Tue, Sep 2, 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. Study shows what resonates with investors: 'Unwavering', 'passionate' beats 'committed', 'dedicated' and more surprises[more]

    Komfie Manalo, Opalesque Asia: A new study by Pershing, a unit of BNY Mellon company, showed that an effective value proposition strengthens audience connections and fosters growth, yet many advisors have had little objective guidance in formulating such statements until now. In the study

  2. Legal – GE Capital and Petters-related hedge fund in legal battle, SEC sanctions Donald Brownstein's hedge fund over conflicts of interest[more]

    GE Capital and Petters-related hedge fund in legal battle From Startribune.com: A billion-dollar legal battle is brewing in Florida over who knew what and when about the decade-long Ponzi scheme operated by former Wayzata businessman Tom Petters. The bankruptcy trustee for two failed Flo

  3. Managed futures' global diversification is important in next phase of economic recovery[more]

    Komfie Manalo, Opalesque Asia: The global diversification provided by managed futures may prove to be extremely valuable as the markets enter the next phase of the economic recovery, said Campbell & Company, a pioneer in absolute return invest

  4. Comment – Why you should avoid the hottest hedge fund hands, Swedroe attacks Hussman over risk management, relative value strategy[more]

    Why you should avoid the hottest hedge fund hands FromCNBC/Yahoo.com: Investors who don't have money with Pershing Square Capital Management are likely salivating at the hedge fund's industry-leading 26 percent return from January through July. But investing with Bill Ackman and other to

  5. Ex-UBS prop trader's hedge fund Manikay Partners eyes UK launch[more]

    From eFinancialnews.com: Manikay Partners, a $1.7 billion US multi-strategy hedge fund set up in 2008 by a proprietary trader from UBS with backing from Goldman Sachs, is planning to open in the UK. New York-based Manikay's move into Europe comes after Financial News revealed on Monday that Aurelius