2014 might be behind us but it is a year to remember for Kairos Multi-Strategy. Indeed, in 2013 and 2014, the Kairos catalogue’s absolute return fund boasted total net returns of 20% (class I) and low volatility, while its benchmark (the HFRX Global Hedge Fund index in Euro) reported only +5.2% in the same period.
These results made Kairos Multi-Strategy the best multi-strategy fund and best fund of the year according to the prestigious Hedge Funds Review, which every year picks and awards the best and most innovative products on the market.
The Fund’s manager, Michele Gesualdi, primarily attributes this achievement to the management style: “In keeping with the Fund’s mandate, we have maintained an approach that is focused on limiting losses, while taking sufficient risks to generate performance. After a strong 2013, we were prepared to meet the challenges of a rockier year: this is why we opted for unusual stories, which we then calibrated considering the market context”. This included intuitively picking Japan, a choice that proved savvy, particularly in the fourth quarter when it was appropriately exploited through the alpha of the underlying managers and the short exposure to the Yen. This was a strategy used by few and the result of in-depth familiarity with the Asian context and dynamics.
In a year in which the hedge fund world met with various difficulties, Kairos excelled by betting on the weaker themes. In addition to this, its credit strategies were fruitful: “We completely sold our exposure at the start of 2014, generating a gain, which on the one hand enabled us to avoid the losses that arose from September on, while allowing us, on the other, to use the resources in more promising areas”.
The Hedge Funds Review awards highlight the success of previous choices, but what does Kairos have planned in order to achieve future objectives? Gesualdi explains that after two years of rallies, the time has come to reduce the position in Japan, while interesting expectations have arisen for Europe: “This is an extremely limited area in terms of competition, with a very small number of well-managed funds”. The US offers stories that have not yet expressed their potential, but in general we need to be wary of shocks. As always, we are striving for a continuous balance of protection and investment.