Mon, Feb 8, 2016
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. How Einhorn survived a nightmare year[more]

    From Bloomberg.com: Even when a hedge fund has an awful year, which was the case for David Einhorn's Greenlight Capital, there are lessons to be learned. Many funds would have had a tough time surviving a year like Einhorn experienced in 2015, when all the stars seemed to align against him and Green

  2. Legal - Hedge fund founder wins early release in U.S. insider trading case, Gramercy seeking $1.3 billion from Peru over land-bond dispute[more]

    Hedge fund founder wins early release in U.S. insider trading case From Reuters/Streetinsider.com: Former hedge fund manager Doug Whitman on Tuesday won a reprieve from serving the remainder of his two-year sentence for insider trading after several judges expressed skepticism that his 2

  3. Investing - David Einhorn finds a winner in Michael Kors[more]

    From Thestreetinsider.com: Greenlight Capital hedge fund manger David Einhorn took his lumps in 2015. The fund lost over 20 percent on the year amid bets gone bad being long a plunging SunEdison and short a couple high-flying FANG stocks. However, today Einhorn is again showing his stock picking pro

  4. Investing - Avenue Capital's Marc Lasry: We like European bank loans, Comment: A bunch of hedge fund managers are chasing the 'dream of crushing a major structural problem'[more]

    Avenue Capital's Marc Lasry: We like European bank loans From CNBC.com: European banks are under immense pressure, but at least one prominent hedge fund has found what it thinks is a good opportunity in the wreckage. Marc Lasry, co-founder and chief executive of hedge fund Avenue Capital

  5. Computer-driven hedge funds make money during January’s selloff[more]

    Komfie Manalo, Opalesque Asia: Commodity trading advisers (CTAs) that use computer programs to guide how they trade, made millions of dollars during last month’s market selloff on the back of declining oil prices and global equities and big moves in currencies. Data provider