Collins Stewart’s fund of hedge funds, the Absolute Return Plus fund, is enjoying a positive return so far this year as it marks its sixth anniversary of its launch.
Collins Stewart’s fund of hedge funds, the Absolute Return Plus fund, is enjoying a positive return so far this year as it marks its sixth anniversary of its launch.
The fund, which aims to deliver consistent returns with an absolute return focus, has returned 1.88 per cent in 2008 up to November 14, compared with a decline of 22 per cent for the HFRX fund of hedge funds index and 24.8 per cent for the MSCI World equity benchmark.
Since its launch in November 2002, the Absolute Return Plus Fund has delivered annualised returns of 8.84 per cent, with no down years, with annualised volatility of 4.3 per cent.
‘Our longstanding expertise in hedge fund selection has helped us protect clients’ capital during the extreme market turbulence,’ says the fund’s lead manager Martin Baxter. ‘We are one of the few fund of hedge funds managers doing what we say on the tin – delivering absolute returns.
‘We took a defensive stance more than a year ago, ensuring that our underlying managers were able to deliver absolute returns without market directionality or leverage. Looking forward we are maintaining our cautious stance but believe that some excellent opportunities will arise in areas such as distressed and convertible bonds. Convertible bonds have recently been sold indiscriminately as institutions continue to de-leverage, producing an opportunity rarely seen in this sector.
‘Despite the headlines, the hedge fund industry retains plenty of talented hedge fund managers continuing to deliver excellent returns. It also remains possible to construct fund of hedge funds portfolios to deliver non-correlated absolute returns. We expect a consolidation in the fund of hedge funds space as investors express their disappointment at poor performance. With our track record, we hope to be able to participate in the industry consolidation.’
Collins Stewart Fund Management is a multi-investment boutique that manages more than GBP400m in the equity, fixed interest, multi-asset and fund of hedge funds asset classes. It is part of Collins Stewart, an independent financial services group employing more than 700 staff and active in advisory, capital markets, securities and wealth management services.
