The market volatility that characterised much of 2011 proved a key decider in the Money Management/Lonsec Fund Manager of the Year global equities long/short category, with Lighthouse Partners’ HFA International Shares Fund taking out the top spot.
Lonsec said LHP was a quality “fund of hedge funds” manager and praised ISF’s low volatility approach, particularly in light of high levels of volatility over 2011.
The fund aims to produce a portfolio with low correlation between underlying hedge fund managers and equity markets.
Craig Mowll, chief executive of Lighthouse’s Australian partner Certitude Global Investments, said volatility was the one theme that had dominated investment markets since the global financial crisis.
“The fund has delivered on its promise, delivering consistent positive returns with far less volatility than traditional global equity investments. As uncertainty continues, investors don’t want swings and roundabouts with their investments but are craving stability of returns,” he said.
Mowll attributed the fund’s success to the team’s long working history of more than a decade, and its track record of delivering risk-adjusted returns.
Lonsec agreed, saying ISF’s competitive advantage was inherent in the quality and culture of the investment team and the investment process’ emphasis on risk management.
Acknowledging 20 years of managing global equities and over nine years managing long/short portfolios, Acadian’s Global Long/Short Fund was runner-up in the category.
Graham Hand, general manager of funding and alliances for Colonial First State, Acadian’s partner, said their investment process was systematic, objective and consistent, which was “very important to managing long/short portfolios where disciplined portfolio construction is a crucial component”.
Hand said return potential and risk control were at the core of the fund, which uses quantitative methods to make investment decisions in a systematic way.
“The investment process is supported by a research team that includes 16 Ph.Ds dedicated to continually improving performance results,” Hand said.
He said the long/short nature of the fund’s research-driven investment strategy allowed them to source global stocks with high potential and take advantage of opportunities created by potentially underperforming stocks.
Five Oceans World Fund rounded out the finalists. Chief executive at Five Oceans Asset Management Ross Youngman said its strategy focused on bottom-up research to find mispriced companies in the market.
He said disciplined stock selection to locate competitively positioned businesses, coupled with strong risk management, separated its fund from the pack.
Youngman said the fund’s track record had been delivered with lower volatility than the market and had outperformed the MSCI World Index by an average of 5.26 per cent since the fund’s inception in July 2006 to the end of Q1 2012.
Mowll said after the win LHP would set its sights on benefitting from dislocations caused by a lower correlation environment more focused on fundamentals than macroeconomic concerns.
He said the award would be excellent recognition for Lighthouse Partners and “could add to the momentum that is already building around the fund with (their) supporters.”
