Opalesque Industry Update - Gottex Fund Management Holdings Limited (Gottex), a leading independent global alternative asset management group, announces its pre-close trading statement for the year ended 31 December 2010. |
• Further positive performance in fourth quarter of 2010 with main market neutral, multi asset, equity and bond strategies outperforming their relevant indices.
• Gottex Solutions Services (Gottex Solutions or GSS) grows assets 56% to USD 1.58 billion.
• LUMA Solutions Services, the European onshore managed account platform joint venture with OFI Asset Management, received approval in December 2010.
• One of the two flagship market neutral products is expected to reach its high water mark in Q1 2011.
• The company’s public Multi-Asset Endowment Fund and Multi-Alternatives Fund for the US market were approved by the SEC.
• Total fee-earning assets for the Gottex group were USD 8.3 billion, compared to USD 7.8 billion at 30 September 2010.
• Expanding our Asian presence with the move of Board member Max Gottschalk to Hong Kong to lead this growth initiative.
• Strong balance sheet with no debt and substantial cash reserves.
Commenting, Joachim Gottschalk, Chairman and CEO, stated:
“I am very pleased to say that our assets have returned to levels above USD 8 billion, and more importantly performance in our market neutral, multi asset strategies and equity portable alpha strategies has continued to be very good during the fourth quarter. A strong, risk adjusted performance is what our clients expect, combined with advanced risk management and a strong infrastructure.
“We are becoming more positive on the outlook for asset flows to the hedge fund industry in the coming years as investors seek higher risk adjusted absolute returns, albeit that we do not expect a rapid acceleration in the near term. We also continue to be confident that fund of funds represent a very efficient and effective method to invest in hedge funds and multi asset products for retail as well as for the majority of institutional investors. “Finally, I am delighted that GSS assets have grown to over USD 1.5 billion and that LUMA Solutions Services, the European onshore managed account platform JV between OFI Asset Management and Gottex Solutions, was launched on 29 December 2010 after receiving CSSF approval. This enables GSS to offer onshore and offshore managed account services, including UCITs, thereby providing investors with a complete range of managed account solutions.”
Gottex’s total fee-earning assets were USD 8.26 billion at 31 December 2010, up 6.4% from USD 7.76 billion at 30 September 2010. This total consisted of USD 6.7 billion in GFM assets under management (AuM) and GSS assets of USD 1.6 billion. Total assets showed a 14% increase over the second half of the year of USD 1 billion.
AuM of USD 6.68 billion compared to USD 6.75 billion at 30 September 2010, virtually unchanged at -1.1%, as a result of client redemptions, partly offset by subscriptions, performance and technical factors. Total subscriptions for the quarter amounted to USD 670 million (of which USD 570 million were new GSS mandates and USD 100 million were GFM client subscriptions), whilst outflows from run-off share classes equaled USD 30 million and client redemptions accounted for USD 200 million. Foreign exchange added USD 30 million whilst rebalancing and other technical factors increased AuM by USD 10 million in Q4.
Overall net performance in market neutral and portable alpha strategies contributed a positive USD 80 million offset by a performance reduction of USD 60 million in our AB strategies.
Total GSS assets increased to USD 1.58 billion by December 2010 from USD 1.01 billion three months earlier.
Review and plans
Most of the initiatives set out by Gottex management at the start of the second half of 2010 have been successfully completed:
• The company extended the positive performance of market neutral, multi asset endowment, as well as equity and bond index products aiming for the return of incentive fees during 1H of 2011. At the end of December 2010, the flagship market neutral products were between 0.5% and 6.7% away from regaining their high water marks.
• We have continued to grow Gottex Solutions which now has over USD 1.2 billion in assets on its platform and total GSS fee earning assets of USD 1.58 billion. In addition, LUMA Solutions Services, the USD 460 million onshore managed account platform JV with OFI Asset Management, received approval from the Luxembourg regulatory authorities and was officially launched on 29 December 2010.
• We have progressed with our multi-asset strategies growth initiative where the Multi- Asset Endowment Fund and Multi-Alternatives Fund, two public mutual funds designated to the US retail market, were approved by the SEC. Performance of the private multi asset strategies has been excellent in 2010 outperforming their main competitors.
• Our UCITS III product continues to build a positive track record and we have seen a pickup in interest from private banking channels for this type of product.
Going into 2011 the company’s strategy is to maintain its current institutional investment platform, as management believes that asset flows in the industry will improve in the coming years and the majority of flows in the fund of hedge funds industry will be concentrated among the larger firms. The investment team remains fully focused on generating strong performance, firstly to regain the high water marks and subsequently the return of incentive fees, and secondly as this should result in above average client subscriptions. We will continue to focus on our main growth initiatives: Gottex Solutions, our multi-asset endowment business and our UCITS products, with the aim to generate consistent asset growth in each of these areas during 2011. In addition, management is of the opinion that Asia offers strong strategic opportunities for the company and consequently Max Gottschalk, co-founder and one of the company’s executive Board members, will move to Hong Kong by April 2011 to lead Gottex’s development in this region.
As we move forward into 2011, we believe upward market trends will continue during the year, but we are cognisant of the risks and imbalances that exist, and that are likely to add volatility. We are excited about the opportunities in Asia, and feel that emerging Asia will lead the world in both economic growth and financial asset returns. The US economy does have challenges, but we feel that the private sector is recovering nicely whilst Europe is likely to be the most volatile region as we believe that a restructuring of government debt is almost inevitable. Management is confident that the alternative asset management industry will see higher level of asset flows over the foreseeable future, however at a slower pace than before the crises. We are of the opinion that our comprehensive offering in terms of investment products combined with the risk management services of Gottex Solutions will allow the company to gain market share in a competitive market place.
Gottex will announce its 2010 annual results on 24 March 2011 and release its Q1 2011 trading update on 20 April 2011. Please visit www.gottexholdings.com/Presentations.aspx to view the presentation accompanying this release.
Incorporated in Guernsey, Gottex is the holding company of a leading independent global alternative investment management group whose core business is providing investment management services to a diversified range of hedge funds and funds of hedge funds…
With offices in Guernsey, Lausanne, London, Hong Kong, New York, Boston, Luxembourg and Zurich, the Gottex group advises funds that are invested with more than 175 hedge fund managers around the world, investing in a wide range of strategies and geographies on behalf of predominantly institutional investors. As at 31 December 2010, Gottex had USD 8.3 billion of total fee-earning assets.
See our July-2010 Opalesque Exclusive: Gottex launches new fund of UCITS hedge funds as Q2 AuM down 8.3% to $7.26bn Source