Derivatives specialist and fund manager Reech AiM has reassured investors in its new Iceberg Alternative Real Estate I fund, a real estate relative value fund, by announcing good performance for August.
According to portfolio manager Stephen Ashworth, the fund delivered a return of 5.04 per cent for August net of fees and expenses, placing it amongst the top performing funds in all categories during the worst month for hedge funds in seven years, with an average decline of 1.3 per cent, according to Hedge Fund Research.
Since the launch of Iceberg in May, the fund has delivered a net 6.87 per cent. Ashworth says all strategies within the fund have delivered a positive return over the month, with the out-performance primarily derived from Iceberg's exposure to listed real estate stocks and property derivatives.
Allocations in the fund across the range of strategies remained broadly unchanged from the end of July and the level of gearing in the fund remained constant at an extremely low level, which explains the particularly high level of liquidity available.
'We do not believe that the turmoil of the current liquidity crisis is over, but the prevailing conditions are providing potentially very interesting opportunities for Iceberg,' Ashworth says. 'A full reassessment of risk and its true price is underway in all markets.
'Big questions remain about the likely impact on the global economy of the current lack of confidence and liquidity in the financial markets. In light of the market turmoil, Iceberg may consider making the most of opportunities in the unlisted market, as well as in the property derivatives area.'
Noting the fund's low volatility, group risk manager Piotr Chmielowski adds: 'The first two weeks of August saw the worst of the current liquidity crisis, so it is reassuring to see that Iceberg performed so well during the month. This was achieved by the fund capitalising on existing positions in real-estate derivatives and successfully exploiting shorter-term trading strategies.'
The Iceberg Alternative Real Estate I fund is a joint venture partnership between CB Richard Ellis, the world's largest property advisory firm, and Reech Alternative Investment Management.
Iceberg I is a relative value absolute return fund that is targeting Libor +15 per cent and investing in a range of financial instruments with exposure to real estate assets including listed securities, unlisted real estate vehicles and property derivatives.
Established in April 2006, Reech AiM offers a range of active quant and alternative investment strategies. The firm seeks to offer investors including institutions, high net worth individuals, charities, endowments and foundations access to emerging asset classes as well as liquidity and superior scalability in hedge fund-style investments.