Colonial puts advisers back in classroom
Known in the hedge funds industry as a patient investor, Colonial FirstState Global Asset Management’s hedge fund team has shown that it pays to be well educated on an investment product before rushing in.
Prior to accepting new investors, Colonial’s flagship fund of hedge funds, the Wholesale Global Diversified Strategies Fund, offers financial planners and trustee boards of superannuation funds an accreditation program specific to the product, its risks and strategies.
The head of Colonial’s fund of hedge funds, David Bell, said Colonial developed the course because it wanted people to really understand its product before they used it.
According to Bell, an important part of this is to demystify the risk story surrounding hedge fund products.
“Individually hedge fund managers may be targeting high volatility,” Bell said.
“But when you put them all together in a fund of hedge funds there is low volatility.”
Bell said Colonial’s fund of hedge funds delivered annualised volatility of less than 3 per cent (since inception) compared to an approximate 9 per cent annualised volatility for Australian equities.
Colonial has recently celebrated the five-year milestone of the fund.
The hedge funds team advises on investments to the value of $500 million.
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