Funds using AI
Several of Lampe’s managers use AI and machine learning. “We view this as a source of diversification even though we are not convinced it will perform better over the long term,” explains Neidig.
He has obtained competitive fees on Tungsten TRYCON, a short-term trading CTA strategy, that is a regular winner of our UCITS Hedge Awards.
The seeding sleeve includes several managers that have featured in SFN’s annual Tomorrow’s Titans reports: Nuremberg-based Artellium, which Neidig co-seeded, applies AI and machine learning to an equity market neutral strategy, FP Artellium Evolution. Daniel Linzmeier’s Ansa – global Q equity market neutral is another equity fund using AI that was partly seeded by Neidig.
Tomorrow’s Titans managers
Neidig was also one of the first investors into Empureon’s volatility risk premium strategy, Empureon Volatility One Fund, whose founders featured in our 2024 Tomorrow’s Titans report. Neidig knew the team well, having also invested in the volatility strategy that the Empureon founders co-managed at FERI. Vienna-based Blue Balance, which trades a unique relative value macro approach in BlueBalance UCITS Global Opportunity Fund, is another award-winning Tomorrow’s Titans manager that Lampe is allocated to.
Volatility and option strategies
Neidig has recently invested in two other relatively new volatility strategies in Germany, one of which is an iron condor options strategy.
Neidig has some appetite for long volatility exposure even if he is not going for fully-fledged tail risk. “Assenagon’s long equity volatility and dispersion strategy can be a useful hedge for equity market drawdowns and is another example where I needed to exercise discretion to override the code,” says Neidig.
He is also researching lower cost volatility risk premium strategies.
Fee discounts and capacity
Neidig acknowledges that smaller ticket sizes can make it harder to negotiate fee discounts but has worked with boutiques where it is easier to negotiate them. “The sweet spot is managers running less than USD 100 million, but we have also got discounts from certain platforms we know well. We have also negotiated institutional share class fees at less than the usual minimum,” reveals Neidig. Sometimes the discount may be only 0.10% and in other cases there might even be a zero management fee for some funds. Early bird discounts can sometimes include zero management and/or performance fees.
Lampe has also sometimes secured capacity agreements and has some exposure to funds that have often been soft closed including Man GLG Alpha Select.
Over the past 17 years, Neidig has discovered far more diversity of asset classes and strategies in the UCITS hedge fund universe than many investors may be aware of. He keeps a close eye on a strong pipeline of interesting UCITS launches from new and old managers with some home bias to the German-speaking countries of Germany, Austria and Switzerland, and Europe within a global purview.
