Wed, May 4, 2016
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

Zenith completes first Australian hedge fund sector review into institutional offerings

Tuesday, November 09, 2010
Opalesque industry update - Earlier this year Zenith Investment Partners Pty Ltd (Zenith) appointed Hedge Fund specialist Daniel Liptak as Head of Alternatives. The national research provider’s Hedge Fund Review Team headed by Daniel Liptak has announced that following extensive appraisal and analysis, it has completed the first of its expanded Hedge Fund Sector reviews.

The first sector reviewed focuses on Market Neutral and will be followed in the near future by CTA / Global Macro, Long / Short Domestic Equities, Long / Short Global Equities, Event Driven, Multi Strategy, Fund of Hedge Funds and Fixed Income.

Commenting on the Market Neutral Sector review, Daniel Liptak said, “Currently most risk in diversified portfolios arises from equities exposure and this is due to the assumption that over the long run equities outperform. The purpose of the Zenith Market Neutral Sector Report is not to dissect such an assumption, but rather highlight that a significant portion of that equity risk is on the downside.”

“Any investment allocation decision that ignores the consequences of risk and the associated long-term drag on compound returns is deficient. Zenith advocates an investment approach that is designed to minimise this exposure risk.”

The events of 2008 and the subsequent period created an opportunity for the Zenith Hedge Fund Review Team to rationally review the benefits of alternative investments.

“The objections (to hedge fund investments) that were voiced by many commentators regarding liquidity, transparency and leverage are clearly being addressed by the industry,” added Daniel Liptak.

“The negative impact of draw-downs from traditional equities and the affect on long-term compounding is a concern for all investors. Australian market neutral funds have over the last 5 years captured all the upside of the Australian All Ordinaries but importantly did not participate in the downside.”

Zenith’s composite index of approved market neutral funds has delivered a cumulative return of 105%, net of fees, since July 2005.

Over the same period the Australian All Ordinaries Equity Index has returned to investors only 2.24% (gross of fees).

“Zenith affirms that market neutral funds, when combined with long only equity funds can significantly reduce volatility of the portfolio and simultaneously increase the expected return over the longer term.”

On the issue of fees, Daniel Liptak states that while it is true hedge funds do charge higher fees they are in fact not higher than those charged by benchmark aware managers on the active portion of their portfolios.

There is a compelling argument to suggest that hedge fund managers are charging less for alpha than benchmark aware funds.

“Zenith contends that the focus on fees in the benchmark aware space is therefore warranted – but also notes that any discussion on fees should be undertaken with reference to alpha, not just the headline fee rate,”

Commenting on the successful establishment of Zenith’s Hedge Fund Review Team David Smythe confirmed that the national research provider is targeting a segment of the research market that currently is not being well serviced.

“Zenith has therefore sought to extend its coverage, particularly in the Alternatives space for the benefit of not only this target market but also for our existing clients who are interested in more in-depth coverage of Hedge Funds,” concluded David Smythe. Corporate website: www.zenithpartners.com.au

- FG

What do you think?

   Use "anonymous" as my name    |   Alert me via email on new comments   |   
Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing


  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Hedge funds see $14.3bn outflows in Q1, CTAs and multi-strategy lead net inflows[more]

    Komfie Manalo, Opalesque Asia: The hedge fund industry saw net outflows of investor capital in the first quarter of the year, totaling $14.3bn, data from Preqin showed. This continues from the $8.9bn overall net outflows that funds recorded in Q4

  2. Third Point calls Q1 "catastrophic" for hedge funds[more]

    Bailey McCann, Opalesque New York: The first quarter of this year was rocky for hedge funds based on aggregate performance from the industry, but now we are beginning to hear what the managers thought of it as quarterly letters make their way to investors. Dan Loeb, CEO of New York-based $17 bill

  3. Asia - Stabilization of China's capital outflows may hinge on Janet Yellen, Fink says China to do well this year as bubble threat postponed, Chinese hedge fund to invest in India’s infrastructure[more]

    Stabilization of China's capital outflows may hinge on Janet Yellen From Bloomberg.com: Whether China’s recent stabilization of its currency and capital outflows continues -- or downside pressure reignites -- may hinge in large part on Janet Yellen. If the Federal Reserve chair sticks to

  4. …And Finally - After all, judges are human too[more]

    From Newsoftheweird.com: In March, one District of Columbia government administrative law judge was charged with misdemeanor assault on another. Judge Sharon Goodie said she wanted to give Judge Joan Davenport some files, but Davenport, in her office, would not answer the door. Goodie said once the

  5. Comment - Unmasking the men behind Zero Hedge, Wall Street's renegade blog[more]

    From Bloomberg.com: Colin Lokey, also known as "Tyler Durden," is breaking the first rule of Fight Club: You do not talk about Fight Club. He’s also breaking the second rule of Fight Club. (See the first rule.) After more than a year writing for the financial website Zero Hedge under the n