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Komfie Manalo, Opalesque Asia:

London-based Old Park Capital weathered the volatile 2014 as its Maestro strategy fund reported strong performance and ended November up +21.63% year-to-date (+0.96% during the month). The strategy continued to do well after solid months in September (+1.89%) and October (+1.60%).

Hugo van Kuffeler, Chief Operating Officer at Old Park Capital, said that the market volatility increase in October created good conditions for the Maestro strategy. Although volatility has retreated from reaching the highest levels since June 2012 (36% for the VTOXX and over 26% for the VIX), what happened in October may be a preview of possible turbulence ahead for markets with a blend of historically high asset valuation levels, significant geopolitical risks and uncertain monetary policy dynamics, he said.

He continued, "We are seeing momentary lapses of normalization when the market reacts appropriately to (mostly negative) news flow which is a big step from where we were 12 months ago which saw a US Government shutdown and equity highs on the same day. As central banks begin the process of normalizing monetary policy, price discovery will return to all asset classes. No one can deny that the Fed’s aggressive interest rate policy has pushed all assets up regardless of fundamentals. It would appear that this normalization of policy will instigate a new cycle."

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