Equinox named Best Equities (Long Only) / Russia Fund for 2020

Charles Henri Hirsch, the Fund’s Co-Founder and Chief Investment Adviser attended the ceremony to collect the award on behalf of Equinox Russian Opportunities Fund

On Monday, May 31, 2021, the seventh annual Russian Hedge Fund Industry Awards ceremony was held at the Mart Cafe in the centre of Moscow. Moscow Hedge Fund Managers Club (MHFMC) and NAIMA welcomed the winners and guests of the Russian Hedge Fund Industry Awards 2021.

The awards identify the most effective hedge funds with at least one year of independent proven track record, advised by investment teams with a Russian background, regardless of the fund’s geographic focus. All winners are selected based on quantitative data for the year ended December 31, 2020, collected and analysed by MHFMC and verified by NAIMA.

Equinox is delighted to announce that Equinox Russian Opportunities Fund was named Best Equities (Long Only) / Russia Fund for 2020.

Charles thanked MHFMC, NAIMA and sponsors Bloomberg and Exante for the award and said that the positive annual return, during such a challenging year, was in part the result of some excellent investment research by Senior Analyst, Oksana Martynova, combined with Russia’s digital response to the Covid-19 pandemic

Delivering astounding returns

For almost two decades, Charles Henri Hirsch has been quietly helping clients grow their wealth by investing in an equity market unfamiliar to many — Russia. As chief investment adviser of Equinox, Hirsch has been instrumental in the fund’s incredible total net return of 6,783% over the past 17 years (as at Dec 31, 2017). This equals to an annualised return of 26.5%. Between 2000 and 2007 alone, the fund saw a return of 8,025%.

Citywire, a London-based financial publishing and information group, ranks Equinox as the top performer among its 48 peers, based on its performance over the last five years. Over a decade, it is ranked No 2 among the 35 other funds that invest in Russia. As at the end of last year, the fund had US$48 million in assets under management. Its investors are mainly private banks and high-net-worth individuals from European countries such as Germany, France, Belgium and Italy. Despite its impressive performance, the fund has not gained enough attention from Asian investors, says Hirsch. “We are based in Russia and Europe and don’t market ourselves aggressively. We used to have some Asian investors, but they pulled out in 2007.”

Last December, Hirsch spoke at the World Wealth Creation Conference in Singapore to share his investment journey and market views. He also talked about his wildly successful bet on 15 Russian electricity companies a few years before the turn of the century. These companies, which were operating hydro and thermal power plants, were trading at very cheap valuations, he said. “As a result, the fund recorded a return of more than 8,000% from 2000 to 2007. In a recent phone interview with Personal Wealth, Hirsch, who is French, delved into greater detail about the strategies he had employed and companies he had picked over the years.


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‘Russia Calling’ Investment Forum

Vladimir Putin participates in the 12th annual investment forum “Russia Calling”. According to him, “despite all the difficulties of this year, Russia in general has managed to maintain macroeconomic stability, prevent an inflation outburst and support stable financial situation on markets”. This event aims to bring together the international business community. It is organized by the Russian investment bank VTB.

Investing In Russia For The Next Decade

Charles Henri Hirsch is one of the few investors capable of generating impressive returns over time. From 2000 through to 2020, he’s achieved an average return of 23% per year with Equinox. In this article, he identifies some key trends that should allow him to continue to perform well over the next decade.

“Russia is a riddle, wrapped in a mystery inside an enigma.” Churchill’s words are undoubtedly still shared by many investors. In reality, the economic growth of Russia and its financial dynamism are perfectly rational. Equinox is well-positioned to benefit from some of the new trends in the country and maintain its outstanding performance for the years to come.

Improvement in Corporate Governance
Until recently, Russian state-owned companies were not managed for the benefit of minority shareholders. Some practices are now starting to change. Several oligarchs are beginning to invest directly in the shares of state-controlled companies, rather than benefiting from ownership of the subcontractors billing these companies. This phenomenon has the effect of improving corporate governance, boosting share prices and protecting minority investors. That’s one of the reasons why Gazprom performed so well in 2019. On June 24th of that same year, a new dividend policy was introduced by the Board of Directors. From that point, the dividend distribution is to gradually attain 50% of net profit over the next three years. As a result, Gazprom share price soared from US$ 4.66 to US$ 8.25, an increase of 77% in one year. There is a good chance that other state-owned companies will now follow the same path.


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