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Investors are becoming increasingly aware of the fact that global markets will, at some point, move towards a higher interest rate environment. This will happen at varying speeds depending on the region, with the US and the UK most likely to raise rates before continental Europe for example.
Over the last 30 years the yield on US 10-year Treasuries has declined by around 25 basis points annually. As Michaël Malquarti, co-head of alternative investments at Syz Asset Management points out, not only has this led to a massive boost in bond prices but at the same time equity prices have
Liquid alternatives are one of the fastest growing areas of the asset management industry. In Europe, assets grew from EUR36bn to EUR236bn between 2008 and 2014, according to a Deutsche Bank report released last September (entitled From Alternatives to Mainstream Part Two).
By definition, liquid alternatives are dynamic trading strategies that combine the sophisticated, goal-driven strategies of the hedge fund universe with the daily liquidity, transparency and regulatory oversight of mutual funds.
At Harcourt, the alternative investments boutique of Vontobel Asset Management, the Research-Driven Strategies (RDS) team, headed up by Dr Jan Viebig (pictured), Head of Alternative Investments, has developed
Overall, last year was a positive year for hedge funds in the sense that assets continued to grow, to the point where the industry reached USD2.8trn in total AuM. However, from a performance perspective it certainly wasn’t an easy one.
There are three aspects to explaining this. First, the beginning of 2014 saw quite strong market rotation. There were sector rotations in equity markets in March and April, leading to losses in long/short equity funds to the tune of -0.63 per cent and -0.89 per cent according to Barclayhedge.
Second, on the macro side, fundamental macro traders were positioned in
Interview with Steven Bulko, CIO, 1798 Fundamental Strategies, Lombard Odier Investment Managers…
Equity markets are close to or at their historic highs. How do you see the big picture for equity investors?
While developed economies have been recovering since the 2008 – 2009 global recession, the pace of that recovery has been varied. The US economy has improved but growth in Europe and Japan has stagnated, leading to a divergence in monetary policy – the Fed is progressively moving out of its accommodative monetary policy while the ECB and BOJ are embracing new strategies involving Quantitative Easing to provide stimulus.
Over the last few years the S&P 500 Index has gained approximately 65 per cent, while the Nikkei 225 has gained 113 per cent. The impact of quantitative easing has led to unparalleled growth in equity markets, to such an extent that hedge funds have largely lagged behind.
“In our opinion it’s not just “raw” underperformance but a combination of underperformance and fees. This is leading investors to ask, “Why do I pay so much to receive so little?” says Nicolas Rousselet (pictured), Managing Director and Head of Hedge Funds at Unigestion.
Put simply, today’s low rate environment has created
“One of the most important considerations for us when choosing the legal representative was that they had a strong compliance structure,” affirms Leila Khazaneh (pictured), general counsel at Jabre Capital Partners, one of Switzerland’s most established hedge fund managers.
Khazaneh says that the service provider they settled on was an independent specialist whose team have a legal and auditing background, as opposed to a firm with more of a marketing and fund distribution bias.
“When the new rules were published by FINMA, some companies viewed it as a new commercial opportunity; all funds distributed in Switzerland would have to appoint
Interview from Lugano, Switzerland’s third financial centre, with Gian Luigi Trucco, Swiss Association of Asset Managers…
With revised CISA in place and the introduction of the Swiss legal representative, how do you assess the current climate in the Swiss funds industry?
For the different actors, including the smaller ones, the implementation of the new rules and the establishment of a Swiss legal representative, in case of distribution, has turned out to be a relatively easy and fairly tolerable cost. Particularly if compared to heavier burdens and expenses that other rules and accomplishments, both domestic and international, imply for them, at a time
The sands of time are running out for hedge fund managers wishing to continue distributing their funds to Swiss investors. As of 1 March 2015, any foreign hedge fund looking to raise assets in Switzerland from qualified investors will be required to appoint a Swiss legal representative and paying agent.
Qualified investors are defined under CISA (Collective Investment Scheme Act) as including pension funds, corporates and individuals with at least CHF5m in financial assets. Previously, only those funds that were registered for public offerings – which is now referred to as distribution to non-qualified investors – had to appoint a
Blue Sky Alternative Investments Limited (ASX: BLA) has appointed Neil Power as managing director of its hedge fund division.
Power brings more than 20 years of experience working in the hedge fund industry. He most recently was a partner at Australian-based advisory and placement firm Allen Partners.
In 2007, Power joined Boronia Capital, one of Australia’s oldest and largest hedge funds, where he was instrumental in helping triple the fund’s Assets Under Management (AUM) to $3 billion.
Based in Blue Sky’s Sydney office, Power will work to grow Blue Sky’s hedge fund business in Australia and internationally.
Blue Sky Alternative
While the past several years of regulatory uncertainty have frustrated, if not left, the derivatives industry treading water, capital markets research firm TABB Group, in new research, believes the coming post-Dodd-Frank period portends to be a watershed moment in innovation and migration for many capital markets firms.
Now that final parts of the new regulatory landscape for over-the-counter (OTC) and exchange-traded derivatives (ETDs) may be nearing enactment – seven years after the global financial crisis that set the process in motion and five years after the Dodd-Frank law set the framework for sweeping new regulations, TABB Group principal, head of
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