Hedge funds back on track
Hedge funds have managed to recover from the outflows which occurred during the global financial crisis (GFC) and, additionally, benefitted from extra volatility from the nervousness over China and the ramifications of Brexit, according to an adviser to hedge fund managers, Kim Ivey.
Also, as investors became concerned with growing negative yields in traditional fixed interest markets since the GFC, there's a growing interest in "anything with a yield component" strategy.
However, for Australian hedge fund managers, a propensity for big local funds to look offshore to larger hedge fund managers for their exposure still remained a challenge.
"There's been good progress from the investor side understanding alternative managers and their strategies in the past 10 years, but given the growing appeal of alternative investments, managers are still digesting the differing requirements of sovereign wealth, superannuation, offshore pension, high net worth, family office and client bases," Ivey said.
According to him, super funds also emphasised the desire for their hedge funds to be of "institutional grade", as far as business management and infrastructure is concerned, which all "takes time and money".
On the other hand, alternative investment managers proved to become more popular in the non-institutional market.
Matthew Jeremy, who was one of the judges at the annual Hedge Funds Rock and The Australian Hedge Fund awards charity night, founded by Ivey, said: "The Australian hedge fund industry has demonstrated flexibility and competitiveness be responding to the demand for platform-friendly products from investors in the SMSF [self-managed superannuation fund], adviser driven and pure retail space".
Ivey added that many Australian managers also managed to attract Asian, European, and North American investors which made up the nearly US$3 trillion invested in alternative investment strategies.
According to an Australian Securities and Investments Commission (ASIC) report, issued in July last year, hedge funds managed only a small share of Australia's $2,407 billion managed funds industry, with retail direct investors accounting for 17 per cent of investors by net asset value (NAV), and they had large exposure to interest rate derivatives.
In terms of their geographic exposure, they reported 29 per cent of NAV being invested in North America, with equally strong exposure to Australia and Asia (ex-Australia) regions where each of them received 26 per cent of the total NAV.
This year the annual Hedge Funds Rock and The Australian Hedge Fund awards charity night, which would be held on September 15, would include the following categories:
- Australian Hedge Fund of the Year
- Best Emerging Manager
- Best Fixed Income and Credit Fund
- Best Global Macro/Futures Fund
- Best Long Short Equity Fund
- Best Market Neutral Fund
- Best Multi Strategy Fund
- Best Offshore Alternative Manager Operating in Australia
- Best Investor Supporting Australian Managers
- Contribution to the Australian Hedge Fund Industry, and
- Australian Hedge Fund of the Year
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