Opalesque Industry Updates -
Infiniti Capital today announced it has signed a significant advisory
mandate with an Australian institutional client, its first such deal in
the Australian market. The deal increases Infiniti Capital’s assets
under management and advice by several hundred million US dollars to
total over US$1 billion. |
Infiniti Capital Chief Executive Ian Shearer says, “We are pleased to be able to announce the first of what we hope will be many such initiatives in Australia, which we see as a key growth market for Infiniti. As some of our larger competitors have fallen by the wayside after being exposed to Bernie Madoff or being caught in the systemic de-leveraging resulting from the credit crisis, there are new opportunities for an innovative company like us.”
Infiniti Capital is a boutique asset manager which has historically specialised in emerging manager hedge fund of funds mandates, alongside offering bespoke solutions for institutional clients.
The company has established a permanent Sydney office, strengthening its Asian focus, which encompasses the head office in Hong Kong and extensive back and middle office capabilities in Christchurch. It has representatives visiting Japan regularly.
Darren Katz has been appointed as head of Infiniti Capital’s Australian business. Katz, who brings a wealth of local knowledge from his previous role at HFA, sits on Infiniti Capital’s Investment Committee so is involved in formulating the company’s investment strategy.
According to Katz, “The long-term expected returns of funds of funds, in particular, lie between bonds and equities, depending on the composition of the portfolio. The proper strategy for investment in funds of funds is either as an adjunct to a balanced portfolio or superfund or as an alternative to such funds for high net worth individuals.”
The collapse of the Madoff empire has irrevocably changed the funds industry. Infiniti Capital’s Hong Kong-based CEO Ian Shearer says, “In the post-Madoff world, some institutions are attempting to switch to running their hedge fund books in-house. It is a clear response to the failure of a number of large fund of funds shops to avoid exposure to Madoff’s investment vehicles.
“However, the operational and qualitative due diligence process required to adequately vet hedge funds requires a specific set of skills and can be very labour and time intensive, often costing as much as US$10,000 to US$15,000 per fund. If pension funds parcel out this work to their existing staff, it is unlikely to produce better results in the medium term,” he says.
“Infiniti Capital analysts have extensively evaluated more than 1000 hedge funds in the last five years and we have another 2700 funds on our proprietary database. In addition, we have been expanding our traditional funds of funds offering to include more systematic and long-only products.”
New analytics software revolutionizes portfolio construction
Shearer says this has been aided by an internally developed suite of analysis and portfolio management tools which is in the process of being commercialised as the Infiniti Analytics Suite (IAS). See previous coverage New analytics software revolutionizes portfolio construction: Source and Modified Volatility - 1937 paper found relevant to today's risk management challenges: Source
Opalesque readers can sign up for a free 30 day trial of this software here: www.infiniti‐analytics.com/opalesque and receive a free Opalesque subscription.
“Our frustrations with using existing modelling systems forced us to develop our own. The software is designed to help portfolio managers save time and money through more effective risk monitoring.”
In Japan, the financial world turmoil prompted institutions to defer decisions about fund purchasing. “Japan remains our largest market and we are pleased to see Japanese institutions begin allocating to hedge funds again. There is a lot of interest in products that overcome the perceived weakness of traditional funds of funds by providing improved liquidity and transparency,” Shearer says.