology › Silver Lining For Hedge Funds In Market Chaos

Silver Lining For Hedge Funds In Market Chaos

06Jun
Green KeyLeadership + Management, Marketing Technology

As financial markets worldwide continue to slowly push up from their March collapse, hedge fund investors are experiencing less of a ride and in some cases are seeing strong positive returns.

Hedge funds overall are down an average of 4.6% for the year through late April, according to a Reuters report. That contrasts with the S&P 500 which was down 10% for the same period.

More than a few managers are also seeing positive returns. Reuters said Pershing Square Capital Management’s Pershing Square Holdings fund was up 13.6% in April and 17.3% for the year. The Wellington hedge fund is up 10%.

In March, when financial markets lost as much as 25% from their 2020 high, Barclay’s Hedge Fund Index showed funds were down 9%. Since the beginning of the year, they are off 7%, better than the Dow Jones, which despite a strong April, is still off by 8%.

Writing in InvestmentWeek recently, Tom Kehoe, global head of research and communications at the Alternative Investment Management Association , said, “Hedge funds have managed to halve (or in some cases even more) the losses incurred by investors who have invested passively in equities or fixed income investments.

“Looking at previous market corrections, hedge funds have consistently demonstrated they have been able to manage these periods for investors better than anyone else.”

Worried investors did pull some $33 billion out of hedge funds in the first quarter, most of it in March when the world’s financial markets went into freefall. It was the largest outflow since the Great Recession.

The volatility and uncertainty caused by the pandemic drove what Hedge Fund Research President Kenneth J. Heinz called a “historic collapse in investor risk tolerance.”

Yet, as Financial Times writer Laurence Fletcher points out, the outflow demonstrated a difference between the 2008-2010 recession and now. Today’s hedge fund investors are by and large institutions that have done their due diligence and are more able to weather market gyrations than the investor of a decade ago.

That has also enabled astute fund managers to leverage opportunities.

Observed Heinz, “While volatility and market dynamics remain fluid through early 2Q, dislocations created by indiscriminate selling from traditional asset management have created significant opportunities for specialized long/short funds, which are likely to benefit both forward-looking funds and institutional investors in coming quarters.”

Photo by Tech Daily on Unsplash

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What will it take to be a successful chief marketing officer in 2021? Nothing less than having all or at least most of 26 traits, insists a post on the blog of the digital Australian agency, Core dna.

It’s an ambitious list that begins with traits most of us will agree are not just desirable in any leader, but are fundamental. These include being a team player, having a curious mind, being a “communication maestro” and having the skill to see the big picture while managing the details and daily tasks.

Then, writes Sam Saltis, the founder and CEO of Core dna who runs the global firm from Boston, CMOs must also know what’s on the “cutting edge of marketing innovation.” Discerning what’s a fad and what is a worthwhile investment, he says, keeps the company “moving forward instead of being late to emerging trends.”

Successful CMOs “don’t simply follow the crowd but instead push forward to help the company become an early adopter on the trends and platforms that will be huge into the future.”

That requires taking risks. Not impulsive ones. Rather those risks that are “calculated, data and research-backed,” he says. That requires another trait, bravery, because there may be pushback from “stakeholders and superiors, so a CMO needs to be strong-willed and resilient in the face of skepticism.”

As exhaustive a list as it is, there’s little with which to disagree. Open-minded, diplomatic, growth-obsessed, data literate and the others on Saltis’ list all appear in one way or another in other posts and analyses about the transformation of the role of chief marketing officer.

Writing for Deloitte on The Wall Street Journal’s website, Marie Gulin-Merle, global vice president of ads marketing at Google, says the COVID pandemic forced marketers to adapt on the fly to the new challenges and rapid changes.

Already the shortest-tenured of corporate leaders with half on the job fewer than 30 months, CMOs now are expected to be “customer champions, frontline defenders of the brand, stewards of internal morale and culture, and drivers of company growth initiatives.” Yet their main job is growing the business, she says.

Acknowledging marketers “can’t be all things at once,” Gulin-Merle offers Deloitte’s five “archetypes” as a guide:

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“While CMOs may naturally fit one or two of the archetypes,” she says, “They can learn to prioritize their time and effort across all of the roles depending on the needs of the organization.”

“Most CMOs should focus above all on innovation and growth — on building data and insights-driven marketing organizations that can read customer signals at scale and make them actionable in real time.

“In a dynamic market, that’s where CMOs can help organizations grow and stay resilient.”

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Productivity is about systems, not people, says the Harvard Business Review.

Sure, there are hacks and techniques each of us can use to filter out the noise, but in the end, writes Daniel Markovitz, “The most effective antidote to low productivity and inefficiency must be implemented at the system level, not the individual level.”

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“94% of most problems and possibilities for improvement belong to the system, not the individual,” he says, citing the case made by W. Edwards Deming in his book Out of the Crisis. “I would argue that most productivity improvements belong there as well.”

This is a particularly telling point for human resources professionals who are often tasked with providing training on time management. Markovitz says there’s nothing wrong with teaching techniques like Pomodoro, Inbox Zero or one of the many others. What’s necessary is to also address system inefficiencies.

That’s where he focuses his article, offering what he calls “four countermeasures.”

Tier your huddles

Whether you call them stand-ups, check-ins or huddles, Markovitz shows us how to use these meetings to avoid the inefficiency of “scattershot emails about a variety of problems.” Instead of kicking problems up the hierarchy, address problems at the lowest possible level. Problems that can’t be resolved at the staff huddle are the ones, and the only ones, to escalate to the next level huddle.

Make work visible

Because so much of office work is done by individuals working alone, it becomes invisible. Implementing a physical or virtual task board where every task is represented along with who is handling it not only makes a more equitable distribution of work, it also eliminates status check emails and the need to cover that topic in meetings.

Markovitz suggests making downtime equally as visible. Instituting “predictable time off” allows workers to know when someone is unavailable and react accordingly.

Define the “bat signal”

Pointing out that Batman knew flashing the symbol of a bat in the sky meant a crisis, Markovitz suggests companies adopt something similar to indicate when an issue is a real emergency.

“With no agreement on what communication channel to use, workers are forced to check all digital messaging platforms to ensure that nothing slips through the cracks. That’s toxic to productivity. Companies can make work easier for people if they specified channels for urgent and non-urgent issues.”

Align responsibility with authority

“If an employee is responsible for an outcome, they should have the authority to make the necessary decisions without being forced into an endless string of emails, meetings, or presentations,” writes Markovitz.

“The pursuit of individual productivity is healthy and worthwhile,” he agrees, though the value is limited because of all the pulls and tugs by others.

“To make a real impact on performance, you have to work at the system level.”

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