London-based fund of hedge funds manager Liongate Capital Management has appointed Melanie Herbert as its first head of client services.
The move comes as investor flows into the top-performing Liongate Multi-Strategy fund have now reached USD 200 million in the 18 months since launch. The Fund has returned +32.29 per cent since launch in April 2004, making it one of the world's best performing funds of hedge funds
Herbert joins from FRM, one of the world's largest fund-of-hedge-funds managers with USD 12 billion under management, where she was a director and held similar positions in client servicing and product structuring. Her remit at Liongate will include investor relations, managing relationships with intermediary advisors, and the structuring, developing and launching of new products for Liongate Capital Management. She will report directly to Randall Dillard and Jeff Holland, partners of Liongate Capital Management. During her six years at FRM she saw the firm grow its assets under management from USD 250million to USD 12 billion.
'Melanie's appointment as Head of Client Services comes at a time of substantial reallocation of assets among the fund of hedge funds sector as investors re-examine their portfolios,' says Liongate partner, Randall Dillard. 'Investors will be looking to re-deploy investments at the start of 2006 within the fund of hedge fund sector. We are in a strong position to capture those flows and we are delighted to have Melanie and her strong experience on board.'
Commenting on Herbert's appointment, Jeff Holland, partner, said: 'The wide ranging performance among funds of hedge funds in the last 12 months has led to investors becoming more discerning as regards the type of fund of hedge funds they choose. One trend we have observed is the adoption of a core-satellite approach to investing, with allocations to large funds of hedge funds as the anchor (or core) to an institutional portfolio combined with smaller allocations to boutique, more nimble funds of hedge funds, in order to boost performance.
'The endowments and pension funds that are now one of the fastest-growing segments of investment into funds of hedge funds require a higher as well as more tailored disclosure of information to suit their specific fiduciary needs. Melanie will ensure the firm's growing investor base will continue to receive a high level of service.'
Herbert herself is relishing the new challenge ahead. 'Institutional allocation to hedge funds, although growing quickly, still remains very low,' she says. 'As institutional allocation to hedge funds increases, investors will demand a deeper level of client servicing, both at the information flow level as well as in product development. Liongate is already benefiting from a redeployment of assets within the sector and I look forward to the opportunities ahead.'
Background notes: An active management approach regularly re-evaluates the weightings of the Liongate's Multi-Strategy fund's strategies and tilts the portfolio towards those that are expected to outperform in their current market cycle. As of end October 2005, the fund was invested in 35 hedge funds worldwide. The major allocations were to Equity long/short (22 per cent), event-driven (16 per cent), fixed income (14per cent), emerging markets (13 per cent), sector specialist (12 per cent), multi-strategy (11 per cent), shareholder activist (8 per cent) and volatility arbitrage (2 per cent).
The fund has returned +32.29 per cent since inception (USD class), with annualised volatility of 5.10 per cent, which is very low when compared to the high returns achieved. This compares with a return for the HFR Fund of Hedge Fund Index of 7.37 per cent for the same period with annualised volatility of 3.96 per cent.
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