Barclays Global Investors (BGI), the only single-manager in this year’s hedge funds — multi-strategy category of the Fund Manager of the Year awards, has beaten Bridgewater Associates and HFA Investments to take out the top prize.
BGI Australia’s chief investment officer Bruce Goddard says the advantages of a single-manager approach are twofold.
“One of the most straightforward benefits is that there is only one layer of fees. In a single-manager strategy you have a base fee. In a multi-manager strategy, each of the managers has that fee, and the manager of managers has a second layer of fees.”
He adds that managing risk is also easier.
“If you are buying in 23 different managers, you can manage risk, but only to the extent of how you mix them. We can manage risk in other dimensions as well.”
BGI’s Multi Opportunity fund is a total return offer, with four major investment strategies — equity based, global macro, fixed-income based and alpha transport.
Goddard adds that there are around 23 underlying strategies that fit into these four categories.
He says BGI’s investment philosophy is also crucial to the organisation’s success.
“We believe an optimum investment outcome can best be achieved through managing what we call total performance management, which is managing the three dimensions of return, risk and cost.”
Finalist Bridgewater Associates uses a highly diversified strategy, investing in global equity, bond, currency and commodities markets.
US-based senior client adviser Brian Lawlor says: “We believe a deep understanding of the fundamental cause-effect drivers of global markets is essential for adding value in portfolios.
“Bridgewater uses a single-manager approach, and currently has $52 billion invested in its Pure Alpha Strategy, which is made up of a hedge fund strategy and an alpha overlay at various target risk levels.”
Multi-manager HFA is also a finalist in this category, and head of distribution Oscar Martinis says its investment process “is extremely robust with a focus on future risks, a long history of investing in these strategies, a conservative approach to risk management, an independent focus on operational due-diligence, and a strong team culture”.
He believes the multi-manager approach also reduces manager risk.
Winner: Barclays Global Investors
Finalist: Bridgewater Associates
Finalist: HFA Investments
