Fri, Sep 19, 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. SEC charges 19 investment firms and one trader for breach of Rule 105[more]

    Benedicte Gravrand, Opalesque Geneva: The Securities and Exchange Commission (SEC) started a push to enhance the enforcement of Rule 105 of Regulation M last year to uncover hedge funds and private equity firms that have illegally participated in an offering of a stock after short selling it duri

  2. Fund managers, bullish on Europe, anticipate monetary policy separation of Fed and ECB[more]

    Komfie Manalo, Opalesque Asia: At least 202 fund managers with $556bn of assets under management said that while the European Central Bank (ECB) has eased its monetary policy that sent sentiments towards Europe to pick up, the Fed is expected to hike its rate in the spring of 2015. Investor

  3. Institutions - North Carolina workers call on state pension to dump up to $6bn in hedge funds, UK pension fund criticizes hedge fund fees[more]

    North Carolina workers call on state pension to dump up to $6bn in hedge funds From Forbes.com: The State Employees Association of North Carolina this afternoon called on state Treasurer Janet Cowell to withdraw all investments in hedge funds, which appear to amount to approximately $6 b

  4. News Briefs - Limited partners of investment managers may be subject to self-employment taxes, Just one week left until NYC's Rocktoberfest[more]

    Limited partners of investment managers may be subject to self-employment taxes On September 5, 2014, the Internal Revenue Service (“IRS”) issued Chief Counsel Advice 201436049, concluding that members of an investment manager were subject to self-employment taxes with respect to their e

  5. Institutions - Adviser's faith in hedge funds unshaken by CalPERS' move Advisers weigh in on CalPERS’ decision, Gina Raimondo sees no reason to follow California’s lead, exit hedge funds, Danish pension funds step up 'alternative investments'[more]

    Adviser's faith in hedge funds unshaken by CalPERS' move From WSJ.com: Financial advisers who use hedge funds in their clients' portfolios say they aren't rethinking that approach after a huge California pension fund announced plans to exit the hedge-fund market. The decision by the Cali