An ASIC report notes the boom in demand for this asset, saying it heightens the need for “better-quality data” about the size of this sector where estimates range between $1.8 billion and $188 billion.
CPA Australia has weighed into the debate about the cost to oversee the industry, adding its voice to those who argue the fee structure favours the larger funds.
Gender issue in alternatives to spark more debate
(pictured: Jane Buchan)
The issue of gender diversity – or lack of it – in the alternatives space will be aired at the upcoming AIMA Australia Forum in Sydney. It is more difficult for female hedge fund managers to raise money from investors despite comparable returns with their male counterparts.
Jane Buchan, one of the keynote speakers at the Forum, at Sofitel Wentworth Sydney on September 13, will raise the issue as part of a broad ‘state-of-the-nation’ address for the industry. She is the chief executive of the US$9 billion hedge fund manager PAAMCO.
Various studies have shown that female-led fund management firms provide returns, which are as good or better, than the average but they struggle to raise a proportionate amount of money from clients.
One of the most popular recent events organized by the 3TOM group was a debate in Sydney in June about gender diversity. It was claimed that fewer than 10 per cent of hedge funds in the US were run by females and participants were divided on whether affirmative action was required to break the biases in the industry. Celine Kabashima, a portfolio manager at AMP Capital who moderated the debate, is also speaking at the AIMA Forum.
David Walter, PAAMCO director and Asian head of research, said that the Forum’s theme of “deliverability” encompassed many areas, including fees and charges which were inevitably questioned by investors.
“But there are lots of ways that institutional investors are using hedge fund strategies in their portfolios,” he said. “The old way of putting, say, 5 per cent of a fund into a hedge fund ‘bucket’ has been superseded by using the strategies to enhance the whole portfolio,” he said.
PAAMCO, for instance, uses managed accounts rather than funds which enable it to offer investors various overlay strategies.
In Asia, Walter said, a lot of investors were looking to trade in opportunities arising from anomalies caused by new yield-oriented products and the search for yield in a low-to-zero interest rate environment was having a knock-on effect in other asset classes.
