By Benedicte Gravrand, Opalesque London: One should really look at the best FoHFs performers, not at the average performance, argues AXA IM’s head of FoHFs.
Christoph Manser, global head of AXA IM Fund of Hedge Funds (FoHFs), gave a talk on whether these funds had failed to deliver, at the GAIM conference in Geneva last week. His main message was: “the market is downbeat, but that is not necessarily warranted.”
Compare apples with apples Manser said that it was possible make a fair assessment when comparing quartile performances. At the moment, people are comparing funds indiscriminately, “apple with oranges”. But investors should not allocate to anything else but the top quartile managers – which can be found when comparing apples with apples. The top quartile returned -3.5% between June 07 and September 08, making it the second or third asset class (same as investment grade credit).
FoHFs can be compared as an asset class (although they are not); but investors should also look at them as long term absolute return investments with low volatility.
Good FoHFs management does not need to be reviewed, he said. The basic principles, namely diversification, focus on risk management, proper management selection, do not need rewriting. “At AXA, strategy allocation is also very important,” he added.
Opalesque met with Christoph Manser, who joined AXA IM from Winterthur Insurance where he had been head of alternatives for seven years, and who currently shares his time between London and Zurich.
He said: “We are going through an adjustment process which will not be painless.” And that process will especially affect those that should not have had money at the first place – the weaker funds.
The Group’s backing AXA IM is part of the French giant group of insurance companies AXA, headquartered in Paris and founded in 1985 by Claude Bébéar. So does this give the AXA IM a better chance to survive the market downturn?
“Yes,” Manser said, “FoHFs which are backed by big institutions are more likely to survive.” He thinks that boutiques are d......................
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