Thu, Dec 18, 2014
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Industry Updates

IAM: hedge fund industry will grow in 2010 with risk management as key to success; macro, l/s equity and l/s credit best strategies

Monday, December 14, 2009
Opalesque Industry Updates –

Industry Outlook

Morten Spenner, CEO at fund of hedge funds manager, International Asset Management (IAM), believes the hedge fund industry will grow in2010. Morten reflects on the key challenges that the fund of hedge funds and hedge fund industries have faced in 2009 and how these will be addressed in 2010.

- Stabilisation of the industry: Outflows have subsided greatly, inflows have returned and a large core set of managers have demonstrated their ability to remain successful. Allocations to hedge funds will continue to grow in 2010 in response to the uncertain macro-economic environment.

- Ensuring the right risk-reward balance: Performance in 2009 has been strong, albeit at a significantly reduced risk-level. There is less need for leverage, a strong bias towards liquid positions and the risk-reward balance has been particularly attractive over the past six months.

- Risk management a core focus: Risk management tools are being further honed and managers are particularly sensitive to preserving capital.

- Being transparent with clients: All market participants are recognising the need to establish stronger relationships with clients and the need to proactively share information on exposures.

- Enhancing operational standards: Hedge funds and fund of hedge funds will continue to invest in people, processes and infrastructure in 2010. They have had to place increasingly more emphasis on adapting their business models to respond to a more discerning institutionally focused client base.

- Reacting to regulatory initiatives: Hedge funds in general are in favour of commercially sound regulation and will continue to be committed to supporting new legislative initiatives and/or new product launches.

Investment Outlook

The unprecedented dislocation in markets will continue to provide opportunities for nimble, intellectually-strong players, says Andrew Gibson, Head of Asset Allocation. Andrew comments on his outlook for 2010 and which hedge fund strategies he thinks will perform best in 2010.

- The uncertainty between a deflationary or an inflationary world will continue.

- Governmental monetary and fiscal policy shifts will greatly influence markets.

- Underlying growth drivers and the pace of growth will vary significantly.

- Individual companies will continue their fight for both survival and market share, and valuation anomalies will allow for value extraction.

Hedge fund strategies for 2010: - Macro managers will be able to extract value from fixed income, FX, and commodity themes based on timing, geographical biases, and growth divergences.

- Long/short equity and long/short credit managers will benefit from fundamental analysis as well as trading skills in an environment that will allow for positive attribution on both the long and the short side.

- In all three strategies, macro, long/short equity and long/short credit, we see no reasons for deviating from liquid, tradable portfolios that enable strong risk frameworks.

IAM is an independent fund of hedge funds investment management firm founded in 1989, with offices in London, Stockholm and New York. www.iam.uk.com


Be

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. Investing - Big hedge funds win again on PetSmart, Riverbed, RBS sells real estate loans to hedge fund Cerberus, Talisman energy speculation: Which hedge funds could benefit?[more]

    Big hedge funds win again on PetSmart, Riverbed From CNBC.com: Another week, another set of wins for activist investors. On Sunday, pet supply retailer PetSmart agreed to the largest leveraged buyout of the year at $8.7 billion. Hedge fund firm JANA Partners had been pushing for a sale a

  2. Outlook - Hedge fund manager who remembers 1998 rout says prepare for pain, Bond guru Bill Gross predicts U.S. economic growth to dip to 2%[more]

    Hedge fund manager who remembers 1998 rout says prepare for pain From Bloomberg.com: Stephen Jen landed in Hong Kong in early January 1997 as Morgan Stanley’s newly minted exchange-rate strategist for Asia. He was soon working around the clock when investors began targeting the region’s

  3. Opalesque Exclusive: U.S. legal receivables fund launched in August[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Investing in asset-backed receivables is a strategy that has been an integral part of the alternative investment space within the overall fixed income asset c

  4. Comment - High fees and low performance hit hedge funds[more]

    From FT.com: Disenchantment over high fees and lackluster performance may finally be turning the tide against hedge funds, fresh data suggest. Despite generally weak returns since the global financial crisis, hedge funds have enjoyed positive net inflows every year since 2010. This helped assets und

  5. Performance - Lansdowne, Man Group, other hedge funds profit from shorts in oil, Turmoil boosts hedge funds that bet against Russia, oil, CTAs post strongest returns since December 2010[more]

    Lansdowne, Man Group, other hedge funds profit from shorts in oil From Valuewalk.com: The rising short interest in oil companies implies that the worst for oil is yet to come. Data from Markit shows that short exposure in energy sector of S&P 500 is still looming close to the highest mar