Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
… as future leaders on show with launch of student hedge fund
Among the highlights of the AIMA Australia Annual Forum that showcased the alternative funds management sector was Australia’s newest hedge fund, Australian Students Asset Management (ASAM*).
Launched at the Forum, ASAM is the vision of University of NSW student Doron Haifer who, with the support of his peers and specifically Michael Gallagher, AIMA General Manager and director, has created an investable university student-run hedge fund, registered as a charity and open to industry donations.
The fund’s initial strategy is ESG-skewed to target returns from ASX300 stocks, yet the overarching objective is to provide students with a ‘realistic and immersive funds management experience’ that helps to attract, nurture and build human capital for the industry.
“Many of us older industry folks hail from broker firms, investment banks or other disciplines because there was simply no clear path to forge a career in hedge funds out of university,” Gallagher said.
“Today, there are more opportunities to work in a greater number of diverse funds that must compete with tech titans such as Google and Apple for top talent.
“Further, our industry has endured many pain points, so it’s been hard for hedge fund firms to build a footprint into universities, meet those smart students and allow them to demonstrate their aptitude and talent as potential future leaders in alternative investing.
“This fund is about allowing students to finish degrees as well rounded, motivated industry participants who are able to hit the ground running in roles across the whole spectrum of investment management.
“It has been very encouraging to see the mix of students keenly participating throughout the front, middle and back offices including investor relations.”
Gallagher says the fund will operate at UNSW in close alignment with Sydney, UTS and Macquarie, and then expand to Melbourne allowing for student cycle turnover.
Doron Haifer, having already established the Alternative Investment Society of UNSW, has led the fund’s establishment with Gallagher, shoring up resources and mentors to support all aspects of investment management, from idea inception to execution, trading, risk management, settlement and middle and back office functions such as dealing with administrators, auditors and legal advisers.
Haifer says the fund will invest long and short in the ASX 300 with an ESG filter designed by ASAM that scores companies from 0-10, eliminating companies below five.
“The ESG focus is something students really wanted, and while it is the strategy for now, the fund can shift its strategic focus to whatever the demand is of the students of the time.
“We’re aiming to achieve approximately 15-20 positions, to allow for some diversification while also giving us enough time to put in decent research into our investment ideas.”
Gallagher called for industry participants to consider becoming involved with ASAM as it grows its footprint within universities, as mentors, members of ASAM’s advisory committees and board of directors.
* The current legal name of the fund, pending change, is Student Impact Investment Fund.
