Stenham Asset Management has launched two funds of hedge funds – Stenham Credit Opportunities and Stenham Healthcare. Stenham Credit Opportunities launched on 1 January 2013 with USD21m and has returned 3.44 per cent since inception.
The fund is a concentrated portfolio of credit managers, targeting eight to 12 per cent annualised returns and allocates across the full spectrum of credit strategies, investing in best-in-class managers in credit long/short, structured credit and distressed debt strategies which are often unavailable to traditional investors. Allocations to individual strategies are managed dynamically as opportunity sets evolve. The fund invests in six to 10 high conviction managers and offers quarterly liquidity with 95 days’ notice. The fund has a 25 per cent gate.
Stenham Healthcare also launched on 1 January 2013 with USD15m and has returned 7.48 per cent since inception. The fund is a concentrated portfolio of managers focused on the healthcare sector, targeting double digit annualised returns. The fund invests in primarily equity based healthcare strategies with around six to 10 managers with proven track records. The fund attempts to give investors exposure to the healthcare sector via experienced specialist healthcare managers and offers monthly liquidity with 35 days’ notice.
Stenham has been invested in credit and healthcare strategies for over 20 years as part of other portfolios the firm manages. It has launched the two standalone funds in response to increasing investor demand for niche, focused funds of hedge funds.
Tim Beck (pictured), senior research analyst and fund lead for Stenham Credit Opportunities, says: “We launched Stenham Credit Opportunities as a stand-alone credit-focused fund as we saw compelling opportunities in the market. Credit markets tend to be structurally inefficient with
many investors prohibited from holding certain assets e.g. defaulted debt. Our portfolio invests in three key areas: credit long/short; structured credit; and distressed debt. The fund is focused on managers who can actively short and benefit from the asymmetry in credit; the fund will take more directional exposure in structured credit and selected distressed investments, including liquidations as well as opportunities from bank deleveraging.
“Many investors are wary of investing in on-the-run credit and fixed income securities given current yields. We believe the greater breadth of investments offered through this product, coupled with funds actively shorting segments of the market offers a compelling investment alternative.”
Dominique Montier, senior executive and fund lead for Stenham Healthcare, says: “The Healthcare sector provides a compelling story offering both growth and defensive characteristics. Both demographic changes such as an aging population and the emerging middle class in developing markets are contributing to long-term structural growth for the sector. From a valuation perspective, valuations are still at historically low levels. Our portfolio attempts to combine specialist healthcare managers with complementary skills in a way that should provide outsized returns and reduced volatility relative to the overall healthcare indices.”
Stenham has broadened its range of funds in recent years with the launch of Stenham Helix, a global macro fund of hedge funds with 35 day liquidity, in January 2012; and Stenham Emerging Markets, a long biased fund of funds, in September 2012. The firm has 13 funds in total variously focused on multi strategy, global macro, equity biased, credit and commodity strategies.
