Wed, 22/10/2008 - 07:11
Gottex Fund Management Holdings, an independent alternative asset management group, has announced that its assets under management declined by 13.6 per cent in the third quarter, from USD15.6bn to USD13.5bn, as a result of performance and net redemptions.
The firm says the fall in assets is mostly down to negative performance in extremely challenging markets, although its market neutral and directional products performed better than or at least in line with broad market indices and hedge fund benchmarks.
Client subscriptions for the period totalled USD380m, compared with redemptions of USD870m, bringing net investment outflows over the first nine months of the year to USD550m. Currency fluctuations and other rebalancing factors had a negative impact on assets of USD190bn in the third quarter, while performance accounted for a USD1.44bn decrease.
Market neutral and directional strategies saw assets decline 13.1 per cent in the third quarter, from USD10.13bn to USD8.80bn, while asset-based strategies saw a 15.8 per cent drop, from USD3.90bn to USD3.29bn. Assets in enhanced index strategies fell 3.2 per cent from USD610m to USD590m, and advisory mandates saw a 15.2 per cent fall from USD1bn to USD850m.
Gottex says the negative impact on performance has continued into October. But while increased redemptions from hedge fund products are expected notably from high net worth individual and private banking clients, Gottex believes the institutional sector will prove more resilient. as it is driven by the diversification benefits of alternative investments as well as performance.
The firm says it continues to compete for substantial institutional mandates, but believes that subscriptions will remain affected by the volatility in financial markets and a related slowing of decision-making amongst investors.
It expects a further short-term downward impact on assets under management due to deleveraging trends, investor portfolio adjustments resulting from concentration issues and liquidity requirements as well as currency movements, but believes that structural factors for the alternative asset management industry remain positive and is upbeat about its long-term growth prospects. Gottex says it will be well placed to capitalise on the market dislocations when markets stabilise.
'The third quarter was a period of deepening and unprecedented turmoil in the global financial markets,' says chairman and chief executive Joachim Gottschalk. 'We believe the events of recent weeks have awakened the broader community to the magnitude of the problem and the need to successfully implement a concerted solution.
'It is difficult to predict exactly the timing of any turning point, but our view is that a market neutral diversified portfolio across many strategies, which are at extreme valuation points, is likely to generate strong performance when market stability returns.'
Gottex, whose holding company is incorporated in Guernsey, provides investment management, portfolio selection and asset allocation advice to a diversified range of hedge funds and funds of hedge funds, as well as risk management and investment monitoring services to an institutional client base.
The group also structures and manages specialised funds of hedge funds, managed accounts and real asset funds. Gottex has offices in Lausanne, London, Hong Kong, New York, Boston, Zurich and Luxembourg, plus an associated office in Sydney, and advises funds that are invested with more than 165 hedge fund managers.
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