Goldman Sachs AIMS Group – Best UCITS-compliant Product
As part of the Goldman Sachs Alternative Investments and Managers Selection Group (AIMS), Goldman Sachs Asset Management’s specialist hedge fund team – AIMS Hedge Fund Strategies – has over 40 years’ experience. With over USD22billion in AUM, the team is one of the largest providers of alternative investment solutions.
One such solution is the GS Dynamic Alternative Strategies (DASP) Portfolio, a Luxembourg-domiciled sub-fund of the GS Funds II SICAV. As an UCITS-compliant multi-strategy FoHF product, which is only available to investors in certain European jurisdictions, the portfolio aims to identify and then invest in the best available hedge fund managers offering UCITS versions of their offshore Cayman funds.
The fund, which currently has USD140million in AUM, was launched in March 2010.
Speaking with Hedgeweek, Rob Mullane (pictured), Managing Director, Goldman Sachs Asset Management, says that the team focuses purely on true hedge fund managers as opposed to simply considering anyone that’s offering weekly liquidity. “One of our initial focuses was to say ‘Who are the offshore managers we already have money with who are willing to offer their strategies using the UCITS structure?’ We soon got to a tipping point where there were enough managers for us to be able to offer a product that was suitably diversified, and multi-strategy in nature.”
Client demand prompted AIMS Hedge Fund Strategies to develop a fund of UCITS hedge funds as the group’s traditional FoHF products, with their relatively limited liquidity constraints, were not always the right fit. “Over the last couple of years we’ve seen increased demand from clients who want to invest in alternative strategies but to do so with a preference for investing in onshore structures,” explains Mullane.
Specifically, the DASP portfolio focuses on four main hedge fund sectors: tactical trading (global macro), equity long/short, relative value and event driven. Currently it is invested in 10 underlying managers, although Mullane confirms that number will soon be 12: “We’ve always felt that we wanted to get to between 12 and 15 managers in the portfolio to be suitably diversified.”
When asked why the portfolio targets the above-mentioned four strategies, Mullane says that they are the “four building blocks that we use across all of our client portfolios”. Tactical trading is a critical component of DAS and perhaps in light of the macro risks dominating global markets, the portfolio has held an overweight position in this strategy for some time.
“One of the issues you have with UCITS funds is that it’s easy to run long/short equity strategies, and therefore you’re likely to get more beta at the portfolio level. What we’re trying to do is find non-correlated strategies and tactical trading in particular lends itself to that. It is one of the higher allocations in the portfolio and has helped us survive some of the equity market drawdowns we’ve seen recently.”
Through June 2012, the DASP portfolio is up 2.9 per cent. It has, says Mullane, been better able to weather some of the market drawdowns and limit losses in event-driven and long/short equity strategies as compared to last year. While equity markets lost some 7 per cent in May, the portfolio limited losses to 2 per cent.
On winning the award, Mullane comments: “We are very excited to be recognised for an award for this product. It’s taken a lot of work to develop this product and get it to market. For us to receive these kinds of awards is always appreciated and hopefully it will be one of many going forward as we look to continue dedicating resources to the UCITS market.”
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