Trip Report Hong Kong May 2018

Despite a strong equity market year in Asia in 2017, valuations do not look stretched after a difficult 2018 ytd

Manager are cautious as the political landscape becomes more unpredictable and a trade war between China and the USA seems to unfold

The development of the Chinese financial markets creates more opportunities through the inclusion of Chinese stocks in global market indices and the launch of CDRs as local trading instruments

M&A activity in Asia has increased from about 15% to 20% of global volume since the financial crisis 10 years ago

Long-term interest rates are expected to trend higher, but it is happening slower than the hikes on the short end which could result in a rather dangerous inverse interest rate term structure

The trade war and sanctions have had an impact on currencies which led to the depreciation of the Chinese RMB and other Asian currencies as a consequence

The USD is expected to remain strong until growth in the US starts to slow which would release some pressure from EM currencies


Crossbow Newsletter July 2018



Only available in German


- Marktübersicht: Ein langer Zyklus

- Möglichen Auswirkungen von Zöllen auf Wirtschaftswachstum und

- Der Einfluss der Kurzfristigkeit an den Aktienmärkten

- Die Treiber weiterer Konsolidierungen im Hedge Fund Bereich


Trip Report London May 2018

If you would like to receive the entire Trip Report, including the Manager Reports of the 8 visited funds, please drop an email to Markus Moser (

Thoughts from leaders and Macros playing defense

Some prominent hedge fund managers attending an industry conference considered that given their growing AUM, performance and research are key to drive their business. The motto was “be different” (as this is where alpha is) and/or be large to have resources to constantly find new alpha sources.

Computational power is definitely a game changer for the industry. It allows quants to take very fast investment decisions out of an exponentially increasing amount of data and thus to seize part of the discretionary managers’ edge.

While there will always be humans behind machines, quantitative strategies should continue to grow in AUM and in their ability to take investment decisions.

Most Macro managers visited thought that we are currently in an environment characterized by two conflicting forces:
- Synchronized global growth with US still in a leading position
- Main central banks exiting or going to exit their QE programs

Managers considered the US economy as holding up (although it will probably drive the next recession) and expected higher DM interest rates later this year. There was no clear consensus on the USD due to different views on the impact of higher US interest rates, current accounts, trade war, etc. Most managers were short S&P 500, either as a hedge or against longs in EM equity indices.

Many managers were in trading rather than in investing mode and while overall not necessarily bearish, they were certainly more on the defensive side. The recent political developments in Italy added shorter-term concerns and triggered further risk reduction among some managers.


Trip Report New York May 2018

If you would like to receive the entire Trip Report, including the Manager Reports of the 24 visited funds, please drop an email to Markus Moser (

In Search of High Quality Growth and Pricing Power:

The balance sheet reduction by the Treasury and the rate normalization process by the Fed have been well telegraphed and interest rate risk is more or less priced in today

Yet investors are underpricing the tax plan of the Trump administration which will lead to higher U.S. deficits and more Treasury issuance, adding a lot to the supply of bonds and creating a potential USD shortage in the world

Ironically, the opportunity set in the high yield bond space has changed for the better, as large amounts of capital are leaving the space – leading to wide single name dispersion, high spreads and much better shorting opportunities

The backdrop for M&A remains constructive and deal activity robust, as we see a bifurcation of the M&A space in “commoditized” deals with little risk and low spreads and deals with high regulatory risks and attractive spreads up to 20%

U.S. equity managers are increasingly favoring companies with pricing power and high quality growth rates in the tech and healthcare space over defensive and interest-rate sensitive “bond proxies” in low growth industries such a consumer staples, utilities, and REITs

Younger equity managers are increasingly relying on AI and on real time data analytics to underpin their investment theses, to verify trends between quarterly results and to risk manage quarterly earnings

Biotech could be somewhat recession-proof, as the pace of innovation is high, valuations are largely reasonable, and M&A activity has heated up


Time for Global Macro Managers

David Friche offers Citywire our view why we think it's a good time for Global Marco managers (page 2). 


Crossbow Newsletter April 2018

- Bevorstehenden Regimewechsel an den Märkten und die Möglichkeit der Diversifikation durch aktive Manager
- Produktideen im Bereich Alternative Beta and Risk Premia
- Studien zu alternativen Anlagen: «Profitieren Hedge Funds von öffentlichen Informationen?» und «Erträge des Aktiven Managements im Falle von Hedge Funds
- Rückblick auf unseren Event vom Mittwoch, 2. Mai 2018 zum Thema „Robotics, Drones and Automation


Trip Report London March 2018

If you would like to receive the entire Trip Report, including the Manager Reports of the 10 visited funds, please drop an email to Markus Moser (

The trip to London focussed on multi-manager funds, macro / trading funds and alternative risk premia funds

Multi-manager funds have proven themselves to be alternatives to fund of hedge funds because of their diverse nature and centralized risk management while size, culture and risk framework are differentiating factors

Macro / trading hedge funds view the sharp sell-off in February mostly as technical or behavioural in nature as macro-economic fundamentals did not warrant the speed and magnitude of the market’s reaction

Hedge funds reduced directionality across all strategies, as gross and net exposures have come off recent highs, while the outlook is more muddled, mostly due to policy and geo-political uncertainty on the rise

Alternative beta is gaining traction as a less costly way to access alternative risk premia, which have academically been an element of certain hedge fund strategies




The Market Navigator April 2018

Summary: We have entered a late cycle environment in which volatility typically starts to rise. Global growth has likely peaked, but will remain above trend for some time. Stimulus is being reduced, and interest rates have started to rise. Inflation concerns, trade war fears and and slightly slowing growth raise fears of stagflation. The higher volatility regime could roll over into an extended correction. Later
during the year, we might see another substantial «late» upleg in risk assets. A global recession seems unlikely to start before late 2019.


Crossbow Event: Robotics, Drones, Automation — Investments in Megatrends

Was? Megatrends erkennen und Investitionsmöglichkeiten finden
Wann? Mittwoch, 2. Mai, 2018 ab 16:00 Uhr
Wo? Zunfthaus zur Waag, Münsterhof 8, 8001 Zürich


Trip Report New York November 2017

If you would like to receive the entire Trip Report, including the Manager Reports of the 19 visited funds, please drop an email to Markus Moser (


Most managers are trimming their equity exposures as the current rally is pushing valuations to high levels and it becomes easier to find attractive shorts

USD 1.5 trillion bond supply will have to be absorbed by private investors in 2018 which will lead to higher yields and a steeper yield curve

Short-term interest rates in the US should be 300 basis points higher compared to previous cycles, but this may not happen this time as the governments remain the largest debtors

Long-term interest rates however will be driven higher by up-trending inflation numbers which will also support higher commodity prices

Convertible bonds had a difficult time in the extreme low volatility environment of 2017, but could revive in a more volatile 2018

Geopolitical tensions are increasing in the Middle East, but also between Russia, China, Europe and the USA on trade issues

The USD is expected to strengthen on an inflation surprise that can be expected in 2018, but will longer-term weaken based on strongly increasing debt deficits in the coming years