Fri, Jul 3, 2015
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Asia Pacific Intelligence

GFIA's June insights report a future for best of boutique Asian hedge fund managers

Monday, July 08, 2013

Peter Douglas

GFIA's June insights show a glimmer of increased confidence in the opportunities out there for boutique Asian hedge funds. Peter Douglas, GFIA founder, writes: "At an aggregate level, it's still a very tough world out there. No manager we've spoken to this year has said anything except "asset raising is hard". Even if there's a mini-renaissance, the number of allocators globally that are prepared to write tickets to smaller managers remains far smaller than five years' ago."

However, Douglas reports that there is increasingly some stability, with the better managers gradually attracting some assets back. "As boutiques with limited appetite for scale, some are closing or close to closing. The characteristics of the success stories are generally comparable (happy families all look alike!). The longer experienced managers, that have ten-year track records and a history of riding storms, are at the front of the line. Unsurprisingly, for many investors, if they're to take the perceived risk of allocating to small managers, they want the comfort of longevity and reputation. Ward Ferry, Quest, India Capital… all are seeing some resurgence."

In terms of what Douglas calls 'a distinctive strategy that has some track record but little competition', he focusses on the Asian fixed income strategies and the relative value managers. "Delivering a risk/return profile that is not only successful, but uncorrelated within its universe and hard to find, is a good way to be noticed. Hence managers like Serica, MNJ, and Northwest are gaining traction. Finally, value for money! Much of the reason for the resurgence in unconstrained long managers that we've remarked on frequently, is that, in Asia, good stockpicking (in inefficient markets) is a reliable source of alpha, delivers beta in a part of the world that is delivering economic growth and hence generally rising asset values, and is half the price of a hedge fund. Ask Arisaig, One North, or Albizia."

Douglas attended the Deutsche Asia prime broking event and reports that generally the prime brokers, lawyers, and administrators out there are busy and the pipeline appears to be reasonably full. He writes: "We still believe that the industry is stressed. By number of managers out there, the majority remain stressed and unprofitable. A renewed bout of uncertainty resulting in an evaporation of investor risk appetite would hit the smaller managers hardest. And fees are clearly coming down as large investors' bargaining power meets the clear oversupply of choice in the industry. But we are more positive than we were twelve months ago that there is a future for the best of the boutiques in Asia."

For GFIA's full report, please go to their website, GFIA.

This piece first appeared in Opalesque's Alternative Market Briefing.

 
This article was published in Opalesque's Asia Pacific Intelligence our monthly research update on alternative investments in the Asia-Pacific region.
Asia Pacific Intelligence
Asia Pacific Intelligence
Asia Pacific 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. Opalesque Exclusive: New systematic strategy managed alongside research firm outperforms S&P500[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: An emerging CTA manager explains how he runs his strategy, which is based on an index produced by a research firm. Peter Turk is head of

  2. Opalesque Exclusive: New systematic strategy embraces machine learning[more]

    Benedicte Gravrand, Opalesque Geneva for New Managers: The founder of a New York-based systematic trading firm, which offers a hybrid between alpha strategies and alternative feta at lower fees, describes his approa

  3. Larry Robbins' hedge fund Glenview buys 1m Tenet Healthcare shares[more]

    Komfie Manalo, Opalesque Asia: Glenview Capital Management said it bought an additional 979,482 shares at Tenet Healthcare Corp valued at $53.80 million, raising its stakes in the healthcare services company to 15.16%, reported

  4. Legal - Grayson’s hedge funds under scrutiny for possible ethics violations, Court rejects hedge fund’s motion to block merger of Samsung affiliates[more]

    Grayson’s hedge funds under scrutiny for possible ethics violations From Freebeacon.com: Rep. Alan Grayson is finding himself in hot water over managing hedge funds that bear his name, actions that are in possible violation of House ethics rules. Sitting members of Congress are prohibite

  5. Hedge funds decline in June as stocks tumble on Greek woes[more]

    From Bloomberg.com: Hedge funds posted losses across strategies last month as uncertainty over whether Greece will remain in the euro sent global stock markets tumbling. Winton Capital Management declined about 3.1 percent in June in its $12.1 billion Winton Futures Fund, leaving it down 1.9 percent

banner