David Murrin isn't a run-of-the-mill hedge fund manager. His Soros-style investment strategies might not be for everyone and might appear daunting at first. After graduating with an honours degree from the University of Exeter in physics with geophysics, he spent two years working in oil exploration in the jungles of Papa New Guinea, living and working with local tribes and beginning to formulate personal theories on collective emotional behaviour. These have enabled him to develop a unique method of analyzing behavioural patterns in the markets.
By his 30th birthday, Murrin wanted to be running his own business. In preparation, he spent the next seven and a half years at JPMorgan gathering skills in price prediction and modelling. He traded the major bond, interest rate, bullion, FX and equity index markets and founded and managed the European technical analysis group there. He co-founded Emergent Asset Management with Susan Payne in 1997.
The company prides itself on not just being any old discretionary macro fund management firm. “There are a lot of so-called macro funds but they don't do what we do,” he says. “From the response we get from our investors, they notice that we are very different in the way we formulate and articulate our ideas. Most people specialize in fixed income or a sector and call themselves macro. We have a model that enables us to invest any where, in any way that we feel there is an opportunity.”
This is directly reflected in the style of funds on offer. The five-strong team manages money from six funds investing in emerging and developed market debt, FX and equity markets.
“We have an internal belief in the way the world works – that essentially long-term patterns do influence the current environment at certain points,” he says. “So we go back, as far as 1929, and understand the big picture.”
The Alternative Fund is a directional long/short fund invested in emerging-market debt and FX and was ranked number one in US dollar global emerging-market debt in 2001 by both S&P Micropal and Lipper Fund Services.
The highly successful Ballistic Fund principally invests in emerging-market equities. So far it has posted a 92.49% return since its inception in July 1999 and 110.87% over three years since its launch as a hedge fund in 2001. In June this year, the fund won the Hedge Fund Review award for the best in its class.
“Emerging-market equities are traded by fewer people and have more diversification than any other spectrum that we know of,” Murrin says. “The skill set of finding countries, how they interlink and searching for the right shares, makes it a very exciting investment domain.”
The Cosmopolitan fund is a G7 macro version of the other two or investors can opt for the Diversified Fund, a hybrid version of both Alternative and Ballistic. Otherwise, the Global Fund offers a blended fund of funds embodying all three. All the funds aim to achieve 15% to 20% returns.
“We have a world view which filters down into all the various funds,” Murrin says. “At any one time, they all perform differently even though they come from a core of similar beliefs.”
These funds draw a sophisticated and experienced type of investor. “We have the full spectrum of investors,” he says, “but they tend to be forward-looking and long term, which suits us well.”
Murrin's knowledge of economics and politics is impressive. His maverick views on US neoconservatism, the dollar's decline, the proliferation of nuclear weapons, the ascendancy of the east and the decline of the west underpin all his analysis and investment moves.
He says: “Historical cycles impact everything that happens around us and, as a global macro business, our understanding of how politics is unfolding right now, for example, is very much a product of the economic cycle.”
The company's appetite for defying convention has even influenced its choice of location. In the calm and relatively unpolluted town of Haslemere in Surrey, about 60km south of central London, the team is able to work longer hours. “We decided to base ourselves out of London. Our reason was that we believe the environment is far more suited to maintaining a high level of discretionary thought processes. We aim to think differently, so why do everything the same way as everyone else?”