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By Benedicte Gravrand, Opalesque London:
In the mid-90s, most French investors invested in CTAs because they liked and understood derivative products. However, from around 2000, as CTAs’ performance dropped, French investors turned to equity long/short single hedge funds. And recently, they favoured French-regulated and domiciled funds of hedge funds (FoHFs) – which goes against the interest of local CTAs as most French FoHFs invest in offshore funds which are managed outside France. So French CTAs, which have had good performance in the last couple of years, for lack of local investors – institutional and HNWIs – now mainly raise assets outside France, especially in the US.
Heard around the coffee table at the recent Eurohedge conference in Paris, was that half of French FoHFs have disappeared since the beginning of the crisis. But it is indeed assets that have suffered.
“Between June-08 and June-09, almost 50% of assets left the industry,” confirmed Sophie van Straelen, managing director of the advisory firm Asterias Ltd, to Opalesque, “as French FoHFs suffered greatly from exposure to Madoff’s funds and the use of gates and side-pockets. So French flagship FoHFs such as Allianz Alternative Asset Management’s Pheniz lost around 50% of their assets in a year.” As in the hedge fund industry globally, outflows were most severe between September and December 2008.
Various structures
French CTAs are not usually as big in terms of AuM as t...................... To view our full article Click here
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