About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   depositrates.co.nz  |   landlords.co.nz
Last Article Uploaded: Monday, September 26th, 7:39PM
rss
Latest Headlines

Quality of hedge managers declining

A London hedge fund expert warns investors to be cautious when selecting hedge fund managers.

Thursday, December 13th 2001, 12:15AM

Not all hedge funds managers are created equal, and investors need to be cautious about who they give their money too.

That's the message from London-based David Smith who is the chief investment director of the GAM Multi Manager group.

He says with the proliferation of hedge funds in the past year to 18 months people need to be cautious when selecting managers.

"Quality is being replaced by quantity," he says. "And quantity is being supplied by some relatively inexperienced (managers) in the hedge fund world."

He says new managers have an increased, or added risk.

"There's many new entrants which have good one, two or even sometimes three year track records, but (they) have been managing less than US$10 or 15 million and all of a sudden they are going to have hundreds of millions of dollars at their disposal."

Smith says investors should seek out managers with long track records. They should also find out how much money they have been managing (and for how long), and they need to seek reassurance that a fund has adequate liquidity.

"I think caution is to be definitely encouraged because quality is definitely falling."

While Smith sounds a note of caution, he isn't trying to put people off hedge funds. He says there are talented investment managers out there, you just have to look harder to find them.

Smith, who managers money for Tower's GAM Multi-Trading fund, says there are good opportunities for managers in the global macro style of investing. (This is where managers try to make money based on predicting which way economies or asset classes such as fixed interest or currency, are heading).

"Global macro strategies offer some great opportunites in the next 6-12 months."

He says the market volatility which has been around for two years is likely to continue for another six years.

This volatility and market dislocations are good conditions for global macro traders.

Smith is less keen on the more popular long/short strategies.

"The outlook for them is a little bit more difficult," he says.

The key problem managers have is executing short-selling strategies. Smith says managers are identifying good stocks to short sell on fundamental research, however "pure momentum is driving them out as those stocks rally."

« Rothschild looks for a partnerSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Volatility hits NZ Super Fund
    “If you read the NZ Super Fund's mandate, withdrawals don't start until 2032/33 and the fund will continue to grow until 2080...”
    15 hours ago by thombentley
  • Warminger faces $1m penalty per trade
    “This is shaping up to be an interesting case and I am sure all the other people who up until recently engaged in the same...”
    17 hours ago by Brent Sheather
  • Dormant products drive replacement business: Adviser
    “Backstage It will be popular with poachers. But the game keepers will have a much bigger voice. Say you wrote a policy...”
    19 hours ago by Dirty Harry
  • Commission ban 'errant nonsense'
    “When I am charged entry fees or commissions by an Adviser at least I know the amount and can feel the hand of the adviser...”
    23 hours ago by mike6156@gmail.com
  • Dormant products drive replacement business: Adviser
    “Another situation that may reduce the need for replacement is removing or going forward stop renewal commission being vested....”
    1 day ago by Backstage
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.59 4.75 4.79 4.99
ANZ Special - 4.25 4.29 -
ASB Bank 5.55 4.69 4.75 4.89
ASB Bank Special - 4.25 4.29 4.34
BankDirect 5.55 4.69 4.75 4.89
BankDirect Special - 4.25 4.29 4.34
BNZ - Mortgage One 6.25 - - -
BNZ - Rapid Repay 5.70 - - -
BNZ - Special - 4.29 4.29 4.49
BNZ - Std, FlyBuys 5.64 4.85 4.89 4.99
BNZ - TotalMoney 5.64 - - -
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 6.70 - - -
Credit Union Baywide 5.95 4.99 4.99 -
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct 6.10 6.45 6.69 7.10
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heretaunga Building Society 5.60 4.85 4.90 -
Housing NZ Corp 5.55 4.69 4.75 4.89
HSBC Premier 5.75 4.19 4.19 4.49
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - 3.79 -
ICBC 5.60 4.39 4.69 4.99
Kiwibank 5.25 4.70 4.75 4.29
Kiwibank - Capped - - - -
Kiwibank - Offset 5.25 - - -
Kiwibank Special - 4.19 4.19 -
Liberty 5.69 - - -
Napier Building Society 6.50 5.80 6.70 -
Nelson Building Society 6.10 4.85 4.99 -
NZ Home Loans 5.45 4.69 4.75 4.75
NZ Home Loans - Specials - - - -
Lender Flt 1yr 2yr 3yr
NZ Home Loans - Specials - 4.19 4.19 4.29
Perpetual Trust 7.70 - - -
Resimac 5.19 4.94 4.90 4.91
SBS Bank 5.54 4.75 4.89 4.99
SBS Bank Special - 4.25 4.15 4.55
Sovereign 5.65 4.69 4.75 4.89
Sovereign Special - 4.25 4.29 4.34
The Co-operative Bank 5.45 4.25 4.35 4.49
TSB Bank 5.54 4.75 4.75 4.99
TSB Special - 4.25 4.19 4.59
Wairarapa Building Society 6.20 5.75 5.95 -
Lender Flt 1yr 2yr 3yr
Westpac 5.65 4.79 4.85 4.99
Westpac - Capped rates - 5.15 5.25 -
Westpac - Offset 5.65 - - -
Westpac Special - 4.25 4.29 4.49
Median 5.65 4.69 4.75 4.89

Last updated: 26 September 2016 9:58am

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com