Elena Ambrosiadou: The woman who launched her own hedge fund and made £200m

The high-octane hedge-fund sector is often considered the last bastion of male dominance in global markets, says The Sunday Times. But tucked away in Canary Wharf, “far from the Mayfair stamping ground of most of London’s star managers”, Elena Ambrosiadou has created one of the most successful hedge funds in the world – and become Britain’s best-paid woman in the process. Ambrosiadou, 47, paid herself £16m in 2004. With a fortune estimated at £200m, she is our wealthiest woman entrepreneur.

From sideline to full time

Ambrosiadou, who grew up in Thessaloniki, founded Ikos (which means “home” in her native language) in 1992, “when the hedge-fund industry was still in its maverick adolescence”, says The Daily Telegraph. The fund, which began as a foreign exchange trading account with little more than £60,000, was conceived as a money-spinning sideline to her business career. A chemical engineer by training, she achieved early success at BP, becoming its youngest-ever senior international executive at 27.

The backbone of Ikos was Ambrosiadou’s belief that “complex mathematical models and computer wizardry were the keys to success in an electronic market place”. When the fund went up 50% in two years, she decided to work on it full-time.

A family matter

Ambrosiadou soon found herself with company. The self-styled “architect of Ikos’s unique trading structure” was her husband and business partner, Martin Coward. A Cambridge-educated mathematician, he began his career as a technical consultant, applying statistical approaches to problems such as earthquake analysis, before hitting the big-time at Goldman Sachs. There, he emerged as a classic “quant” analyst, developing computer models to analyse price behaviour. Then he threw in his lot with Ikos.

The husband-and-wife team then spent three years fine-tuning their models before launching their first product in 1995, says International Money Marketing. They chose to home in on Japan on the grounds that, as well as being the world’s second-largest stockmarket, it was also the most inefficient. The immediate success of the ‘market neutral’ equity fund was proof that “one man’s inefficiency is another’s profit opportunity”: within a year, the fund had returned 24%.

Comfort, integrity and chastity

The pickings in Japan continued to be so rich that it remained Ikos’s main target for four years, although income was further boosted by the launch of a currency fund. The market collapse of 2000 then triggered expansion into the European and US markets, where the bear years provided ample opportunity for profits.

Ikos, whose funds are based in the Caymans, now manages more than $2bn and employs 35 people. Ambrosiadou, whose main passion outside work is the Oxford Philomusica Orchestra, runs a tight ship. “Being a business person means you understand the nature of sacrifice, integrity and balance,” she told The Sunday Telegraph.

Indeed, one of the most noteworthy aspects of Ikos is the way it contrasts an eschewal of “human/emotional judgement” in investment, with decidedly touchy-feely marketing. Its website is packed with poetic references to the Aegean Sea and the “Ikos personality… a unique source of alpha”. Our guiding principles, conclude the husband-and-wife team, are: “security, comfort, integrity [and] chastity”. Hardly the usual qualities of a hedge fund.

How Ambrosiadou’s hedge fund got ahead of the game

During the first nine months of 2005, some 484 hedge funds closed, against 267 for the whole of 2004, says Christopher Hughes on Breakingviews.com. That might spell bad news for some of the smaller players struggling to hold their own, but as “evidence of the industry’s growing maturity”, the fact that weaker players are being shaken out is surely a sign of overall health.

“The truth is that if you look in the City there are probably only 20 people who have a record that’s really observable and outstanding over a long period of time,” Crispin Odey of Odey Asset Management told The Guardian last year. Few would dispute that Ikos is one of them. Since 1992, its flagship fund has generated a total return of 144.4%, and an annualised return of 10.2%, says The Sunday Times. During the first five months of last year, when “even the best funds [experienced] one of the toughest times on record”, one of its funds made 25.8%.

Elena Ambrosiadou’s partner Martin Coward attributes a good deal of Ikos’s early success in Japan to first-mover advantage. Quantitative market analysis had been successful for many years in the US, but it was relatively new to Japan, he says. That might have turned out to be a flash in the pan, says the FT, but over time it became clear that a main attraction over rivals was the partnerships’ “conservative risk profile”.

It was also ahead of the game in terms of attracting mainstream cash, floating four funds on the Irish Stock Exchange in 2001, for example. As Hughes points out, in the hedge-fund game, it’s size and longevity that count these days. Ikos has both in spades.

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