Sun, Aug 28, 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. Strategies - The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I, Hedge funds get more pushback on terms as enthusiasm for strategy wanes[more]

    The 'Holy Grail' hedge fund strategy to handle a black swan the size of World War I From IBTImes.co.uk: To illustrate a strategic gap common to today's portfolio managers, George Sokoloff, PhD, founder and CIO at Carmot Capital, proposes an interesting thought experiment – a breakdown of

  2. Institutional investors - Investors set to increase allocation to private debt, With investment income key, Richmond retirement system faces funding challenges[more]

    Investors set to increase allocation to private debt Investors are set to increase their allocation to private debt, with 60% revealing they believe the private debt market will grow over the next 12 months, according to a new study by Elian, a leading funds services provider. 41%

  3. Investing - Hedge funds snap up banks, unload Apple, Some of hedge funds' favorite stocks are finally starting to beat the market, Einhorn's Greenlight shifts positions, Treasury yield climbs to two-month high as Fischer joins hawks, 9 stocks smart investors put their money in last quarter[more]

    Hedge funds snap up banks, unload Apple From Barrons.com: Prominent hedge funds have a newfound love of big banks, and some have a distaste for shares of Apple, regulatory filings released last week show. The filings suggest that the funds have been pivoting their portfolios in recent mon

  4. Chesapeake energy seeks $1 billion loan to refinance debt[more]

    From Bloomberg.com: Chesapeake Energy Corp. is seeking a $1 billion loan as the company battered by cratering fuel prices and credit downgrades takes a step to address its $9 billion debt load. The natural gas producer hired Goldman Sachs Group Inc., Citigroup Inc. and Mitsubishi UFJ Financial Group

  5. Institutions - Nordic pension funds magnify focus on unlisted and direct investing, building up teams[more]

    From IPE.com: As bond yields remain at low or negative levels, pension funds and other institutional investors in the Nordic region are stepping up efforts to find higher returns by adding more unlisted investments to portfolios and are expanding in-house teams in order to do this, according to new