A sinking HiQ and 80%
Small post on the sisters HiQ Invest and DeGiro – both independent of each other but having the same parent company.
The sinking HiQ
First of all the hedge fund HiQ Invest. Founded by some former AOT traders, they received pretty good press after performing nicely in the first few years. Especially while carrying very low assets under management, some good returns have been reported (2009 in particular was good). Even won some awards a few years ago. At least they still have the pictures.
Year on year loss of 20%
Things have turned for the worse now. Last month the HiQ Invest Market Neutral fund reported a staggering loss of 8.56% in a single month. Norwegian bonds, soft commodities and vol-arb dragged down the fund. Every hedge fund has it ups and downs, but the downs outnumber the ups by wide margin. Over the last twelve months less the fund has seen a loss of over 20%.
Apart from investors withdrawing their money (at 1% cost), such a loss is killing for the fees. HiQ charges 3% management fee and 20% performance fee. But due the high watermark those performance fees won’t kick in in the foreseeable future. What to do? Gamble high stakes to get in green territory again or just live on the management fee? The tone of their monthly report (nl) suggests the last option.
DeGiro isn’t 80% cheaper
DeGiro advertised with “80% lower fees than competitors”. This may be true compared with the former discount broker Binck. However, you can’t be 80% cheaper in everything compared with all rival brokers.
Lynx, an Interactive Brokers clone, decided to take the issue to court. In The Netherlands we have a “Reclame Code Commissie”, an institution where you can complain about unfair commercials. Lynx did and won. The Reclame Code Commissie decided the slogan “DeGiro 100% broker, 80% cheaper” was misleading. DeGiro isn’t 80% but 70% less expensive compared with Lynx brokers (link, nl).
Lynx twice as expensive as DeGiro
Unbelievable. Lynx wants to have attention to the cold fact they are more than twice as expensive as DeGiro. A wet dream for every marketeer. Free commercial for DeGiro.
Nothing new here. See
http://www.amsterdamtrader.com/2015/03/degiro-aims-for-banco-de-madrid.html#comment-23668
It’s especially easy to generate seemingly impressive returns against small AUM when you’re deploying non-scalable arbitrage strategies. As such their 2009 result (when AUM stood at well below 10 million) is rather meaningless. More telling is the fact that they lost 30% in a single day when they had a shitty short Volkswagen position in September of 2008, when the stock rose to 300 euros and their broker liquidated their position. A month later VW shot up to 1000 euros. In a way they were lucky their broker had saved their asses a month earlier, their would’ve been wiped out completely within a year since inception. The recent loss tells me that they still bet the farm. Thanks, but no thanks, That’s not my idea of a market neutral fund.
I love it when positions blow up and people refer to them as “volatility arbitrage strategies”. My definition of arbitrage presupposes a profit.
As for the award that they “won”. Everyone knows this is about how much money you spend greasing the company awarding the prizes. I’ve never heard of this award but I know some guys who won in another category and they have yet to post a positive return in a given year, so there!
It’s doubtful the management fees are enough to float their boat. It wasn’t enough in 2014 when the management fund suffered a substantial loss. And AUM was noticeably higher back then. Do the math for this year. But Jack is right, they’ve dug themselves into a hole and it’s going to be tough for them to dig themselves out.
70% cheaper would make DeGiro more than three times as expensive if I’m not mistaken? Honestly, Lynx doesn’t care about the supposed free publicity. As was reported by the fd newspaper last month, Dutch brokers are barely losing clients to De Giro. It’s no wonder De Giro has yet to announce their market share and the size of their customer base. They keep saying that “next year” they will overtake Binck. “Next year” they expand to the UK, Scandinavia, Venus and Mars. Yada yada yada.
http://fd.nl/beurs/1096355/onlinebrokers-staken-hun-prijzenslag
how hard is it to make money during QE, just sit long, everything, is this too hard, we had three rounds already of it in US, for 6 straight years, can it get more obvious?
20% down years are fine if you can pull up a triple digit gain to follow those
arbitrage is used only very infrequently for riskless spreads, so that’s just the name of the game, some times spreads don’t mean revert, that’s why trend following works
anybody got a transcript for http://fd.nl/beurs/1096355/onlinebrokers-staken-hun-prijzenslag
Illuster gezelschap voor het HiQ Invest fonds tussen de andere winnaars van Sheldon Invest:
http://www.sheldoninvest.nl/Pages/Investeerders/Investeringen/Gesloten.aspx
http://925.nl/archief/2015/04/09/verdien-negen-procent-met-phanos-capital-management-nee-wacht/
Frog Fund is another AOT bleeder
Degiro is cheaper, but it is a piece of crap compared with Lynx/IB.
I use degiro to execute simple orders. Fine with me. Don’t need entertainment from my broker.
wow, in a market place both degiro aka hyundai and ib aka bmw exist, that’s really fascinating market choice
3 and 20??? Are you shitting me? 2 and 20 vanished in America years ago.
we are talking about old skool europe compared to your cutting edge America, genius
It’s 2 and 30, if you can believe that. Although, realistically, with their abysmal performance, it all boils down to 2 and 0 … 🙂
2 and 30 is a bargain for tapping into the WORLD’S BEST traders!
http://fd.nl/beurs/1094971/nederlandse-hedgefondsmanagers-stellen-eigen-beloning-ter-discussie
It’s 2 / 20 I believe, BUT they also have 1 for the costs (bloomberg, lines etc).
So really its 3/20 or maybe 3/30…
anybody got transcript for that
http://www.hiqinvest.com/HiQ_2015_03.pdf
you get better deal if you are willing to lose more
Min. Investment Share Class
B EUR 5.000.000
C EUR 250.000
D EUR 2.500
Management fee 2% per annum
Performance fee
(B) 20%
(C) 25%
(D) 30%
Hey! Anonymous! Are you completely lacking in balls/ovaries? What’s your name, coward? My name is Randall Liss and anything I write has my name behind it.
mr Liss, what are you angry about?
about somebody naming him Randall Liss?
what did you ever do to your parents to have been given this privelege?
Degiro isn’t providing correct information. In Sweden, Degiro charges 20 crowns plus 0.02% per order at Nasdaq OMX Stockholm. In contrast, several Swedish brokers have special price plans which are cheaper for low-volume orders, starting at one crown, seven crowns or ten crowns, and gradually going up to higher amounts. For a really low amount of money, Degiro costs more than other brokers, but Degiro seems to be cheaper for larger amounts of money. Degiro is sometimes also more expensive than other Swedish brokers on other Nordic markets, if the value is low.
Also, Degiro charges fees for various services which are offered free of charge by other brokers:
– “€100 plus other costs” in order to participate at an annual general meeting, but Swedish brokers offer this service free of charge (although some Swedish brokers refuse to deal with foreign annual general meetings, forcing you to move your shares to another broker instead if you wish to participate at the meeting). This cost has also gone up by more than 900 percent recently: it used to cost just €10, without the “plus other costs” part.
– “€2 + 0.02% (minimum €50)” to sign up for rights offerings. Swedish brokers provide this service free of charge (but I think that some brokers might refuse to deal with certain foreign rights offerings).
– €10 per ISIN to transfer securities to another broker. Swedish brokers will also charge for this, but typically a lot less, unless you are trying to transfer foreign securities, which may cost you a fortune.
Sure, the trading fees are not too high, but if you need some of the other services too, Degiro becomes a lot more expensive than other brokers.
who participates in those stupid AGMs?
calculating 900% on 10 euro bases makes you look you are trying too hard or worse don’t know how to use %, you have to let the facts do the talking, not you yourself
An increment from €10 to “€100 plus additional costs” is an increment of more than 900 %. What part of this is it that you do not understand?
There tend to be hundreds of people who attend the annual general meetings of big companies in Sweden. I’m not sure why all of these people attend the meetings, but I suppose that there are several reasons. For example, you make use of your voting rights. Compare with national elections where lots of people use their voting rights to vote for governments.
900% calculation is straight forward, duh
however, calculating 900% on 10 euro base makes you look you are trying too hard or worse don’t know how to use %, you have to let the facts do the talking, not you yourself, What part of this is it that you do not understand?
As for attendance of AGM, your answer is raising more question than answering it, so why don’t you give up already and go to the next AGM and cast your vote already on who is clueless and willing to waste time on stupid AGMs
And again a big loss. When does it end. -11% this month.
it ends with you filing a redemption request, duh?
loosing more than a third of fund in 8 months is actually pretty bad
funds under aum is more than halved, so atleast somebody got the memo and did something about it
this explains de giro, they forgot how to make money, so now they have to earn a living cleaning up after those who know how
This is so pathetic, it’s almost laughable. They haven’t made a f*king dime for their investors over the last 6 years! Criticizing Binck’s asset management (Alex Vermogensbeheer) yet losing far more money themselves. And still calling themselves the world’s best traders. One thing I will give them, their returns are indeed quite uncorrelated to the SX5E.
At the end of last month, the fund operator was predicting AUM to halve this year. They forgot to say whether this is on account of redemptions or their continued dismal performance.
One wonders how much of these losses for the fund can be attributed to their use of their own brokerage Degiro (they are their own and biggest client). After all, since inception they haven’t made it a secret that they like to churn their portfolio as much as they can.
HIQ DUE DILIGENCE QUESTIONNAIRE
CAPACITY MANAGEMENT
Q: What is the maximum capacity of your fund?
A: 1 billion
Q: What is the projected time frame to reach capacity?
A: The end of 2016
(Director Jasper Anderluh, June 2014)
Correction May 2015
A: The day pigs start flying out of Niels’ ass.
don’t call answer of ‘1 billion’ stupid, what else do you expect to hear back
the question about ‘capacity of fund’ is pretty stupid to begin with