Thu, Oct 27, 2016
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque UCITS intelligence


Friday, May 16, 2014

Why hedge funds?

Total assets under management for the hedge fund sector have reached an historical peak at estimated USD 2.6 trillion in 2013. The projections are at USD 3.3 trillion by 2015 with a compounded annual growth rate at 15%.

Despite these numbers and the general perception in Europe that investors are increasing investment flows, most of them, either pension funds or insurance groups, are still questioning hedge funds in their asset allocation. We notice that recent investment flows into liquid equity strategies come from massive outflows in Managed Futures.

As outlined by Lyxor Asset Management in its latest white paper: in the post-2008 environment, it is no longer possible to consider hedge funds as a single asset class. Lyxor recommends to consider classifying hedge funds in two groups: the substitutes and the diversifiers. The substitutes aim to improve risk/return profiles of portfolios by replacing equities and bonds, the diversifiers aim to generate absolute returns. In a traditional allocation process, investors would consider allocating in equities and bonds with a third complementary allocation in hedge fund; Lyxor values hedge funds within the two core single assets portfolios as equity/bond substitutes with a third diversifier portfolio to be added, composed of strategies delivering more significant alpha.

However, investing in hedge funds is still a very sophisticated process that explains the trust of investors in brand names and the phenomenal success of absolute returns funds managed and distributed by the large asset managers: Schroders, JP Morgan, Henderson or Standart Life Investments. Alternatively, the UCITS platforms are great contributors to facilitate comprehensive accesses to liquid hedge fund strategies. Their success paves the way for even more mature investments in hedge funds.

We investigate in this edition the model of independent platforms and start our country focus distribution analysis by Switzerland: what are the key ingredients to sell in Geneva or Zurich? How to maximize sales efforts?

We hope that you will enjoy this edition and are looking forward to receiving your feedback!

The Lyxor paper “Hedge Funds in strategic asset allocation” is available on

Sophie van Straelen


About your editor: Sophie van Straelen and Asterias Ltd: Sophie van Straelen started her professional career in investment banking spanning derivative markets and hedge funds. Her 12 year experience in investment banking provided a strong base to found Asterias Ltd, the consultancy located in London, specialised in delivering strategic insight in distribution for service providers and hedge fund managers. Listed in 2009 by EFinancial News as one of the top 100 most influential women in finance in Europe, she is a recognized, valuable and independent source of analysis for the media, lobbying groups and investors.

This article was published in Opalesque UCITS intelligence.
Opalesque UCITS intelligence
Opalesque UCITS intelligence
Opalesque UCITS intelligence
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. David Einhorn speaks on passive investing, Mylan, his cheapest stock, the Fed[more]

    From Greenlight Capital hedge fund manager David Einhorn (Trades, Portfolio) joined nine other famed investors on Tuesday to talk about stocks at the annual Great Investors’ Best Ideas Investment Symposium in Dallas. Presenters at the annual conference typically pitch one or severa

  2. Investing - Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities, Lansdowne's Roden says likes animal genetics company Genus[more]

    Fund set up to buy illiquid hedge fund stakes finds plenty of opportunities From As ValueWalk reported back in February, earlier this year Andrew Lawrence set out to raise $250 million to $500 million for a fund that will buy stakes in hedge funds that have suspended redem

  3. Opalesque Roundtable: Style drift, poor communications and credibility fatigue are biggest red flags for hedge funds investors[more]

    Komfie Manalo, Opalesque Asia: Style drift, poor communications and credibility fatigue are the biggest red flags for hedge funds investors, said participants of the latest 2016 Opalesque Investor Roundtable, sponso

  4. Barclay CTA Index down 0.40% in September (+0.10% YTD)[more]

    Managed futures traders lost 0.40% in September according to the Barclay CTA Index compiled by BarclayHedge. The Index is up 0.10% year to date. “The US Fed, in spite of its hawkish tone, opted to hold rates steady which roiled financial markets,” says Sol Waksman, founder and president of BarclayHe

  5. Opalesque Exclusive: Meet Emma, your friendly A.I. helper[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: Shaunka Khire, who co-designed an artificial intelligence (AI) robot called EMMA/MANSI, talks to Opalesque