Barry Norris, CEO of Argonaut Capital, was on a beach vacation in the summer of 2008 when he received a call from one of the hedge fund’s investors, furious about the weekly performance.
“At the time, I was managing a long-term fund. The investor said the fund had had a terrible last week and I responded, “I’m on vacation.” He paused and said, ‘Remind me not to invest in your fund when you’re on vacation,'” Norris said. Financial news.
Norris, who founded London-based Argonaut Capital in 2005, likens money management to the nervous thrill of a roller coaster ride. But he says that while the risks of wild theme park rides are obvious to most, “you don’t really hear about the bad sides” of money management.
This includes its effects on people’s mental health. The $5 trillion hedge fund industry is known for producing star portfolios ready to fight in a high-octane environment, no matter the cost. But while the struggle to achieve consistent returns can yield positive results in fiscal performance, it often means declining mental health.
“Some people become depressed when they don’t do well. We had very short careers in hedge funds, when people had the backing of big names but ended up blowing up,” says Norris.
To avoid the all-too-familiar pattern of managers working beyond normal working hours, Argonaut Capital has a hybrid work culture. Employees are not required to come to the office every day of the week, and Norris himself only comes to the office for meetings.
“The pandemic has changed a lot of things in terms of work culture. If Londoners can work from home, everyone can work from home. I only go to the office when it’s really important. I don’t need a lot of people around me. I think it’s a constraint on productivity,” he says.
“I have four children. My youngest child is three and I wake up when she wakes up. I’m not someone who goes out every day, partly because of the kids, but I also prefer to stay home with my family,” Norris says.
However, he admits: “I don’t have a work-life balance, but I’m trying to create one. »
Setting up a gym in his home is partly an effort to balance his work and personal life: maintaining fitness is crucial to his daily routine, he says.
In a year that has so far seen a slowdown in deals rather than the “green shoots” bankers talked about last year, the topic of resources going into research is of growing concern. In the current context, discussions about fees are becoming thorny. Substantive Research recently surveyed 40 asset management firms overseeing more than $12 trillion and found that the average research budget decreased by 6.5% in 2023.
But Norris says conducting your own investment research is key to strong performance because it helps managers with decision-making.
“I do my own analysis. If you have a macroeconomic view, stock selection becomes easier,” he explains. FR.
Norris says it’s important for fund managers to go through ups and downs to become more successful. He experienced a bit of both, losing money in two years and turning a profit in 11 years.
“You have to be 100% in control of the decisions because you are the product and your reputation is on the line,” says Norris.
Norris likes to think of himself and hedge fund managers like him as part of the answer to bad governance.
“In the Wild West, if the regulator is a sheriff, the short sellers are like deputies. Without short sellers, it is difficult for regulators to combat market abuse,” he says.
He believes that short selling has exposed several bad business models around the world.
“Shorting is important for generating uncorrelated returns. The value of uncorrelated returns is underestimated in our industry. Short sellers keep the market efficient and balanced,” he explains.
Norris also has a passion for speaking out against issues occurring in the marketplace. Take ESG, which he spoke about. ESG has done nothing to improve corporate governance, he says, even though several funds focused on these indicators “claim to have improved corporate governance by checking a few boxes.”
“The people who give ESG ratings don’t do any research,” he adds.
The comments are stark, at a time when around 89% of UK companies use ESG measures to reward their leaders, according to data from Willis Towers Watson.
He also has a problem with cryptography. “Bitcoin and other cryptocurrencies have no real value,” says Norris.
But he believes that the face value of bitcoin will never fall to zero due to the demand for money laundering.
“Crypto is a massive scam and a massive Ponzi scheme,” says Norris. “Hedge funds, banks and asset managers are turning to crypto because they believe they can profit from it. There will be use cases for money laundering in the future and that is why crypto will continue to exist,” he adds.
The brick-and-mortar world is more appealing to Norris. He said London remains a dominant force in fund management, with a large talent pool. But he warns that other regions are emerging to give the City tough competition.
Hedge fund talent is moving from traditional financial centers such as New York and London to destinations like Dubai.
Salmaan Jaffery, Director of Business Development at Dubai International Financial Centre, said: FR As of last month, 45 global hedge funds were awaiting regulatory approval to operate freely in the region.
“Hedge funds are a competitive industry. If you’re not already based in London, you’re less likely to open a fund management company in the City because there are so many other locations emerging,” he explains.
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Oxford in 1974
BA (Hons) in History, University of Cambridge
MPhil in International Relations, University of Cambridge
Founder and CEO, Argonaut Capital
Manager, Neptune European Opportunities Fund
Analyst, Baillie Gifford
To contact the author of this story with comments or news, send email Bilal Jafar