Deutsche Asset Management has today released its latest hedge fund offering for retail and institutional investors, the Deutsche Global Equity Long/Short Fund.
The sector-specific, multi-manager absolute return fund is an Australian market first, investing in international equities through 21 global equity managers using a diversified range of global long/short equity related strategies.
Deutsche Asset Management Absolute Return Group head David Zobel says the management of the fund is aimed at seeking absolute positive returns, rather than just outperforming a market index.
“It comes down to the manager’s stock selection and their skill and not the market, but how they shift away from market based risk,” he says.
Using a long/short selling strategy, the Deutsche Global Equity Long/Short Fund has the capability to profit in rising and falling markets and Zobel says this is the key point of difference from traditional equity funds.
“Traditional funds don’t short sell stocks, limiting their profit making opportunities to rising stocks only,” he says.
The fund has been launched with a minimum investment of $5000 recognising demand from the retail market Zobel says. It will be availble through a prospectus as well as through master trusts and wraps.
This week Deutsche also dropped the minimum investment of its other absolute return fund the Strategic Value Fund from $49,000 to $5,000. When launched in December 1999 the fund originally had a minimum investment of $250,000.
Deutsche Asset Management chief investment officer Andrew Fay says with expected returns from traditional asset classes falling to single digits, alternative styles such as hedge funds are expected to be the fastest growing area globally and are rapidly emerging as a traditional asset class.
“In the next five to ten years, probably closer to five, these funds will become a traditional asset class for private investors and high net wealth individuals,” Fay says.
A$9 billion of Deutsche’s A$1.1 trillion worldwide funds under management currently sits in absolute returns funds, including $850 million in Australia.
The Global Equity Long/Short Fund is Deutsche’s second hedge fund offering in what it is calling the Deutsche Absolute Spectrum, a growing range of absolute return products. The Deutsche Strategic Value Fund was the first.
Zobel says Deutsche will continue to move ahead with strong growth for the range.
“This certainly isn’t going to be the last thing we’ll put out to the market,” Zobel says.
