Going into 2012 we look back at some of the momentous events that shaped the past year and explain how these events affected our investment strategies.
IPM fared generally well during 2011. We won several new client mandates and were named “Hedge Fund Manager of The Year” at the prestigious Global Pensions Awards, and “Best Macro” by HFMWeek. In The Hedge Fund Journal’s special report in September (published in association with Newedge) IPM was ranked among the top hedge fund managers in Europe.
In other respects it was a tough year, not only for investment managers, but for the financial markets in general. There was simply no way to avoid getting caught in the political turmoil in the US and the EU. In addition to this there was the Arab Spring, several natural disasters, and the explosions at the Fukushima nuclear plant in Japan. All of these events naturally came to shape much of the year that was.
Looking at IPM's investment models, the combination of the reduced US credit rating – due in part to its inability to address fiscal imbalances, and the European inability to act forcefully and consistently when facing a renewed crisis, led to a downturn in our currency and asset allocation models. We continued to recover from this up until the year end. Our bond models fared better hovering around zero, while the relative equity model ended the year on a positive note.
In hindsight we would of course liked to have seen strong performance in all our models, but we take comfort in the fact that we still rank better than most of our competitors in the systematic macro and equity universe on most of the important metrics over the longer term.
Being firm believers in the old adage about a chain only being as strong as its weakest link, we continued to aggressively invest in the latest technology, and hire the brightest minds in the business to help lead the company into the future. Related to this we also welcomed the Swedish finance group Catella as IPM’s first institutional shareholder (5%), thereby opening the door to possible synergy effects.
Going forward, we can see that our systematic models held up reasonably well even during times of extreme distress this past year, and we have already started to see signs of confidence returning to the economic system. IPM is exceptionally well positioned to take advantage of this wave of new confidence and to continue to meet our client's high demands for years to come.