Rothschild selects BGI for hedge menu

Rothschild Australiahas selectedBarclays Global Investors’BGI Equity Market Neutral Fund to be part of its fund-of-hedge funds Total Return Fund.

Barclays Global Investors (BGI)’s fund has only been in operation for two months, and according to its founders, it has delivered returns well in excess of expectations since its launch.

BGI head of equity investments Morry Waked says when the fund was launched, BGI was already in talks with a number of players about the possibility of having the fund listed on a hedge fund menu.

“The beauty of it is that it’s a wholesale active manager which is not competing in the retail market, but as part of a fund-of-hedge funds it can reach the retail investors,” he says.

Now that it has been snapped up by Rothschild, Waked says BGI continues to talk with other players about having it as part of other fund-of-hedge funds. He says that long-short investing, which characterises the fund, is now highly sought after by investors.

“We believe BGI’s unique risk-controlled and market neutral approach to managing these strategies makes us an ideal manager for fund-of-funds and institutional clients seeking this type of investment,” Waked says.

This is a point also taken up by Rothschild alternative investments associate director Richard Keary.

“The objectives of the fund are consistent with the objectives of our fund-of-fund so it is a very good fit. In addition to their investment credential, BGI have excellent infrastructure to run these types of portfolios,” he says.

According to BGI, the BGI Equity Market Neutral Fund offers investors the combination of portability, allowing them to use it as a total return product or as a portable alpha strategy, and diversification, allowing them to diversify their core equity and fixed income holdings and risk-controlled investment returns.

The BGI fund aims to deliver a return of 8 per cent more than the cash rate while generating a tracking error of around 5 per cent and, through its long and short security positions, achieving a net exposure of zero to equities.