Outflows mount for K2 Australia Absolute Return fund

k2 absolute return fund

16 August 2019
| By Laura Dew |
image
image
expand image

Assets on the K2 Australian Absolute Return fund have continued to decline as it reports continued underperformance.

Earlier this year, the fund reported a $41m outflow in one month after it saw redemptions from a large single investor. This saw it fall to $143 million and assets have since fallen further to $137 million.

Total funds under management (FUM) at the firm were $239 million, across six funds, and the firm said this was the first year it had reported a net pre-tax loss.

In its full-year results for the year to 30 June, 2019, the firm said the Australian Absolute Return fund lost 7.6 per cent over the period.

Only two of the firm’s six funds reported positive returns; Select International Absolute Return and Asian Absolute Return fund which saw returns of 0.7 per cent and 0.5 per cent respectively.

K2 said the fund outflows were ‘disappointing’ but was hopeful of inflows coming from a partnership with Principals Fund Management.

“While attracting additional FUM is still a key focus, outflows disappointingly continued. K2 sees the outflows as a symptom of the late stage of the current growth/momentum market cycle.

“In FY19, significant progress was made by partnering with Principals Fund Management to access quality participants in the wholesale market. We believe this is where FUM growth will ultimately come from, with the wholesale market understanding equity cycles and the value of a long-term track record.”

Despite the underperformance, the firm reiterated it would be sticking to its investment strategy.

“K2 does not necessarily believe there needs to be a catalyst that will force market participants to return to valuation and profit models. We believe investors will soon reach a point where they see the gap in pricing between value and growth as being far too wide and unsustainable.

“In the wake of FY19, K2 will stay true to our strategy with conviction through the late stage of this economic cycle.”

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

3 weeks 4 days ago

This verdict highlights something deeply wrong and rotten at the heart of the FSCP. We are witnessing a heavy-handed, op...

1 month ago

Interesting. Would be good to know the details of the StrategyOne deal....

1 month ago

Insignia Financial has confirmed it is considering a preliminary non-binding proposal received from a US private equity giant to acquire the firm. ...

1 week 3 days ago

Six of the seven listed financial advice licensees have reported positive share price growth in 2024, with AMP and Insignia successfully reversing earlier losses. ...

5 days 16 hours ago

Specialist wealth platform provider Mason Stevens has become the latest target of an acquisition as it enters a binding agreement with a leading Sydney-based private equi...

4 days 20 hours ago