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By Beverly Chandler, Opalesque London:
3A Alternative Funds, the alternatives asset division of SYZ Asset Management and a large player in the fund of hedge funds sector has posed the question: 'Is 2011 a repeat of 2008 for hedge funds?’ in a letter to investors published today.
In answering that question, 3A believes that overall hedge funds are today in a better shape than they were in 2008. The letter says: "Many asset managers are sitting on the sideline and they are not aggressive in adding risk back to their portfolio. They do not want to repeat the same mistakes they made in 2008 when they added back risk too early."
However, the firm believes that in the current uncertain environment, undermined by
sovereign debt problems, they would continue to favour liquid hedge fund strategies within alternative investments. "While August was a difficult month for risky assets, some
alternative strategies such as managed futures were able to generate positive returns over the period, proving again the attractiveness of hedge funds in terms of performance and
diversification" the note says.
The firm says that the 2011 situation is not a repeat of 2008 for hedge funds:
overall, their portfolios are more liquid, are running with
lower leverage and benefit from better diversified
counterparties.
They also point to the growth of assets under management in the industry, surpassing the $2 trillion mark this year for the first time in history, according to HFR. "The ...................... To view our full article Click here
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