Ellis: Man Group Caps Strategies at the Lower of PM or Management Limits
Luke Ellis · Luke Ellis – The Man Behind The Man Group (Capital Allocators, EP.214) · Sep 20, 2021 · at 36:42
Luke Ellis, CEO of Man Group, details the firm's strict process for closing investment strategies when they reach capacity.
0:00 / 0:14exact quote · 14.5s
720p mp4 · rendered on demand · StarZero watermark
“Everything has a capacity constraint, and we shut them at the lower of the number the team thinks it's starting to affect the way they're investing, or we as management think it's the lower of those two.”
quote is from the automated transcript, cleaned for reading: filler sounds and stutters are removed, nothing is rephrased. names can be misheard (the analysis reads context, assessments check outside sources). how →
More from Luke Ellis
Ellis: Man Group refuses fee structures taking 60% of alpha
“I firmly believe that the client needs to get the majority of the returns needs to get the majority of the alpha. And so we won't do something which while it might make a net return for the client that the client might be interested in, but where 60% of the al…”
Ellis: Strategy alpha degrades non-linearly and collapses off a cliff
“What I experienced in investing in funds is alpha maintains much more than people expect for a certain period of time in a strategy, certain size growth in a strategy. But once it starts to drift off, it collapses and goes negative. And once you fall off the c…”
Ellis: Unconstrained AI in financial markets reliably overfits on noise
“In financial markets, the vast majority of what happens is just noise. And so you have to be very careful to not try to find a signal in the noise when there isn't one. We've had some real success doing things with machine learning and AI, but equally we've se…”
Ellis: Only roughly 1,000 credible hedge funds remain globally today
“The days of talking about 10,000 hedge funds are over. I don't know what the right number today is, but the reality is that probably there's a thousand credible hedge funds out there, and the top hundred have a significant proportion of the assets.”
Ellis: Allocators shouldn't pay active management fees on long-short equity beta
“So I think if you run an equity long short fund, and you run with a 60% net long all the time, you ought to not charge any fees, or clients should look at that and go, ok, I'm going to work out the fees on the alpha You make, and I'm going to net out the 60% t…”