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Cash flow chart

Structure of the investment fund

1 Purchase, redemption and keeping records of the fund's shares

1. To subscribe to the shares of the investment fund, the investor must pass the document verification procedure (the so-called “Know Your Client” and “Anti-Money Laundering”) with the administrator of the investment fund. Subsequently, the administrator keeps records of the investor’s investments and is responsible for the relationships of the fund with the investor. In particular, it provides the investors with reports on the results of management throughout the entire period of investor’s investment life in the fund.
2. Upon successful completion of the document verification procedures, the investor transfers funds to the current account of the investment fund with the bank for the purchase of the fund’s shares.
3. Subscription to the shares of the investment fund is carried out by the investment fund on the basis of the subscription agreement.
4. The administrator provides his services to the investment fund on the basis of an administrative services agreement. Under this agreement, the administrator verifies the documents, maintains a register of investors-shareholders and maintains the accounting for the shares of the investment fund, keeps records of invested funds, calculates the net asset value of the fund’s shares and provides reports to the fund’s clients on the results of management.
5. The bank provides settlement services for the investment fund on the basis of an agreement on the provision of banking services; the broker provides brokerage services for the investment fund based on the brokerage services agreement. Investors funds shall be initially transferred to the fund’s bank account, and subsequently the administrator transfers them to the fund’s broker account to perform investment operations. In case of redemptions from the fund, cash for such redemptions is transferred from the brokerage account of the fund to the bank account of the fund and subsequently transferred to the bank account of the investor.

2 Fund management

1. The management company operates on the basis of the investment management agreement between the management company and the investment fund. It develops an investment strategy within the limits set out in the fund’s founding documents, monitors its observance in parallel with the administrator, and makes and executes investment decisions on behalf of the fund.
2. The management company may engage investment advisors to manage the portfolio of the investment fund and transfer part of the responsibilities to such advisors on the basis of a trilateral investment advisory agreement between the investment fund, the management company and the investment advisor.
3. The broker, operating on the basis of brokerage service agreements, carries out the purchase and sale of assets on behalf of the fund; the broker also keeps track of and provides the safekeeping of assets.

3 Audit

1. The broker, operating on the basis of brokerage service agreements, carries out the purchase and sale of assets on behalf of the fund; the broker also keeps track of and provides the safekeeping of assets.
2. The auditor, acting on the basis of an agreement between the investment fund and the auditor, checks the accuracy of the calculation of the net asset value and financial results for the reporting period, compliance with the international accounting standards, as well as the compliance with the investment strategy. The audit report is available to all investors of the fund.

4 Legal support

The legal counsel advises on legal matters related to the activities of the fund, based on the service agreement between the investment fund and the legal counsel.

The Process of subscribing to the shares of the investment fund Investing in the Investment Fund directly by an individual or a company This type of investment requires time primarily for going through the administrator's checks. It is advisable to start the process no later than 1 month before the Subscription date. The speed of the process directly depends on how quickly the investor will be able to prepare the documents confirming the origin of the funds. The diagram shows the approximate time horizon of the process.

T-28 The investor fills in the investor questionnaire.
T-27 The investor receives the list of questions and documents required for the compliance process.
T-25 The receipt of the documents from the investor required for the compliance process.
T-15 The investor profile is created and transferred to the administrator.
T-13 Internal compliance by the administrator: reviewing the case and the investor documentation; requesting additional documentation (if necessary); finalising the decision with regard to the investor (on average 10 calendar days from the time of the receipt of the documents).
T-3 Transfer of documentation to the administrator (3 working days before the subscription date) and transfer of the funds to the investment fund.
T0 The date of subscription: determining the price and issuing shares; entering the new investor into the register.
T+10 The administrator issues the subscription confirmation and sends it to the investor.

Investing in the Investment Fund through a Broker or Bank in low-risk jurisdictions In the case of investing through the investor's account with a broker or a bank based in a low-risk jurisdiction (a jurisdiction where financial institutions can certify investor's compliance with the administrator's requirements), the investor does need to go through the verification procedure with the administrator. The investment process in this case is significantly reduced and simplified. The Investor will however pay commissions to the bank/broker for buying and selling the shares and for holding the shares of the fund in the name of the investor. It is advisable to start the process no later than 1 week before the subscription day.

T-5 The investor orders the bank/broker to purchase the shares of the investment fund (no later than 5 days before the subscription day).
T-5 — T-0 Internal procedures of the bank/broker for the purchase of the shares of the fund.
T-5 — T-0 Exchange of data with the administrator and receipt of the confirmation that the transaction is possible.
T-0 Subscription date: determining the value of the shares and issuing the shares at the time of subscription.
T+10 The administrator issues the subscription confirmation and transfers to the investor.

Investment Process

1 Defining the strategy

1. Selecting an investment strategy.
2. Defining the set of instruments.
3. Defining the style of investment (tactical or strategic).

2 Identifying the instruments

1. Forming the set of financial instruments meeting the fund’s investment criteria: geography, industry, credit quality, liquidity, entry requirements, transparency, and the reliability of asset valuation.
2. Selecting the most promising securities.

3 Tactical of investment. Analysis

1. Creating transaction models for each specific asset class and each specific asset.
2. Statistical verification of the models.
3. Working through a specific case in practice.

4 Approval by the investment committee

1. Unanimous approval by the members of the investment committee of the proposed transactions, as acceptable and attractive, individually and within the framework of the portfolio of the investment fund as a whole.
2. If any additional questions emerge at any stage of the analysis, additional analysis is conducted and the idea is reviewed.

5 Selecting the allocation parameters

1. Selecting allocation parameters for different asset classes, while accounting for the market conditions and the expectations of the managers for the returns on and volatility of the assets.

6 Tactical of investment

1. Creating transaction models for each specific asset class and each specific asset.
2. Statistical verification of the models.
3. Working through a specific case in practice.

7 Analysis

1. Unanimous approval by the members of the investment committee of the proposed transactions, as acceptable and attractive, individually and within the framework of the portfolio of the investment fund as a whole.
2. If any additional questions emerge at any stage of the analysis, additional analysis is conducted and the idea is reviewed

8 Allocation revision

1. Determining the new allocation for the various instruments while taking into the account the newly approved and executed transactions.
2. Reviewing the allocation position while taking into account the changes in the market conditions

9 Monitoring

1. Structural changes in the markets that can lead to a fundamental shift in the prices.
2. Efficiency of the portfolio allocation.
3. Attractiveness of the ratio of return to risk for the instruments of the portfolio.
4. Liquidity and the level of risk in the portfolio.

Dear friends!

We live in difficult times.

Financial markets are moving from a backdrop colored by helicopter money to one of monetary tightening. In the coming years, we expect volatility and large-scale corrections, as well as unpredictable and rapid changes in the quality of issuers and the prices of certain assets.

Simply buying the indexes or the best papers is no longer how you preserve and grow wealth. That era ended long ago, just like that of “semi-active” investments that imitated “alpha strategies” but really just delivered returns just because the markets were rising.

Some managers and investors are struggling to regroup. And far from everyone is in the condition to do so. More and more products that look like pyramids are popping up in the markets, while a rising number of managers are missing the hidden risks to their strategies, creating significant risks for investors.

Market infrastructure is changing as well. KYC requirements are getting tougher. Respected financial institutions are increasingly refusing to serve small clients and residents of “challenging” jurisdictions. The cost of access to the markets is going up, as is the amount of paperwork an investor must navigate to build up a portfolio. Meanwhile, transient political interests are increasingly driving the decisions of financial regulators and providers of investment services. The risks of investing with both global players and small teams have picked up.

If the globalization of the capital markets hasn’t ended, it has definitely run out of gas for the time being. More countries are closing off their markets, making regional investments and transnational operations challenging. Investing in local currencies and local markets is growing increasingly risky regardless of market price dynamics.

How to cope with rapidly changing rules, how do you navigate all the restrictions, bans and demands? How do you guard your investment structure and ensure a reasonable backstop? Where can you find products that can generate stable and fair returns without taking on unwarranted risks in this time of market sea change? How do you ensure the necessary degree of diversification across your investments? These are the questions to which we provide answers for our clients.

The mission of Movchan's Group is to unlock effective global investment while guarding the portfolios of our clients in a wide variety of jurisdictions. Though Movchan’s Group started in 2016, the Group’s partners have been active participants in the global financial markets for 20-30 years and have been recognized as some of the best in their spheres. We have headed up major banks, management companies and family offices in our markets, have developed creative and successful financial products and investment instruments, and have been part of big deals.

The Movchan’s Group team is made up of people from different countries with experience in various emerging and developed markets. The combination of global and local experience makes us effective for both global investors from EM countries and investors from DM countries who want to rely on local expertise and infrastructure.

We have built up vast experience in creating and managing investments and know in-and-out the current legal, tax and technical specifics of the investing process; we have an extensive network of contacts and collaborate with the best administrators, lawyers and consultants; we have built a robust investment infrastructure, with the offices of our licensed companies, our brokers, banks and depositories located in each of the four hemispheres, across Asia, Europe and the Americas; we both run an investment fund network (and even our own investment platform) and manage client accounts and a pooled account.

Our products consistently hit our targets and outperform comparable benchmarks.

Our experience, together with our expertise, infrastructure and reputation in the markets, is a valuable asset that provides protection for our clients' investments from a wide variety of risks and significantly improves investment performance.

As of mid-2022, over 300 investors have trusted us with their savings. We would be honored to help you manage your money.

Principles of Investment

Individual idea generation, collective decision making, proprietary trading testing The most important task of each partner and employee is to generate investment ideas – whether it is finding an interesting asset class, product or a new clustering parameter in a mathematical strategy. The idea is brought before the investment committee, whose prime objective is to find a reason to reject the idea. Once the managers make sure that they cannot find such a reason, the managers either buy the securities, reflecting the idea, into the portfolio of the fund or add a parameter into the quantitative strategy. If the idea concerns creating a new product, the idea is first tested with partners’ funds within a proprietary account.

Principles of Investment

Limiting risk We manage primarily conservative products. We could implement ideas that improve performance coefficients of our funds while making them riskier, but we consciously refuse to do so. If we eventually decide to make high-risk products, we will "label" them accordingly.

Principles of Investment

Continuous monitoring Any investment requires continuous monitoring – the situation can change unpredictably and very quickly. Therefore, our investment analysis process begins at the stage of making the investment decision and continues throughout the period of holding the investment in our portfolio.

Principles of Investment

Smart diversification We experienced making serious mistakes. We appreciate that there are no absolutely accurate solutions and therefore any idea should be allocated a small place in the portfolio so that a potential error does not have a significant impact on the portfolio as a whole. And diversification by itself is not enough – to create portfolios, we also use an assessment of the relationship between the behaviours of various investments in a negative scenario. This assessment includes both correlation and covariance analysis, as well as qualitative research. We only accept an investment idea into the portfolio when it reduces portfolio volatility, and the "worst-case scenario" improves as a result.

Principles of Investment

Everything is relative In investing, there are no accurate forecasts. A huge amount of "noise" in the form of market data, economic statistics and actions of market participants makes it easy to find false dependencies and makes it extremely difficult to find real patterns. The situation is complicated by two more factors. First, markets and economies are constantly evolving, so that even true dependencies change over time; second, most economic processes are chaotic, that is, small influences (for example, an irrational decision of a regulator or random media activity) can cause huge consequences. Therefore, we do not (almost) use forecasting as the basis for the formation of the investment portfolio.

Principles of Investment

Luck or advantage At any given time, there is a significant number of successful investors: some succeed by pure luck, some because of skills and specific advantages. However, investing “physically” cannot bring all participants a return above the long-term growth of global GDP. If someone earns more, then some investor suffers losses. Therefore, we do not use "simple" solutions; we look for ideas that are derived from our sustainable advantage (informational, scientific or technical), and for the teams with such an advantage. In the absence of such advantages, the best solution is to invest in a wide market, and we sometimes do so.

Principles of Investment

Game theory, not accounting The success of an investment ultimately depends on whether the market will pay more for it in the future than what is expected today. Hence, the task of the manager is to understand what other market players will think about the investment idea in the future. The decisions of a good manager, therefore, should not be based on an objective truth (including mathematical truth), but on an accurate assessment of the future actions of other players. That is why we not only pay enough attention to quantitative information, but also focus on its interpretation by market participants. There is a popular saying that "Markets can be irrational far longer than you can stay solvent." We believe that markets are not rational at all.

Principles of Investment

Analyse emotions, not experience them Emotions drive investors to make a lot of mistakes. The desire to close positions in securities that brought profit, and to maintain unprofitable ones; seeing false patterns, which results in believing in technical analysis; self-isolating from the information flow by accepting only those facts that confirm the correctness of the investment actions taken previously – are just a few of the mistakes caused by the emotions of the investor. We strive to protect ourselves from the influence of such emotions, but not to ignore them – we analyse emotions and irrational impulses, understanding that they will be experienced by a large number of investors and many of them will not be able to abstract their actions from their emotional state.

Team

Andrei Movchan Founder, General Partner andrei@movchans.com

Renowned economist and investment manager with 30 years of experience.
Formerly, Executive Director of Troika Dialog Investment Bank; Founder and Chairman of the Board of Renaissance Investment Management Group, with assets under management of more than $7 billion; founder of the investment company “Third Rome”.
A laureate of many awards and prizes, in particular, “Best Asset Manager” Forbes, “Best CEO of the management company” RBC, “Legend of the Industry” SPEAR’S, “Manager of the Year” RBC, etc.
Former head of the Carnegie Center’s Economic Policy Program.
Specialist in probability theory and mathematical statistics. Authored the books “Russia in the Post-Truth Era” and “Cursed Economies”, many articles and lectures on economics and finance; twice awarded the “Presszvanie” Award for his contribution to business journalism.
Graduated from the Faculty of Mathematics and applied mechanics at the Lomonosov Moscow State University, the Financial University under the Government of the Russian Federation, and the University of Chicago Booth Business School.

Team

Elena Chirkova Senior Partner echirkova@movchans.com

Specialist in asset management, corporate finance, financial markets and asset valuation with 30 years of experience.
Formerly: Advisor at Rothschild Investment Bank, Director of Corporate Governance at Deloitte, Vice President of Investment Banking at Troika Dialog. Visiting scholar at Harvard University School of Economics; teaches at the HSE School of Finance. Author of articles and books on economics and finance, including “The Warren Buffett Philosophy of Investment”, published in 2015 by McGraw-Hill Education, and “Value Investing. Persons and Principles”.
Graduated from the Faculty of Economics at the Lomonosov Moscow State University, Master’s program at the Claremont Graduate School (California, USA). PhD (Economic Sciences).

Team

Michael Portnoy Senior Partner mportnoy@movchans.com

24 years of experience in financial markets.
12 years of experience in analysis and development of trading strategies and systematic trading of equities and derivatives.
7 years selecting, analyzing and managing hedge fund portfolios and portfolios of absolute return strategies focused on global financial and commodity markets.
Worked at largest Russian banks and wealth management firms like Alfa Bank, Bank UralSib, GHP Group, MC MDM and Alfa Capital; headed departments of Global Markets, Hedge Funds and CTAs.
Specialist in absolute return and market-neutral strategies in futures and options markets.
Graduated from Baruch College CUNY (Finance & Investments).

Team

Julia Prokofieva Senior Partner jprokofieva@movchans.com

Expert in the field of corporate governance with 15 years of experience.
Experience in managing securities issuance, implementation of risk management systems, implementation of Basel III and MiFID requirements in leading banks.
Specialist in wealth management, tax planning, issues of residency.
Graduated from the Russian Academy of Justice and the Plekhanov Russian Academy of Economics.

Team

Rafael Nagapetiants Senior Partner rnagapetiants@movchans.com

Specialist in investment banking with 35 years of experience in the Eastern European markets.
In the past, led the corporate finance division at Alfa-Bank; during the restructuring of RAO UES, originated and executed the largest landmark transactions involving such companies as Fortum and Enel. For many years, he served as head of Societe Generale’s investment business in Russia and advisor to the largest French firms, as well as Sberbank, Rosatom, Inter RAO. As Senior Vice President and Member of the Management Board of “Sistema” Holding, he was involved in investment origination.
Author of a monograph and of more than 50 articles on marketing in the consumer sector.
Graduated from the Financial University under the Government of the Russian Federation and the Faculty of Law of the Lomonosov Moscow State University. Ph.D., Professor.

Team

Eugeniu Kireu Partner ekireu@movhcnans.com

Specialist in the analysis of debt markets, credit products and creditworthiness of companies.
Leading analyst at Movchan’s Group, overseeing the formation of the Group’s investment portfolio since its inception; holds responsibility in stock market analysis and strategy research in stock options.
Conducts scientific work; wrote numerous articles for economic research institutions and media.
Graduated with honours from the Faculty of Economic Sciences of the Higher School of Economics; a CFA II candidate.

Team

Zhansulu Mukhamejanova Manager zmukhamejanova@movchans.com

Specialist in financial consulting and audit with 10 years of experience.
In the past, she worked as an external auditor at Ernst & Young, worked with the largest state-owned companies, small and medium-sized businesses and government agencies in the field of audit and professional ACCA training; areas of specialisations: oil and gas industries, energy, and mining. As a financial advisor to medium-sized companies, provided regular reporting to management and shareholders.
Is a member of ACCA, a CFA II candidate and a certified specialist in AML.
Graduated from the University of Sydney with a bachelor’s degree in economics and finance.

Team

Maria Sklifasovskaia (nee Sazhina) Partner msazhina@movchans.com

Specialist in infrastructure, operations and customer service. She is engaged in supporting investors during the compliance process, in the development of long-term relationships with partners and financial institutions, and in the registration and creation of the legal structure of the Group’s investment funds.
She has a master degree in “Financial Economics and Monetary Regulation” from the Financial University under the Government of the Russian Federation.

Team

Zhadra Abdullina Partner zabdullina@movchans.com

A specialist in legal support with 10 years of experience; supports clients during the compliance procedure.
In the past, she was the head of operational and legal support in a leading company in Kazakhstan, providing services to the largest foreign oil and gas companies – NCOC, ENI, KPO, Tengizchevroil.
She graduated with honours from the KAZGUU University; holds a bachelor’s degree of international law and a master of civil law; qualifications in the field of compliance under the program “Countering the legalisation (laundering) of income”.

Team

Anastasia Ovchinnikova Partner novchinnikova@movchans.com

Specialist in business administration and operations management with 17 years of experience.
In the past, she headed the business administration department at MDM Bank, subsequently held responsibilities in supporting investment transactions and projects at Morgan Stanley and JP Morgan Chase; project manager in the administration of a subsidiary financial division of one of the largest Russian oil corporations.
Graduated from the University of Central Arkansas, USA, has an MBA degree from the Russian Presidential Academy of National Economy.

Team

Karen Tarayan Manager pr@movchans.com

Marketing and public relations specialist with over then eleven years of experience.
Throughout his career was engaged in the promotion of financial and investment products in large banks and companies. Including the Credit Bank of Moscow and Binbank.
On the last position at AAA Capital Management was responsible for PR, marketing and brand management as well.
Graduated from Moscow State University of Printing Arts, and also International Academy of Communication Wordshop.

Team

Sofia Kukhno Manager skukhno@movchans.com

Specialist in the field of international finance. She is engaged in the international promotion of the Group, in creating infrastructure for the funds’ activities in the markets of Europe, Asia and the United States.
In the past, she worked in the financial sector audit department at BDO, UK, as well as at the Digital Banking department, HSBC, UK; worked at a UK technology start-up.
Graduated from the London School of Economics with a bachelor’s degree in Finance; holds ACCA Certificate.

Team

Artem Karlov Partner

Team

Alexander Ovchinnikov Senior Partner aovchinnikov@movchans.com

One of the recognized Russian experts with more than 30 years of experience in the financial markets.
Since 1993, within the Central Bank of Russia Alexander participated in the creation and development of the Russian sovereign debt market. Then he headed the debt market analysis team of Troika Dialog.
Since 2000, he headed the analytical, and trade divisions, was engaged in asset management in the largest Russian and international banks.
In 2008 he rejoined Troika Dialog (after 2012 known as Sberbank-CIB). As a Vice-President, he led a project to modernize the Russian debt market.
He has a degree of the Financial Academy in international economic relations, a diploma from the Moscow Aviation Institute, diplomas from FRB NY and Carnegie Mellon University.

Why Investors Choose Us

Experience and professionalism For almost 30 years we have remained active participants in the international financial markets. We have managed banks and investment companies, created investment products, developed and executed complex financial transactions. We are familiar with legal, tax and technical features of investing in a wide range of jurisdictions and markets. We benefit from deep knowledge of state-of-the-art mathematical and statistical theories, use our proprietary complex mathematical apparatus, employ sophisticated techniques and methods of data analysis to select investments.

Why Investors Choose Us

Conservative approach We create products that deliver conservative income with low volatility of results. The preservation of capital is more important to us than profitability: we do not pursue speculative ideas and reject investment products that do not have solid sustainable advantages or bear slightest signs of integrity problems.

Why Investors Choose Us

Alignment of interests Managers invest their money first and accept investor capital into the fund only once they have complete confidence in the product; the share of partner capital in each fund always remains substantial.

Why Investors Choose Us

Recognition Our funds have received multiple awards, including from the National Association of Alternative Investment Market Participants (NAIMA) and the Hedge Fund Managers Club MHFMC. Our partners are laureates of many prestigious awards, including "Best Asset Manager", "Best CEO of the Management Company", "Manager of the Year", etc., from prominent business associations and media.

Why Investors Choose Us

Research activity The Group's partners and fund managers have published books and numerous articles on investments and economics. We are frequently quoted by reputable financial and economic media. Andrey Movchan’s Facebook page has over 90 000 followers.