Thu, May 28, 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. Investing - Hedge funds buy swathes of foreclosed subprimes, force up rents, float rent-bonds, Hedge funds buy Actavis, Valeant. ETFs join the party, The most loved biotechs of big hedge funds, Stocks to buy ... according to hedge funds, Atlantic City bond offering attracts hedge funds as buyers, Okumus Fund Management discloses huge new Ascent Capital Group stake[more]

    Hedge funds buy swathes of foreclosed subprimes, force up rents, float rent-bonds From Boingboing.com: When a giant hedge fund is bidding on all the foreclosed houses in a poor neighborhood, living humans don't stand a chance -- but that's OK, because rapacious investors make great landl

  2. Institutions - Institutional investors turn to real estate, planes, Assets at Bostonís five biggest family nonprofits rise to $3.5bn[more]

    Institutional investors turn to real estate, planes From Joins.com: The National Pension Service and domestic emerging market specialists who did not know where to invest in a low interest rate environment are turning to other investments like the blue-chip real estate market abroad.

  3. Regulatory - Hedge funds face tax as Iceland poised to end capital controls, Comment: Why alternatives need more transparency, not enforcement[more]

    Hedge funds face tax as Iceland poised to end capital controls From Bloomberg.com: Hedge funds and other investors who bought claims against Icelandís failed banks face a tax that targets the lendersí estates as the government prepares to unveil its plan for exiting capital controls in t

  4. Opalesque Exclusive: BMO launches multi-strat '40 act fund[more]

    Bailey McCann, Opalesque New York: As we reach new market highs, investors are looking for a way to diversify and protect their portfolios from a potential market correction. Liquid alternatives are rapidly gaining ground as a critical tool for investors to use to mitigate downside risk. The BMO

  5. All hedge fund strategies rebounded last week as market conditions normalize[more]

    Komfie Manalo, Opalesque Asia: After a difficult start this month, all hedge fund strategies ended last week in positive territory, as the Lyxor Hedge Fund Index gained 0.9% (-0.2% MTD, 3.3% YTD). According to Lyxor AMís latest Weekly Briefing, in t

banner