DeGiro aims for Banco de Madrid
DeGiro is hard to ignore. Every other day in the news in their conquest of new markets and connecting to exchanges.
Latest news is they aim for a takeover of a part of Banco de Madrid. The Spanish bank is in trouble after a bank run and the brokerage part, Interdin, is owned by the bank. Watchdog CNMW is guarding the unit. Clients can’t open new positions. Thing is DeGiro isn’t aiming for a full acquisition.
DeGiro won’t pay one peseta for Interdin. Offices, employees, brand name : not interested at all. The company logo reminds me of some US financial institution. Only the clients are welcome at DeGiro’s systems. After all they need to move somewhere. Interdin will be closing shop.
DeGiro to connect to TOM
Back to the Netherlands. After the trouble with TOM’s not-so-Smart Order Router end of last year, this may come as a surprise. But as it’s strictly a business decision, DeGiro will connect to TOM’s option market.
Wasn’t DeGiro in bed with Euronext? Yes, they are. But connecting to TOM isn’t the final blow to Euronext I assumed it to be. They will connect only to the market, not to the TOM order router. Clients will have the choice to execute their orders on TOM or Euronext. Just like Interactive Brokers has connected to TOM.
The quotes on TOM are at best the same as the quotes on Euronext. Same spread, same size. As long as there isn’t any benefit in terms of lower fees most orders will be send to Euronext. Why connect to TOM in the first place? TOM can in theory have a better price in the market when there’s a retail limit order in front of the book. When DeGiro connects with TOM, their retail investors can trade against Binck’s retail investors. It will take a while.
ESMA on Automated Trading
Not sure how many trades between retail investors happen on the option exchange anyway. Guess at least 90% will trade against market makers. According to this new ESMA pdf some 60% of the Dutch stock and option market is done electronically. Can’t find a definition, other than a claim it’s an estimate.
If anybody is able to read the ESMA document and reads anything interesting, please tell me. Experienced it as a very, very boring read. Only thing I read in the document is Europe is a very fragmented place. Don’t need 70 pages to come to such a conclusion.
how’s degiro going to take over interdin clients without paying any money, get their email list and send them teaser emails?
esma pdf is a long drawn 70 page story purely because there is some euro type bureaucrat who is getting paid to do it, and thus lies the point, euro area miseries are here to stay
What’s happening to Degiro’s hedge fund (hiq market neutral investment fund). Long equity and long bonds > 100% of AUM, yet they lost almost 10% in the first two weeks of March. Should I move my money back to broker Alex? They need at least a year to lose that much.
with aum 85m, maybe they dropped a lot on mis-trade, or some large spread widening, when does their next investor communication set-up, what’s their investor relation saying, you are not a sophisticated investor if you are asking such a basic question on this forum?
http://www.hiqinvest.com/HiQ_2015_03.pdf
https://www.linkedin.com/pub/remich-hendriks-caia/5/a72/2b7
how do u know they dropped 10% in two weeks?
I am sophisticated enough to know that their AUM isn’t anywhere close to 85m anymore and hasn’t been in ages.
As for knowing they dropped 10% in two weeks, they post the NAV every two weeks. Didn’t require a lot of sophistication then to draw that conclusion after looking up the last two numbers, now does it?
did you click the link
http://www.hiqinvest.com/HiQ_2015_03.pdf
it says 85mil at the bottom left of first page?
Looks like you are a seed investor and jealous at the fund having made this far, is schadenfreude sophisticated enough for you?
be a man and move on already, life’s too short to look at others to decide how happy, healthy and wealthy you feel about your own miserable existence?
I am reading these comments and I don´t understand the accusations of jealousy. Maybe I’m missing something but what is there to be jealous of?
The guys behind HIQ (the same people who set up Degiro I believe) set up a fund that’s been performing poorly for at least 3 years: an aggregate loss over this period. Their investors would’ve been better off had they put their money under their matrasses. As such, I certainly don’t feel envious of anyone who invested in the fund during this timeframe, let alone jealous (which is a nasty word btw).
As for the founders: since its inception, their company – that operates the fund, is paid management fees and pays for the staff – has made about half a million euros in combined profits. Across what is it 8 years and 5 partners, that’s not a lot of money in this industry. In any event, not something I am particularly envious of. Source Capital probably made more than that 😉
HIQ employs about two dozen people. I applaud them for that. Not a cause for jealousy though. V&D employs thousands of people and I applaud them for that. Not a cause for jealousy either.
By industry standards, HIQ’s fund is small and insignificant (as is any hedge fund with AUM < 100 million). Once more, nothing to be envious of. The world is littered with small "hedge funds", most of them will be gone within five years, to be replaced by equally small new HFs, rinse and repeat.
I would appreciate your clarification of what there is to be jealous of in the case of HIQ.
the idea of jealousy comes from the fact that a sophisticated investor is asking a very basic question on this forum, in fact he is not asking the question at all, he knows the answer already, he is trying to publicly berate hiq, possibly because of jealousy?
you don’t feel envious off the investors, you feel jealous off the hiq market neutral who is still collecting 2 and 30 after this under-performance, their small cap fund is not lagging?
but having said all that, you made some very good points and i can appreciate why you think its very hard to be jealous of hiq, but not everyone is logical like you, there are some very low life living amongst us, you have to get down to their low level thinking before u can start getting jealous of all things hiq!
Hold on now, March 27 3:12 PM did not call himself sophisticated did he? There are entire threads on this blog based only on hearsay at best, such as the “rumors” about Source Capital in relation to the EUR/CHF move. No one accuses any of these folks of jealousy.
When there is hard evidence that something has gone awry in a fund that operates much like the prop trading companies that are the typical topic of conversation on this blog – i.e. HIQ’s 10% loss in just 2 weeks – that seems worthy of discussion don’t you think?
The suggestion that a sophisticated investor should inquire with the HIQ spokesperson instead I find rather naive. I stopped reading their newsletters long ago. Every month that they posted a loss, they would write some bullshit about how their spread positions had not “matured” yet, that there was still a lot of potential in these positions, that all the losses would be recouped etcetera. Most of the time, this did not seem to happen, because the fund is showing a substantial loss over the last three years. Those are simple facts.
Their small cap fund has something like 2 million USD under management. It is not even worth the “ink” of discussion on this blog, please!
As for collecting “2 and 30”, maybe I’m wrong but essentially they’ve been collecting “30” of nothing for about 2 years. That leaves the 2. With their (limited) AUM, it does not cover their running expenses it seems. And any time the fund takes a hit, so does the company. The company that operates the market neutral fund, i.e. the one charging the 2 and 30 and paying the rent over at the Herengracht and the salaries of its employees, has been showing significant losses in the region of 500k in 6 months. I’m afraid that poses a genuine problem for the fund operator. By now, they need *significant* returns before they can start charging the 30 again, due to the high watermark.
Now HIQ is somewhat unique in the HF industry in that they have reserved the right to reset (i.e. abandon) the high watermark in January of every year. They had to do just that in 2009 in order to keep their business up and running. If HIQ would find themselves forced to do so again, next year, or the year after, or in the foreseeable future in general – because the 2 isn’t enough – I’m afraid that could be fatal for their ability to attract new investors and grow to the 1 billion AUM that they predict in their due diligence questionnaire. Because sophisticated investors (and admittedly I am not one of them, let that be clear!) won’t even entertain the thought of investing in a struggling fund that resets the high watermark.
So really HIQ is looking at a catch-22. If they don’t start performing again quickly, the 2 might not be enough to cover their running costs. But in order to perform, they need to place big wagers, which may backfire as hinted by the recent dramatic loss.
Count me as one of those who is not jealous of HIQ’s 2 and 30 in relation to their costs & high watermark.
For sure, the months ahead will be interesting for the people running HIQ, its investors and its followers on this blog.
One more thing about HIQ’s 2 and 30 structure. There was an interesting discussion the other day about some of HIQ’s local rivals seeking to shake up the industry in much the same way that Degiro wants to disrupt the brokerage industry. Specifically, the “WinCap Fund” intends to reduce its fees as the AUM grows. Makes perfect sense to me. HIQ was quoted as one of those who wasn’t pleased with this development (which came in the midst of HIQ’s losing streak, we now know). Meanwhile another Dutch HF, the “Done Fund”, confirmed that once a fund has had to close up shop due to poor results, the people behind the fund have very little chance of starting over on account of the memory of investors. I thought it was an interesting discussion and had hoped that it would be picked up for an article by Jack. I don’t know much about WinCap and Done and they haven’t been around as long as HIQ, but their results sure put those of HIQ to shame.
Discuss.
http://fd.nl/beurs/1094971/nederlandse-hedgefondsmanagers-stellen-eigen-beloning-ter-discussie
“Jasper Anderluh van HiQ Invest, sinds 2007 actief, voelde woensdag duidelijk niet voor het verlagen van de beheervergoeding: ‘Je koopt een strategie. Ik heb de beste mensen in dienst, die ook ergens anders aan de slag kunnen tegen een hoog salaris. Dat moet betaald worden.’ ”
Met zulke boude uitspraken versus een negatief rendement in werkelijkheid moeten de heren van HiQ er rekening mee houden dat de bal teruggekaatst gaat worden en kritiek kunnen verdragen. Als er prijzen zouden worden uitgereikt voor hoog van de toren blazen zou HiQ / Degiro met goud naar huis gaan.
wow, you got a lot of time to waste writing on this blog, it’s weekend, go unwind yourself somewhere peace and quite
3:12 PM might be sophisticated or not, who cares?
hiq’s loss is not worthy of discussion before their investor communication is out
if the fund hasn’t performed in a long while, get out already, you don’t need to ‘discuss’ them on this stupid blog
where does it says aum 2 mil for small cup fund?
if their running expenses are higher than what they can collect from the shrinking fund, then they need to shift their focus to another business and thus degiro, that seems smart move?
why don’t you qualify as ‘sophisticated investor’?
as for hiq like funds, this has been well known now for years, the move towards mega aum funds like blackrock, blackstone, bridgewaters; hiq types winding down have been predicted for years now, what’s new?
can somebody post the text for this link
http://fd.nl/beurs/1094971/nederlandse-hedgefondsmanagers-stellen-eigen-beloning-ter-discussie
” Jasper Anderluh of HiQ Invest , active since 2007 , did not clear Wednesday to reduce the management fee ” You buy a strategy. I have the best people, which can also somewhere else to work at a high salary . That must be paid. ‘ ”
With such bold statements versus negative returns in reality , the lords of HiQ keep in mind that the ball is going to be reflected and criticism can tolerate. If prices were to be awarded for the high tower blow would HiQ / Degiro with gold go home.
if the best people need to be paid best salary, then that is only possible with the best management, clearly hiq’s management has failed at it and so hiq best people now need to send their resumes to wincap and done, anything else or can we pls move on from a meaningless small hf
When we combine Done, Wincap and HIQ we got a team that consists of Ian, Iwan, Gijs….. sounds like a dejavu……..
it’s a small country, with an even smaller time mentality
http://nl.wikipedia.org/wiki/VOC-mentaliteit
http://fd.nl/beurs/1100120/reclame-code-commissie-degiro-niet-zomaar-80-goedkoper
anybody want to post the transcript for this?