Some members are excited for retirement, while others approach it with a “real sense of shame and fear”. Funds are going to have to figure out how to cater to both groups or risk failing them all.
If there’s one lesson for investors from the past five years, it’s that chopping and changing their strategy – even in the face of massive market turmoil – doesn’t always pay.
AIMA expands Aussie Forum with specialist sessions
The AIMA Australia Forum, the biggest hedge funds and alternatives conference on the Australian calendar, is expanding by offering concurrent streams for attendees this year. The Forum is on September 12 at the Sofitel Wentworth in Sydney.
Against the backdrop of improved investment conditions and a resurgence of interest in alternatives strategies, according to a new Prequin research report, the Forum will offer: operational, compliance and regulatory streams – getting down to the nitty gritty of hedge funds for serious investors.
These more specialist streams will complement the investment-oriented panels and presentations taking place in the morning sessions.
The keynote speaker is Thomas Weber, a co-founder and CIO of hedge fund investment at LGT Capital Partners, the Swiss-based US$50 billion manager. The firm has offices in about 10 cities around the world, including Sydney.
Hedge funds outperformed both equities and bonds on a risk/return basis last year, according to Prequin data, giving a boost to the recent inflows. Prequin is a big global hedge fund research firm.
The managers’ risk-adjusted return, as measured by the Sharpe ratio, was 1.45 for the year, ahead of the S&P 500 at 1.1, the MSCI World (0.68) and Barclays Global Aggregate (0.20), according to AMIA and Prequin.
Hedge funds also outperformed stocks and bonds on a risk-adjusted basis over three years and five years. Risk-adjusted outperformance is highly valued by institutional investors such as pension funds since it reflects volatility as well as net returns.
On an absolute basis, hedge funds returned 7.4 per cent last year, according to the Preqin All-Strategies Hedge Fund index.
AIMA and Preqin estimated, in a January release, that the net gain in the value of hedge fund assets in 2016 represented $120 billion. That would be the value of investment profits net of all fees, were investors to withdraw their investments and crystallise those gains.
The research, based on a database of more than 3,000 funds, also addressed the performance of hedge funds that are open to outside investors and those that are closed to investors. On a five-year annualised basis, closed funds returned 6.42 per cent per annum on average, while open funds earned 6.75 per cent per annum on average.
A more recent study by Prequin, published this month, showed that hedge fund investors in Asia-Pacific are mixed on their future allocations to the asset class, but remain more positive about the industry compared to investors in other regions.
In November 2016, a survey conducted by Preqin found that although investor dissatisfaction with 2016 performance was prevalent, less than half of Asia-Pacific-based investors said their portfolios had not met expectations, compared with two-thirds of all other investors.
Asia-Pacific-based investors also have mixed intentions for their hedge fund portfolios over the short and long term. The majority intend to invest less capital in 2017 than in 2016, but over the longer term less than a third intend to reduce their exposure, while an equal proportion will look to increase it. This is twice the proportion of investors in other regions that will look to invest more in hedge funds in the long term.
Info about the AIMA Forum, including remaining sponsorship opportunities, contact: [email protected]
