Alternatives mature into mainstream
The alternative investments sector has matured over the past few years to reach a point at which its various styles of investing, particularly hedge funds, are now viewed by superannuation funds as a core component of strategic asset allocation, according to InvestorWeb Research.
The Melbourne-based research group was warm in its assessment of the sector after reviewing 14 funds offered by eight alternative asset managers in its annual alternative investments sector review released on Friday.
“Investors now have the opportunity to tailor an exposure along the risk/return frontier, controlling the expected correlation with mainstream asset classes, amount of leverage used, and the degree of credit risk assumed,” the report states.
Four funds received the highest accolade of making the ‘recommended’ list — these were the Barclays Global Investors (BGI) Global Markets Fund, the ColonialFirst State Diversified Strategies Fund, the Rubicon Asia Fund and BT FinancialGroup’s fund-of-hedge funds.
The BT offering is delivered through US-based Grosvenor Capital Management, while Colonial’s fund-of-funds product utilises Swiss-based Harcourt Investment Consulting and returns to the recommended listing after having been removed following former head of hedge funds Damien Hatfield departing to join Pengana Capital.
BGI and Rubicon were also new additions to the list.
InvestorWeb says it was “extremely impressed with the depth and breadth of investment talent within the sector, which made the resultant task of assessing manager relativities extremely difficult”.
Meanwhile Basis Capital’s Pacific Rim Fund was removed from the recommended list following the research house’s assessment that it has experienced gradual performance erosion over recent years, coupled with an internal lowering of its expected return target.
Other changes include PM Capital and Platinum funds, which are both recommended, no longer being included in the review given they are now rated as part of the group’s traditional equities review.
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