Lonsec expands hedge fund research and signs deal with Rapid Ratings

ResearchhouseLonsdale Securities(Lonsec) has added eight hedge fund/fund-of-funds products to its ‘recommended’ list within its Hedge Fund Sector Review and has also signed a deal with corporate credit ratings agency Rapid Ratings to provide ratings on the issuers of Australian listed fixed income investments.

The new hedge fund/fund-of-fund products that are included in Lonsec’s sector review take the total funds surveyed by the firm to 12, says Lonsec researcher Richard Everingham.

Five of the funds reviewed were fund-of-funds, of which three received a ‘recommended’ rating and two an ‘investment grade’ rating, with none being rated ‘highly recommended’.

“The lack of ‘highly recommended’ ratings in this sector reflected the fact that all managers reviewed failed to achieve their longer term absolute return targets over the assessed period,” Everingham says.

Six single hedge fund products (offered by four managers) were also reviewed, resulting in two ‘highly recommended’ ratings, three ‘recommended’ ratings, and one ‘investment grade’.

The two top single-strategy ratings went to theBasis CapitalAust Rim Fund and thePortfolio PartnersHigh Growth Shares Trust.

The eight new products consisted of two fund-of-funds — theColonial First StateGlobal Diversified Strategies Fund and theAXAWholesale Global Diversified Hedge Fund, and six single strategy funds — the Portfolio Partners High Growth Shares Trust, thePM CapitalAustralian Opportunities Fund, the PM Capital Absolute Performance Fund, the Basis Capital Aust Rim Fund, the Rubicon Asia Fund and the Rubicon M&A Fund.

Meanwhile, the deal with Rapid Ratings involves the latter supplying Lonsec with bi-monthly corporate credit and issue ratings for bonds, debentures and capital notes for a range of companies.

Lonsec managing director Norman Graham says the deal was struck in the light of investment advisers and investors demanding more rigorous analysis of all types of securities.