Alongside the countless investors worldwide, the firm’s recently established proprietary securities business faces its first crucial challenge. As the markets crack further into the global sovereign financial turmoil, the firm liquidates its heavy long positions in emerging markets Eurobonds, takes losses, and learns the lesson. As the markets behavior to a large extent resembles western action movies, we stay away from liquidity risks and concentrate on spotting individual short-term trading opportunities. The display of risk trading discipline ultimately produces the effect – the company remains solvent, and moves forward.Close
The roaring 2000s brought in a new paradigm – when the market bulls or bears start running, the rush spreads out across asset classes that should remain unaffected according to the classic economics as we learned it. To make things worse, the rush goes in the same direction. While equity investors ride US stock rallies, we keep taking advantage of emerging markets debt’s positive performance. The firm also launches regular stock trading, complimenting its core fixed income business. We witness all forms of what former Fed. Chief Alan Greenspan dubbed “irrational exuberance”, see it in action, and, admittedly, take an active part in it.Close
We lose friends in both towers, and grieve alongside colleagues. September 11 also hammers everyone invested and turns into the ultimate test of the individual investor’s strengths and weaknesses. The issue that revealed itself on that unforgettable day was that we must be prepared to deal with an unexpected and instantaneous asset price stress. This sharp awakening shifts the market’s peaceful state of mind toward higher risk awareness. It makes us more aware as well. The company continues to push itself towards higher global portfolio diversification. Hedging strategies are developed to exercise more control over macro exposures.Close
Oil matters have always been a catalyst for investing. The firm tries to stay away from the popular Mid-East-originating oil bets that dominate the market sentiment. We set up an affiliate to diversify revenue sources and counterweigh our bond and equity portfolios’ market exposure. The Schildershoven Group corporate finance and M&A business focuses on the publishing, telecoms, bio-tech and medicine manufacturing sectors.Close
As the financial industry pays its price for relying on poorly understood asset classes, a lack of realism, and a gross negligence of its own self-sustainability, central banks worldwide start pouring new money into the flaming bank balance sheets. The squeezed liquidity drains financing to the real economy, and the firm abandons its involvement there following a final US$200 million M&A deal in Russia to re-focus on international capital markets again.Close
The influx of cash to the financial sector creates enormous price distortions across the capital markets between “risk-free securities” and low grade debt. Fixed income experiences an enormous revival with investors switching from stocks and debt derivatives to “plain vanilla” bonds. The firm takes the challenge and seeks to create its own ways to deal with the reality of the increased credit risks and the suppressed returns. We choose to develop our decade-long experience in credit risk assessment and concentrate on seeking value in corporate bonds worldwide, putting forward fundamental and credit analysis to construct HY and EM bond portfolios and advise on absolute return strategies there. The firm revises its proprietary business model to capitalize on its extensive market skills and developed infrastructure by offering it to institutional investors internationally. Aiming at establishing a fully-fledged investment advisory service, the Group expands it physical presence with its regional offices in New York, Almaty and Singapore, and develops trading relationships with the local “real-money” investors and liquidity providers worldwide. The firm’s trading turnover exceeds US$ 5 billion.Close
The Eurozone crisis proves the firm’s fundamental approach to investing – instead of selecting higher returns (hence the higher risks) our advisory portfolios are built with a pipeline of well-diversified event-driven investment ideas that are rotated regularly to achieve double-digit US$ returns without running excessive risks on investment concentrations. Additionally, global diversification helps us shield ourselves from the affected region.Close
The litmus test for investment strategists and their risk managers. The U.S. downgrade has a tsunami effect on the markets much like 9/11 – the consequences of trouble affecting global credit, which was widely identified but not priced in, catches our fingers half-way to the trading buttons, no matter how close they are. However, its impact on the primary markets was not as devastating as the shockwaves sent by the Greek restructuring soon after. Again, the firm’s global credit expertise helped feed the advisory portfolios with investments which have limited exposure to the European deadlock. The double trouble leaves the primary markets dead and secondary activity much devastated with many investors leaving the market after wave after wave of redemptions.
The Basel III standards knock major market-makers out of place with their risk-averse policies and thin flow books fail to support the necessary level of liquidity for the real money clients. The firm’s well-established global counterparty network helps investors maintain adequate alternative market access to facilitate trades. The firm’s in-house investment research continuously compliments its clients’ capability to identify opportunities in Asia/Pacific, CEEMEA and the Americas.
The moment of truth for many investors, who compromised on prudent risk control in their belief in a Greece-like Cyprus bailout. The saying “not all gold that glitters” is nothing new, but this is what we must duly remember when we critically analyze a potential investment in a HY bond. The challenge of developing own credit expertise that we took more than a decade ago, makes us deservedly proud of the results. Schildershoven’s consistency and commitment to improving its investing process is rewarded with double-digit returns on investments that we both identified and realized... all on our own. Our regional office in London opens.Close
In the wake of yet another wave of tremors that the plunging commodities and deteriorating credit quality sent across the markets, investors increasingly need sophisticated regional and sectoral diversification.
In October 2014 the company launched the advanced HY product – Schildershoven Global Bond Value Harvester certificates, very convenient tool for investing in global HY market with a wide diversification. Despite the launch in turbulent times, the product has been outperforming benchmarks and peers in terms of absolute and risk-adjusted returns. The company actively develops its asset management in respect to product lineup, and its AUM has tripled in less than a year