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Giovanni de Francisci: The "unconventional" hedge fund investor
Jul 21 20147 Comments
Giovanni de Francisci is the portfolio manager of the Petschek Family office in Monaco, and in many ways an unconventional hedge fund investor. This Opalesque.TV BACKSTAGE video is a rare document on the preferences and investment philosophy that drives certain private family offices who typically tend to stay off the record.
For de Francisci, the biggest risk is not generating sufficient returns, therefore his main interest is to achieve outsized or even “phenomenal” returns. However, he also admits that the opportunistic investments he is looking for are often idiosyncratic and very limited in size. He argues - citing a number of trade examples like a low risk South Florida real estate strategy making 300% per year - that high returns don’t necessarily come with high risk, and that a “safe” investment can in fact carry the greater risk of ruin.
One of his main criticisms regarding the state of the hedge fund industry is that those outsized returns he is looking for are harder to find today as hedge fund managers have started to “dumb down” their returns and strategies in order to please the majority of investors. Like the hedge fund manager he just met at a conference who told him that he sees himself forced to take the extra effort to dilute (or “diversify”) his investment strategy so that the returns correspond to the institutions’ palate, while at the same time his own money in the fund that sits in a separate and more concentrated class had never yielded less than 30% in any rolling 12 months period. De Francisci points to a number of risks in the “conservative” investment approach, and laments that today “excellence is contemptuous, and mediocrity has become highly respectable”.
De Francisci has also seeded managers. He goes on speaking about his selection criteria and his unconventional due diligence that include home stays with hedge fund managers and what you can learn by playing backgammon with them. He also shares his views on risk monitoring and why he believes the prevalent fear of fraud in the hedge fund industry is unconstructive and overblown. [less]
Giovanni de Francisci is the portfolio manager of the Petschek Family office in Monaco, and in many ways an unconventional hedge fund investor. This Opalesque.TV BACKSTAGE video is a rare document on the preferences and investment philosophy that drives certain private family offices who typically tend to stay off the record.
For de Francisci, the biggest risk is not generating sufficient returns, therefore his main interest is to achieve outsized or even “phenomenal” returns. However, he also admits that the opportunistic investme ...more
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Family Offices, Niche Strategies, Research/Education. Location: Monaco
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Please use the comment feature below for your feedback, or email me at knab@opalesque.com. Thank you!
Matthias Knab Posted On Jul 21 2014
I was especially interested in Mr. Giovanni De Francisci's psychological component of his due diligence process. I've not heard of anyone going to such great lengths to ensure a successful relationship with a fiduciary and sincerely appreciated these insights. In addition to his deep industry experience and well honed instincts regarding investment vehicles Mr. Giovanni De Fransisci appears to also be keenly aware of the importance of human behavioral patterns during critical periods of uncertainty.
anonymous Posted On Sep 10 2014
Very interesting discussion, especially the recognition that higher returns do not correlate with higher risk.
anonymous Posted On Aug 27 2014
Great interview
Mr. Giovanni De Francisci's someone pragmatic and determined.
It's very nice to hear someone whose speech is not fixed and who knows whereof he speaks.
It's a breath of fresh air to listen Giovanni De Francisci.
Patrick Rolland Posted On Aug 08 2014
It's refreshing to hear from an investor who is not afraid to think for himself. Unfortunately, I have to agree with him that the majority (perhaps the large majority) of hedge fund managers today are no longer interested in shooting the lights out in terms of returns but are instead attracted to the fee-heavy business model, particularly given massive institutional inflows...
anonymous Posted On Aug 01 2014
Superb illustration of the bobcat and the bear analogy!
Has anyone else employed backgammon as a method of interviewing a PM? Brilliant!
anonymous Posted On Jul 24 2014
This man possesses the mindset of a champion and is an inspiration to the global wealth management ecosystem.