Hedge Fund Awards 2015
Hedge Fund Awards 2015 www.acquisition-intl.com 40 Best Multi strategy Approach to Investing - Mexico Intercap Based in Mexico City, Intercap is a hedge fund manager and investment advisor, with a focus on emerging markets, particularly in Latin America. We spoke to Raul Fernandez Diaque from the firm to find out more Intercap, based in Mexico City, is a hedge fund manager and investment advisor focused on emerging markets, primarily Latin America. The firm has been in busi- ness close to 20 years, with its core team still almost completely intact. “The most essential aspect of our work is defined by trying to find attractive invest- ment opportunities within different markets and asset classes with a suitable risk/ return profile,” says Raul Fernandez Diaque from the firm. “We try to source as many of these setups as we can in order to diversify our risk properly. “We have a deep focus on capital preservation, and we strongly believe that over the medium and long term, a compounded steady return is much more profitable than trying to hit homeruns in every single instance.” Intercap uses a combination of traditional methods and new strategies to find undervalued securities and detect opportunities in different markets. This hybrid approach to investing is based on fundamentals, which is mostly the value part of the equation, along with technical tools, which provide the needed aspects for assessing timing and sentiment, says Fernandez Diaque. “If we had to label our style we would probably fall under the “value “ category, but we try to remain open minded and flexible without compromising discipline and a healthy diversification. “Over the years we have developed our own models for measuring distinct entry and exit points. Unfortunately we do not have the magic formula, but so far our approach has rendered good results.” When Intercap enters into a trade, the firm almost always has a medium term approach, says Fernandez Diaque, “since in case our assumptions don’t come into fruition in the short term we can feel comfortable being patient for them to take place. On the other hand, if we see certain things happening which might affect our initial thesis negatively, we do not hesitate to exit a position immediately.” The firm deals mainly in Brazil, Mexico, Colombia, Argentina, Chile, Peru, and to a lesser extent Venezuela, says Fernandez Diaque. “We try not to discard any country per se, although we try to focus our energy and resources as efficiently as possible.” Asked what differentiates the firm from its competitors, Fernandez Diaque says while it is difficult to name a single differentiator or advantage, the team’s accumu- lated experience after navigating many different market environments, not only in emerging markets, but globally, is something of particular value. “This is something that cannot be taught,” he says. “Another thing that probably distinguishes Intercap is the fact that despite being located in Mexico, we incorporate a global view when assessing opportunities within emerging markets,” he continues. “We often find many investors fail to distinguish the forest for the trees, which turns out to be a big disadvantage.” Over the years, Intercap has seen the hedge fund industry grow and develop in many aspects, Diaque says. “The number of funds has increased as well as money allocated to the asset class, but this has come along with a higher degree of regulation, which has also created a higher entry barrier given the additional costs brought by the new standards. “At the same time, the world has become much more connected and markets are evidently also more intertwined which has produced a much more challenging environment that requires a deeper understanding of the various forces at work.” The hedge fund industry is constantly undergoing a creative/destructive process, Diaque says. “Many funds are created each year and many cease to exist for various reasons. This business can be extremely rewarding in many aspects, but at the same time it is not very forgiving, and past success by no means guaranties a rosy future if you rest on your laurels. “Increased regulation has been one of the biggest developments in this business in recent years. As in many cases there are negatives and positives from this, on one hand it has increased costs and the need for additional resources to comply, but on the other hand there is no question that this change has likely given a stronger foundation for many companies and the industry as a whole. The key obviously is that a proper balance is reached in order to avoid an over regulated business that threatens the core business model of hedge funds.” It is “a great honour and privilege” to have received the award for Best Multi Strat- egy Approach to Investing – Mexico, says Diaque. “It definitely means a lot for us, especially since we know that there are many talented managers with tremendous skills in the industry.” Diaque says he would like to think the award is a recognition of both Intercap’s good investment results over a long period of time and the firm’s efforts to treat its clients and peers with fairness and transparency. As for the coming months and years, Diaque says Intercap’s immediate plans don’t involve any major changes. “We have already made quite few adaptations in terms of staff and service providers in order to comply and conform to the new regulatory demands as well as the growth in our business. “It is probably also true that fortunately we started early and have steadily grown to a comfortable size in terms of assets, which allows us to absorb the new demands and challenges.” n Company: Intercap Website: www.intercap.com.mx Fact File Best Multi strategy Approach to Investing – Mexico
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