• Home
  • About Us
  • Contact
  • Your Account
  • Subscribe
No Result
View All Result
Monday, February 6, 2023
Alternatives Watch
  • Hedge Funds
    • Manager News
    • Mandates
    • Service Provider News
    • CTAs/Managed Futures
  • Private Equity
    • Manager News
    • Mandates
    • Service Provider News
  • Private Credit
    • Manager News
    • Mandates
    • Service Provider News
  • RE/Infrastructure
    • Manager News
    • Mandates
    • Service Provider News
  • Investor News
    • Endowments and Foundations
    • ESG
    • Pensions
    • Platforms
    • Consultants
  • Research
    • Investor Scorecard
    • Manager Scorecard
  • Subscribe
  • Log In
  • Hedge Funds
    • Manager News
    • Mandates
    • Service Provider News
    • CTAs/Managed Futures
  • Private Equity
    • Manager News
    • Mandates
    • Service Provider News
  • Private Credit
    • Manager News
    • Mandates
    • Service Provider News
  • RE/Infrastructure
    • Manager News
    • Mandates
    • Service Provider News
  • Investor News
    • Endowments and Foundations
    • ESG
    • Pensions
    • Platforms
    • Consultants
  • Research
    • Investor Scorecard
    • Manager Scorecard
  • Subscribe
  • Log In
No Result
View All Result
Alternatives Watch
No Result
View All Result

Alternatives Watch 2022 Outlook: Varenne Capital

Alternatives WatchbyAlternatives Watch
February 10, 2022
in Hedge Funds, Manager News, Open Access
Alternatives Watch 2022 Outlook: Varenne Capital
ShareTweetShareSendSend

In our third installment of our Alternatives Watch Outlook Series, we get the view from Europe with Giuseppe Perrone, president and investment committee chair of Paris-based Varenne Capital.

The $4.3 billion firm’s investment strategy includes four investment frameworks: long equity, short equity, merger arbitrage and tail risk hedging. Founded in 2003, Perrone, Marco Sormani and David Mellul, Varenne has experienced asset growth due to asset flows and strong performance this past year.

The firm aims to apply private equity-style due diligence to fundamental analysis of public equities. Varenne Capital takes pride in generating all research internally, utilizing expert networks, without relying on any brokers’ research.

Here, Perrone walks us through what investors can expect this year when it comes to equity investing.

Series Sponsors

Ancram
Close Group Consulting
InSync Analytics
Tannenbaum Helpern Syracuse & Hirschtritt

Over the next 12 months, how are you preparing your portfolio for interest rate hikes and market volatility? What is top of mind?

We believe that volatility levels will pick up in the next 12 months. As a long-biased investment manager, we embrace market volatility at Varenne as generally this environment provides a good entry point for “quality growth” companies on our screen.

Regarding our Long Equity portfolio, we remain focused on highly cash generative, profitable companies with little or no debt. We never invest in unprofitable or highly indebted businesses, which are the ones most affected by rising interest rates. Volatility can be a source of opportunities for long and short equity as well as a major one for merger arbitrage strategies as spreads normally widen when volatility increases.

For interest rate hikes, we don’t want to second guess how many times the Fed and Central Banks will increase the interest rates, but we have implemented call options on large European banks in order to capture the potential benefits of interest rate hikes. We initiated these positions in Q2 2020 when the European banks were trading at distressed levels (less than 0.4 times price to book) and we have adjusted to restrike these options a few times over the last few months.

As we approach the third year of the pandemic, what are your thoughts about the macroeconomic picture?

The economy remains strong on the heels of sustained consumer demand and investments. The fiscal stimulus started to have impacts on infrastructure. Green Energy transitions can be seen in every corner of the world.

Service sectors will still be a laggard, depending on how COVID evolves but we see upside on that front in the second half of 2022.

We will need to monitor inflation, but it is the Central Banks’ job, and as long as inflation is demand-related, it will be a positive. If inflation is driven by the supply side, we have hedges in place in our portfolio to hedge against the resulting inflationary shocks.

What role do you see hedged strategies playing in across the alternative investment arena in years to come? Is there still room for hedge funds as an asset class to grow?

We definitely believe that hedge funds will provide a valuable component of clients’ portfolios for years to come. Many hedge funds or long/short funds suffered in the recent years especially on the short side, as the loose monetary policy by central banks and the availability of credit enhances artificially the solvency of the companies that could potentially be short candidates at normal times.

Obviously, many hedge funds failed to provide added value against their expensive fees vs passive solutions or ETFs, but there are talented hedge fund managers who continue to deliver excellent performance, particularly during market turmoil when clients are seeking investment solutions to protect against the permanent loss of capital.

Furthermore, we anticipate market returns to be significantly lower in the years to come and this should help build demand for alternatives.

ShareTweetShareSendSend
Previous Post

SoCal VC firm Morpheus closes second disruptive tech fund at $200m

Next Post

Harrison Street raises its largest European fund

Related Posts

CalSTRS promotes for private markets
Pensions

CalSTRS promotes for private markets

Singapore's GIC partners for $15bn managed net-lease REIT deal
Real Estate/Infrastructure

Singapore’s GIC partners for $15bn managed net-lease REIT deal

March Capital raises Fund IV
Manager News

March Capital raises Fund IV

UBP partners with credit firm to widen its liquid alts platform
Hedge Funds

UBP partners with credit firm to widen its liquid alts platform

Bridgewater names Karniol-Tambour as co-CIO
Hedge Funds

Bridgewater names Karniol-Tambour as co-CIO

Next Post
Harrison Street raises largest ever European fund

Harrison Street raises its largest European fund

Log In/Out

Lost your password?

Search the AW Archives

No Result
View All Result

Recent News

CalSTRS promotes for private markets

CalSTRS promotes for private markets

Singapore's GIC partners for $15bn managed net-lease REIT deal

Singapore’s GIC partners for $15bn managed net-lease REIT deal

March Capital raises Fund IV

March Capital raises Fund IV

UBP partners with credit firm to widen its liquid alts platform

UBP partners with credit firm to widen its liquid alts platform

Be an Alts Insider

Sign up for your FREE daily alts news briefing

Subscribe

Subscribe to AW
Alternatives Watch

© 2019-2022, All Rights Reserved  |  BMV Digital

Navigate Site

  • Hedge Funds
  • Private Equity
  • Private Credit
  • RE/Infrastructure
  • Investor News
  • Research
  • Subscribe
  • Log In

Follow Us

No Result
View All Result
  • Hedge Funds
    • Manager News
    • Mandates
    • Service Provider News
    • CTAs/Managed Futures
  • Private Equity
    • Manager News
    • Mandates
    • Service Provider News
  • Private Credit
    • Manager News
    • Mandates
    • Service Provider News
  • RE/Infrastructure
    • Manager News
    • Mandates
    • Service Provider News
  • Investor News
    • Endowments and Foundations
    • ESG
    • Pensions
    • Platforms
    • Consultants
  • Research
    • Investor Scorecard
    • Manager Scorecard
  • Subscribe
  • Log In

© 2019-2022, All Rights Reserved  |  BMV Digital

Be an alts insider

Start your days in the know with our free newsletter

No, I don't want to be an alts insider

Thank

You!

Follow us
on LinkedIn

Lost your password?

Cookie Consent
We do not use cookies on our website other than those that are strictly necessary for the website to function. By clicking “Accept”, you consent to the use of all six strictly necessary cookies.
Do not sell my personal information.
Cookie Settings Accept
Manage consent

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
CookieDurationDescription
cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Save & Accept
Powered by CookieYes Logo