GSA hedge fund bucks the trend with £110m payday

The company benefited from the strong performance of flagship funds

Michael Bow
Thursday 14 January 2016 02:07 GMT

A quirky Mayfair hedge fund led by one of the richest fund managers in Britain has split a £110m-plus payday after its computer-driven funds side-stepped wild swings in global markets last year.

GSA Capital, founded by the former Deutsche Bank prop-trading star Jonathan Hiscock, boosted revenues by 25 per cent to £146m for the 12 months ending in March 2015, after the group’s four data-driven funds surged in value.

Eighteen partners, including two entities, shared profits of £112.3m. One of the entities, HFFX, is made up of a team of traders and is thought to have got £54.7m of the money.

The company, which runs $4bn (£2.8bn) for investors and was set up in 2005, benefited from the strong performance of flagship funds GSA International and GSA QMS, which both rose about 12 per cent. Mr Hiscock, ranked as the 20th richest hedge fund boss in Britain with a £250m fortune, has modelled the firm on idiosyncratic tech outfits such as Google rather than traditional finance houses.

The hedge fund hires rarely – 25 people out of 5,000 applicants since 2010, a recruitment rate of 0.5 per cent. Banks such as Goldman Sachs have a rate of about 3 per cent a year by comparison.

The Green Park-based company’s workforce is full of PhDs, mainly in mathematics, including its tech chief called Sorabain Wolfheart de Lioncourt. Mr Lioncourt, who was formerly known as Paul Victor Smith, used to work at rival CQS; he changed his name by deed poll.

GSA has sought to distance itself from its Mayfair peers by ditching performance fees on a low cost fund and charging a flat rate management fee of 0.5 per cent. The GSA Trend Risk Premium fund made returns of about 33 per cent for the year in question, although the impact on the company’s final revenues was small, given the low fees it charges.

Mr Hiscock launched GSA after carving out the Global Statistical Arbitrage unit he ran at Deutsche, taking 15 staff with him. He later recruited David Khabie-Zeitoune, a former equity trader at Brevan Howard, to become chief executive.

Nick Bushrod, GSA’s chief technology officer, is also an old Deutsche hand, and left with Mr Hiscock to set up the firm in 2005.

GSA’s success this year is at odds with some of its Mayfair rivals, which have reported underwhelming profits for the 12 months ending in March.

Brevan Howard, the fund led by the UK’s richest hedge fund manager Alan Howard, split a £120m pot, despite losing money for investors in the year in question.

Odey Asset Management, led by Crispin Odey, also suffered after a big drop in profits from £174.2m to £84.1m.

Hedge funds had their worst year for performance since 2011 during 2015, losing 0.85 per cent over the year.

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