Fri, Mar 29, 2024
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Opalesque UCITS intelligence

Editorial

Friday, May 16, 2014

Why hedge funds?

Total assets under management for the hedge fund sector have reached an historical peak at estimated USD 2.6 trillion in 2013. The projections are at USD 3.3 trillion by 2015 with a compounded annual growth rate at 15%.

Despite these numbers and the general perception in Europe that investors are increasing investment flows, most of them, either pension funds or insurance groups, are still questioning hedge funds in their asset allocation. We notice that recent investment flows into liquid equity strategies come from massive outflows in Managed Futures.

As outlined by Lyxor Asset Management in its latest white paper: in the post-2008 environment, it is no longer possible to consider hedge funds as a single asset class. Lyxor recommends to consider classifying hedge funds in two groups: the substitutes and the diversifiers. The substitutes aim to improve risk/return profiles of portfolios by replacing equities and bonds, the diversifiers aim to generate absolute returns. In a traditional allocation process, investors would consider allocating in equities and bonds with a third complementary allocation in hedge fund; Lyxor values hedge funds within the two core single assets portfolios as equity/bond substitutes with a third diversifier portfolio to be added, composed of strategies delivering more significant alpha.

However, investing in hedge funds is still a very sophisticated process that explains the trust of investors in brand names and the phenomenal success of absolute returns funds managed and distributed by the large asset managers: Schroders, JP Morgan, Henderson or Standart Life Investments. Alternatively, the UCITS platforms are great contributors to facilitate comprehensive accesses to liquid hedge fund strategies. Their success paves the way for even more mature investments in hedge funds.

We investigate in this edition the model of independent platforms and start our country focus distribution analysis by Switzerland: what are the key ingredients to sell in Geneva or Zurich? How to maximize sales efforts?

We hope that you will enjoy this edition and are looking forward to receiving your feedback!

The Lyxor paper “Hedge Funds in strategic asset allocation” is available on www.lyxor.com.

Sophie van Straelen
Editor
Sophie@opalesque.com

Sophie

About your editor: Sophie van Straelen and Asterias Ltd: Sophie van Straelen started her professional career in investment banking spanning derivative markets and hedge funds. Her 12 year experience in investment banking provided a strong base to found Asterias Ltd, the consultancy located in London, specialised in delivering strategic insight in distribution for service providers and hedge fund managers. Listed in 2009 by EFinancial News as one of the top 100 most influential women in finance in Europe, she is a recognized, valuable and independent source of analysis for the media, lobbying groups and investors.



 
This article was published in Opalesque UCITS intelligence.
Opalesque UCITS intelligence
Opalesque UCITS intelligence
Opalesque UCITS 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. KKR raises $6.4bn for the largest pan-Asia infrastructure fund[more]

    Laxman Pai, Opalesque Asia: The New York-based global investment firm KKR has raised a record $6.4bn for its second Asia-focused infrastructure fund, underlining investors' continued appetite for private markets. According to a media release from the alternative assets manager, the figure top

  2. Bucking the trend, top hedge fund makes plans for a second SPAC[more]

    From Institutional Investor: SPACs aren't dead. At least not to the folks at Cormorant Asset Management. The life sciences firm, whose hedge fund topped its peers in 2023, is confident it will match the success of its first blank-check company. Last week, the life sciences and biopharma speciali

  3. Benefit Street Partners closes fifth fund on $4.7 billion[more]

    Bailey McCann, Opalesque New York: Benefit Street Partners has closed its fifth flagship direct lending vehicle, BSP Debt Fund V, with $4.7 billion of investable capital across the strategy. Benefit Street invests primarily in privately originated, floating rate, senior secured loans. The fun

  4. 4 hedge fund themes that are working in 2024[more]

    From The Street: A poor earnings report from Tesla (TSLA) has not hurt the indexes on Thursday. The decline in Tesla stock, which is losing its position in the Magnificent Seven pantheon, is more than offset by strong earnings from IBM (IBM) and ServiceNow (NOW) . In addition, the much higher-t

  5. Opalesque Exclusive: A global macro fund eyes opportunities in bonds[more]

    Bailey McCann, Opalesque New York for New Managers: Munich-based ThirdYear Capital rebounded in 2023, following a tough year for global macro. The firm's flagship ART Global Macro strategy finished the year up 1