Hedge fund managers band together

A group of hedge fund managers have got together and formed the New Zealand Absolute Return Association to promote their style of investment.

Tuesday, September 6th 2005, 7:03AM

Chairman Andrew Freeman-Greene says there is an opportunity to develop a cluster of hedge fund managers in New Zealand.

“It is quite neat that a manager can be sitting in New Zealand, trading the international capital markets, with money raised from New York and London. That was unthinkable a few decades ago.”

Freeman-Greene says the regulatory and structural environment is a major impediment to growth of the industry, and that NZARA will try to improve the situation.

“New Zealand has never asked itself – do we want these types of fund managers here?

"We want that issue to be addressed because the default setting which we have is a clear no," he says.

“Australia has a regime that encourages the industry growth and they have a vibrant and growing industry because they have recognised the benefits to developing an industry with capital market expertise.“

He says encouraging the sector is a no brainer, as it creates expertise in capital markets, wealth, clusters of excellence, and a platform to keep and attract some of the country's brightest talent.

"The New Zealand Superannuation Fund is an exciting development that will help foster the funds management industry in New Zealand. They are going to become an enormous allocator with a sizeable allocation to alternative asset managers – why can’t some of them be home grown where the manager can be more easily monitored and fostered?"

He says the association wants to change the perception and improve the profile of alternative managers.

"It is too easy to dismiss the first entrants in this space in New Zealand as mavericks and small."

The assocation also wants to make the regulations less onerous than they are.

"New Zealand doesn’t have the infrastructure or the critical mass to build a cost effective regulatory environment for hedge funds. We need to make use of those in place in Australia or, more appropriately America."

"We also want to be involved in discussions about whether there is a regime that would encourage managers to locate here."

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