James Williams, news editor, Hedgeweek

State Street celebrates 3rd anniversary of fixed income fund, Dechert reports on possible ASEAN funds passport…

Assets of the Matrix Lazard Opportunities Fund have merged with the newly created Dublin-domiciled Lazard Opportunities Fund following the recent decision by Matrix Group to close its dedicated UCITS platform reported Investment Europe this week. 

It becomes part of Lazard Global Investment Funds, an Irish-registered open-ended investment company. Lazard Opportunities Fund is a relative value capital structure and convertible arbitrage fund focused on special situations and events trading and offers investors weekly liquidity. Commenting on the new fund Mike Wariebi, head of alternative investments in Europe and the Middle East at Lazard Asset Management said that they anticipated “significant demand” for the fund given that the market will see USD90billion of convertible debt maturing over the next few years. 

"We believe companies looking to re-finance debt and restructure may create opportunities in special situations,” said Wariebi. Sean Reynolds based in New York leads the investment team which comprises six fund managers. Reynolds was quoted as saying: “The emphasis on shorter-dated trades where outcomes are more definable provides appropriate exposure to the beta of the asset class, but also helps to cushion during periods of risk aversion from the alpha generation delivered via special situations.”       

Hermes Fund Managers has launched a UCITS-compliant version of its US small and mid-cap fund, aimed at capturing performance opportunities outside of the large cap market, reported Citywire Global this week. The fund will replicate the strategy managed by Hermes Small & Mid Cap boutique team, which launched in 2001. Robert Anstey, who leads the nine-strong team, will also oversee the new Hermes US SMID Equity Fund. Hermes said that this latest addition would complement its existing fund range, which among others includes the Hermes UK Small & Mid Companies Fund.
 
The US SMID Equity Fund will target a long-term investment approach, with a typical average holding period of three to five years. Said Anstey: “The European market is poorly served in terms of Ucits funds offering accessibility to US small and mid-caps at present. This investment strategy is designed to offer investors a relatively low risk way of investing in the asset class.” The US version of the fund has returned 10.7 per cent since inception. 
 
A report authored this week by Angelyn Lim and Kylee Zhu of Dechert LLP (Hong Kong) entitled ‘An ASEAN Funds Passport?’ has concluded that its development still has some way to go. They point out that although Thailand and Singapore have taken the lead thus far, they still need to “iron out the exact details and mechanisms of their respective initiatives over the coming months. Wrote the authors: “For a truly ASEAN funds passport to become a reality, more concerted effort is required from the rest of ASEAN (whose member countries also include Vietnam, Philippines, Malaysia, Indonesia, Laos, Cambodia, Brunei and Myanmar). Nonetheless, given the different stages of economic and political development among different ASEAN member states, it is unlikely that all of ASEAN will be prepared to take the initial big leap.” They pointed out that other potential pioneering participants might include Malaysia and Indonesia.
 
“Given ASEAN’s history of regional cooperation, there is every possibility that an ASEAN funds passport may come to pass,” wrote the authors.     
 
The SEB banking group has made its Dynamic Manager Alpha fund available to retail investors through a new UCITS-compliant format. The fund of funds, which is managed by fund selectors Andreas Johansson and Otto Francke, was launched in 2008 for institutional investors. But as Kerstin Cooley, senior product manager for hedge funds at SEB, commented: “As retail investors become more sophisticated and independent in making their investment decisions, they continue to ask for access to institutional products which offer high-quality, security and returns. They are now an increasingly important segment in our overall investor base, and over the last years have shown growing interest in our investment strategies.”  
 
Finally, congratulations to Stratton Street Capital who this week celebrated the third anniversary of their UCITS fixed income fund with USD1billion in AUM. The New Capital Wealthy Nations Bond Fund was launched in 2009 with EFG Asset Management to invest in investment grade bonds and has, in that time, generated 9.5 per cent in annualised returns. 

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