New Managers November 2012

Perspectives - Recent news, views and findings of interest to new hedge fund managers and investors

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Pension funds turn to emerging managers

Some of the world's largest pension funds are increasingly turning to emerging managers to generate alpha, PIonline.com reported. "There is renewed interest in emerging managers, stemming in general from investors looking for diversity among managers - not necessarily just on an outperformance level but also (in terms of) diversity in investment ideas, which may be coming from smaller firms," Andrew Junkin, managing director at investment consultant Wilshire Associates Inc. based in Denver, told the paper.

This month's Focus article tells you more on the biggest U.S. pension fund's investments in emerging managers.

Emerging CTAs viewed as strong outperformers by investors

CTAs are down on average 1.3% (BarclayHedge) so far this year, but investors still view this strategy as a valuable investment. More specifically, they see emerging CTAs as significant outperformers, according to a new industry survey conducted by UK-based Autumn Capital Partners LLP, and US-based Efficient Capital Management for Opalesque. The survey looked at more than 200 responses from CTAs, investors and service providers.

44% of respondents said that a CTA with $50m in assets or less would be considered emerging. In order to break out of the emerging class, over half of those surveyed said they need to see a three-year track record. 51% said that the background of the manager has a significant effect on investor confidence in a newer firm. And......................

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This article was published in Opalesque's New Managers a top-down monthly analysis, news and research publication on the global emerging manager space.