Philippe Jabre

Philippe Jabre is the founder and CIO of Jabre Capital Partners S.A, a Geneva-based hedge fund and a former managing director of GLG Partners, a UK-based hedge fund.

Philippe Jabre
Born1960
Beirut
NationalityLebanese, French
OccupationHedge Fund Manager
TitleCIO of Jabre Capital Partners S.A
Children4

Early life

Mr Jabre, born in 1960 in Beirut, Lebanon, studied at college Notre-Dame de Jamhour.

He graduated from Concordia University in 1980 with a BBA [1] and earned an MBA from Columbia Business School in 1982,[2] where he is a member of the Board of Overseers.

Career

Jabre trained at JP Morgan and then BNP Paribas the French bank. In his 16 years there, he specialised in the budding market for convertible arbitrage, a strategy that involved buying a company’s convertible bonds and selling short the company’s stock.[3]

GLG Partners

After joining GLG in 1997 and having a significant impact on the hedge fund's growth and success, Jabre left GLG during a 2-year investigation by the FSA. Individuals familiar with the firm say GLG came to view Mr. Jabre as someone who took unnecessary risks. Jabre was fined £750,000 for market abuse in 2006 for breaching FSA principles. This was, at that time, the largest fine the FSA had issued against an individual.

FSA Fine

From the FSA website: "On 11 February 2003 Mr Jabre was 'wall crossed' by Goldman Sachs International as part of the pre-marketing of a new issue of convertible preference shares in Sumitomo Mitsui Financial Group Inc (SMFG). Mr Jabre was given confidential information and agreed to be restricted from dealing SMFG securities until the issue was announced. Mr Jabre breached this restriction by short selling around $16 million of SMFG ordinary shares on 12–14 February 2003. When the new issue was announced on 17 February 2003, Mr Jabre made a substantial profit for the GLG Market Neutral Fund." At first he planned on appealing the fine, but then withdrew his appeal.

The FSA's Regulatory Decisions Committee “decided that Mr Jabre did not deliberately commit market abuse, ruling that he did not violate the FSA’s Principle 1 governing market integrity”. The Committee opted not to ban or suspend Jabre.[4] In an interview with CNBC, Jabre asserted that “when he was fined in London for market abuse, the rules and regulations were "not as clear" as they are now"[5]

Jabre Capital Partners

On October 11, 2006 it was announced that Philippe Jabre was set to open a new hedge fund in Geneva, Switzerland, after his non-compete contract with GLG Partners expired. The fund opened in February 2007 and was one of the largest new launches in recent years, as many of Jabre's old clients followed him to his new venture, along with a significant number of new investors. The fund - JabCap Multi Strategy Fund - closed very shortly afterwards with about $4 billion under management and Jabre Capital Partners is one of the largest hedge funds in Switzerland today.[6]

2011 Tōhoku and Japan Nuclear Crisis Trading Activities

In March 2011, Philippe Jabre and his fund made a substantial bet on Japanese equities. Mr. Jabre had eventually arrived at the rationale that Japanese stocks which have recently been on the decline due to the 2011 Tōhoku earthquake and tsunami would rebound shortly thereafter. Mr. Jabre proceeded to plow capital into the Tokyo Stock Exchange. The Nikkei was down a sharp 13% shortly after rumours of a "nuclear crisis" started to surface, and through his JapCap Multi Strategy Fund Jabre and his traders sold off their Japanese positions. Despite the evident rebound, futures contracts were sold short by his firm against the equity long positions as a sort of hedge.[7] He personally contemplated the odds and eventually instructed his traders to close out their bearish futures. Mr.Jabre said he and his firm could not bear the risk of the supposed nuclear explosion that would lead government officials to close the Tokyo Stock Exchange, locking his firm's capital in with no way to retrieve it for several months.The shares that were expected to bounce back did so the following week. This short panic and nervous sell off resulted in what the firm dubbed "a six-month drawback in fund performance". All in all, this would eventually cause a $300 million windfall for the fund and an uneasy Jabre went on asking several colleagues of his if he "made the right decision"."I keep thinking about it, what could I have done differently" ... "We couldn't take the risk of the Tokyo Stock Exchange closing down, so we sold". He told a reporter of the Wall Street Journal, "I felt horrible, but I don't express happiness or frustrations," he said. "Emotions are the enemy of a balanced person." Reflecting back on his decision, Philippe says he doesn't expect much emotional recoil on the trade, but said that he's happy his firm has some capital to work with now that would otherwise be frozen. "If we're wrong [and the market rallies], we set the firm back," Mr. Jabre remembers telling a colleague. "But we'll be alive to fight another day."

Awards and industry recognition

In 2013 Jabre Capital was one of Europe's top-performing hedge funds[8] and won EuroHedge’s Management Firm of the Year award.[9]

In March 2014 the firm won three awards at the HedgePo Investors Choice Awards: Fund of the Year, Global Equity Fund of the Year and Global Multi-strategy Fund of the Year.[10]

Mr. Jabre also wrote the foreword of The Handbook of Convertible Bonds: Pricing, Strategies and Risk Management of Jan De Spiegeleer and Wim Schoutens[11]

Personal life

He is an accomplished skier. He is also married[12] with four children. Philippe is a trustee for the American University of Beirut.[13] He is also the founder of Association Philippe Jabre (APJ), which provides financial aid for young students in Lebanon to pursue their education. In 2015-2016, APJ funded around 380 students.

References
  1. http://www.aub.edu.lb/main/about/bot/Pages/ray-jabre.aspx
  2. "An unbeaten risk-taker". Financial Times. 2006-03-03. Retrieved 2014-07-05.
  3. "An unbeaten risk-taker". Financial Times. 2006-03-03. Retrieved 2014-07-05.
  4. "An unbeaten risk-taker". 3 March 2006.
  5. Rules weren't clear when I was fined: Jabre
  6. http://www.ft.com/cms/s/0/679cf570-8596-11e1-a394-00144feab49a.html#axzz33iAKVKn1
  7. Hedge (finance)
  8. Clareville Top European Hedge Fund In 2013
  9. http://www.valuewalk.com/2014/05/philippe-jabre-interview/
  10. "HedgePo Investors Choice Hedge Fund Awards 2014 Winners Announced". Retrieved 6 July 2014.
  11. https://www.amazon.co.uk/Handbook-Convertible-Bonds-Strategies-Management-ebook/dp/B005D7EPEC/ref=sr_1_fkmr1_1?s=books&ie=UTF8&qid=1391782060&sr=1-1-fkmr1&keywords=jan+der+spiegeleer
  12. http://beirutnotes.blogspot.co.uk/2006/03/philippe-jabre-return-of-hedge-fund.html
  13. http://www.aub.edu.lb/main/about/bot/Pages/ray-jabre.aspx
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