Swiss alternative investment company Altin delivered a positive investment performance of 13.57 per cent for 2009, outperforming the HFRI Fund of Funds Index which recorded 11.55 per cent.
Altin’s highly liquid portfolio allows the investment manager to implement a dynamic approach to portfolio management and to benefit from current investment opportunities.
This translated into a significant investment programme into hedge funds in 2009, which was prolonged in the first quarter of 2010.
As the financial crisis deepened towards the end of 2008, the outlook for hedge funds was very poor. In fact, 2009 turned out to be one of the best years in the decade for hedge funds in terms of investment performance, despite a drop in assets under management and a larger than usual level of fund closures. Interest in the asset class rebounded in the second half of the year, with positive net inflows and a number of successful new launches.
According to Altin, 2009 proved to be a very good year for global stock markets, with the benchmark MSCI World Index returning 23.3 per cent, the S&P 500 climbing 23.5 per cent and the Nikkei posting 19.0 per cent (in local currency).
The combination of various positive factors, such as the surprising recovery of the global economy, the coordinated sharp reductions of interest rates by global central banks and quantitative easing dominated the investment landscape in 2009.
However, markets remained very volatile and the first quarter of the year witnessed a peak in terms of investor pessimism and negative sentiment. Hedge fund managers held up much better than traditional asset classes and ended up posting positive returns for almost every month of 2009, whilst keeping leverage at very low or inexistent levels. The HFRI Fund of Hedge Fund Index was up 11.55 per cent, with almost all strategies being positive, the notable exception being CTAs/managed dutures.
The severe crisis of confidence in 2008 led investors to sell all assets considered to be risk-prone, with hedge funds being the prime target for this sudden aversion to risk. Altin was exposed to strong selling pressure and, as a consequence, suffered from a significant price discount in 2008, which reached 33 per cent at year-end. In 2009, the normalisation of market conditions in 2009 enabled the price discount to shrink to 19.9 per cent at year-end.
