The Loz 'N' Belly Weekly Podcast From Hedge Fund Manager GLC Ltd. ~ market folly

Tuesday, October 20, 2009

The Loz 'N' Belly Weekly Podcast From Hedge Fund Manager GLC Ltd.

“Loz ‘n’ Belly” are Lawrence Staden and Steven Bell, the portfolio managers of the London based hedge fund manager, GLC Ltd. They provide a free weekly podcast about the state of the markets to anyone prepared to download it. Their presentation style is often humorous, light-hearted and at times they appear keener to talk football and cricket than interest rates and currencies. So are these hedge fund managers - turned radio entertainers - worth listening to? The answer is an unequivocal, yes.

You can download the Loz ‘N’ Belly podcast here. You can also subscribe to the podcast via a feed reader in the normal way as the download is located on their Blogger page linked above. New programmes are usually released on a Tuesday and the latest podcast is readily available now.

Beneath the veneer of banter listeners will find a lot of content and incisive thought. Their analysis of the market since March has suggested that equities would out-perform cash. It has also suggested that any economic recovery would favour the so-called "risk" currencies such as the Brazilian real, Mexican peso and Aussie dollar (Vs Sterling).

GLC, founded by Lawrence Staden in 1992, is one of the oldest hedge funds in London. Staden graduated from Cambridge University in 1982 with a Masters degree in mathematics and as you might expect, he has a particular interest in statistical arbitrage/quant trading. Following graduation, he joined Montagu Loebl Stanley, a UK stockbroker, as an analyst/salesman and later worked for Buckmaster & Moore in a similar capacity. In 1985, he moved to the market-making arm of Bankers Trust International where he traded UK Gilts. In January 1991 he became head of London proprietary trading and head of London analytic research. Staden left Bankers Trust in 1992 to establish GLC.

Steven Bell joined GLC in 2006 as Chief Economist and portfolio manager to launch the GLC Global Macro Fund. Bell holds economics degrees from the London School of Economics and Stanford University. Having been an economic adviser at the UK Treasury, he joined Morgan Grenfell in 1984 to become chief economist. Following the acquisition by Deutsche Bank he was appointed managing director and head of global markets research in 1995. He moved to Deutsche Asset Management in 1999 where his investment team contributed to the Global Alpha Platform (iGAP). Bell’s team was one of the highest weighted teams within iGAP, a reflection of its high investment performance and low correlation. Bell is a regular contributor on national TV and radio and has written a number of articles and books on finance and economics.

GLC has about $1bn assets under management. The biggest fund is the GLC Diversified Fund which is an internal fund of funds consisting of the GLC Gestalt Fund (Long Short Equity); GLC Behavioural Trend Fund (CTA); GLC Directional Fund (CTA); GLC Global Macro Fund; GLC Managed Futures Fund and the GLC Carry Trade Programme. The Diversified Fund has produced outstanding returns (see table below). Unlike many other statistical arbitrage operators, GLC’s strategies proved to be robust during the credit crisis with a remarkable 25.7% return in 2008. Interestingly though, despite the outstanding performance, they still suffered redemptions. Staden says that hedge fund investors used GLC as an ATM cash machine during this period as many other funds locked up investments. GLC did not use any form of gate and provided monthly liquidity to all investors throughout the crisis.

GLC Diversified Fund Returns

2005: 6.5%

2006: 30.5%

2007: 18.9%

2008: 25.7%

2009: 10.8% YTD

That ends our first look at the London based hedge fund manager, GLC Ltd. Don’t miss their views on the market through the Loz ‘n’ Belly podcast, free every week. As always, we will be continuing our tracking series where we look at the positions that prominent hedge fund managers hold in UK markets. If you've missed some of our previous posts, make sure you check out the holdings of Harbinger Capital Partners, Stephen Mandel's Lone Pine Capital, Ken Griffin’s Citadel , Louis Bacon's Moore Capital Management and Paul Tudor Jones’s Tudor Investment Corp . If you're unfamiliar with our new series tracking UK positions, check out our preface here. We have also covered the potential for hedge fund activism in the UK investment trust sector.

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