Brexit may be confusing for banks, which are still none the wiser about the best place to be based in Europe, but it’s been great for some hedge funds.
Shortly after the referendum, the Financial Times reported that three funds did particularly well in the wake of the referendum: Odey Asset Management, Marshall Wace and TT International. One of those, TT International, just filed its accounts with Companies House and they look pretty good.
TT’s newly registered accounts cover the period from 30 June 2015 to 30 June 2016, so the impact of favourable market movements post the Brexit referendum on 23 June will, admittedly, have been minimal. Something went right for the fund though: in the 12 months to June its profits tripled from £9.1m to £28.7m. These profits were available for distribution between TT’s 10 partners, including founder Tim Tacchi, ex-UBS trader and portfolio manager David Grimbley, and ex-UBS equity salesman Vikram Kumar.
Founded in 1988, TT follows a heavily research-focused model and is one of London’s most enduring and low profile hedge funds. Its success comes as a time when most hedge funds are struggling with results inferior to those of index funds. While Tacchi himself is an experienced macro investor, TT International operates both long only and long/short equity funds – including a financials long/short fund which may well have benefited from European banks’ share price woes (in a September note TT said European banks are ‘turning Japanese‘).
TT’s partners weren’t the only beneficiaries of its strong performance. The fund employed 59 people in total last year, and paid them £12.3m – an average of £179k ($223k) per head.
Unlike some hedge funds, TT isn’t a big recruiter. And despite its cluster of ex-UBS equities traders and salespeople, it doesn’t necessarily hire from banks.
The Financial Conduct Authority (FCA) Register reveals that it’s only recruited five people this year, including Charlotte Rodin, former head of equity sales at Mediobanca, and Mustafa Akay, a former investment analyst at Decca Fund. This is unfortunate: as European banks’ equity businesses struggle, equities traders and salespeople are at the front of queue for redundancies. There’s no shortage of equity professionals in London who’d like a job at a successful, research-focused, equities hedge fund now.
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