Australian bank Macquarie excelled where others struggled last year as assets in its market neutral equity l/s Asian hedge fund nearly tripled to AUD640million, reported Reuters.
Australian bank Macquarie excelled where others struggled last year as assets in its market neutral equity l/s Asian hedge fund nearly tripled to AUD640million, reported Reuters. Performance-wise it didn’t too badly either, generating annualised returns of +15.97 per cent to outperform the markets (MSCI APAC Index returned +12 per cent). By comparison, the average equity l/s returns for Asia in 2010, according to Eurekahedge were +8.01 per cent. One of the architects behind the Macquarie Asian Alpha Fund’s success, co-manager Andrew Alexander, believes that whilst the fund could soft close when assets reach AUD1billion there is capacity for it to reach AUD1.25billion. “The pipeline is strong. We are seeing a number of British and US institutions that are interested in the product,” said Alexander.
The fund’s investment strategy uses quantitative screening techniques and fundamental bottom-up analysis to identify which Asian stocks to go long or short in. Alexander said he believed that it was “steadier returns with low volatility” that had lured institutional investors, adding that Macquarie’s global marketing initiatives and strong liquidity record during the global financial crisis, during which they honoured approximately AUD500million in redemptions, had also played their part in securing new assets in 2010. Another factor, said Alexander, was that despite Asia having a preponderance of equity l/s funds, very few were market neutral and competition was low. What’s more, few Asian hedge funds were able to offer “institutional-grade services” to attract pension funds. An important point given the ever-growing “institutionalisation” of the hedge fund industry, not just regionally but across the globe, with investors spending far more time doing their due diligence. Goldman Sachs International is the fund’s prime broker and custodian.
