The Hedge Funds Review European Hedge Fund of Funds Awards 2004 brought together the top echelon of Europe's fund of funds industry, and then on 9 December picked the cream of this crop for its awards winners Funds of funds have continued to take in record amounts of money during 2004, having to juggle increasing demands from traditional and new investors with issues of industry capacity, gaining access to top managers and maintaining healthy performance.THE JUDGINGThe judging process, undertaken by Jacob Schmitt from London's Allenbridge HedgeInfo, Phil Irvine from London's Liability Solutions, Raffaello Nemni from UBS and David Walker from Hedge Funds Review, included both quantitative screens and qualitative analysis of the 113 applicants.While categories for returns looked primarily at performance, categories that included risk and volatility also used measures such as standard deviation, Sortino ratio and drawdowns to ascertain which funds came first in their category.Categories that relied less on hard data - such as best high-net-worth/retail group or institutional group, or best newcomer - also took into account the group's main client base, transparency, process, reporting and, of course, performance of the group.AND THE WINNERS ARE…The first winner from the evening was charity Care, to whom attendees generously gave £6,800 to build on their work in sex education for London's teenagers.In the hedge fund industry the first award honored the best long-term performance by a fund of hedge funds over at least 10 years. Past winners included the biggest established players in Europe's hedge fund industry. The shortlist was peopled by impressive applicants again in 2004 - Crédit Agricole (GreenWay Investment Limited Fund), La Fayette's Regular Growth Ltd and Gam (Diversity). Naturally Raffaello Nemni exempted himself from judging of all awards where GAM was shortlisted, due to GAM's relationship with UBS.The winner in this case, however, with annualised returns between September 1994 and August 2004 was Olympia Star I Trust Ltd (US$) whose 10.59% annualised return and maximum drawdown of -3.94% impressed the judges.The second award was for the best-performing diversified fund of funds over three years to August 2004, on a risk/return basis, sorting funds by Sortino ratio using a risk-free rate of 3%.Gottex made its first entry to the awards shortlist with the twice-leveraged version of its Market-Neutral Fund as did Permal with Global High Yield Holdings and Aurum Funds with Aurum Investor Fund. However, the winner was the Signet Global Fixed Income Fund (dollar share class) returning 12.21% annualised - the highest of 47 entries, with a maximum drawdown of - 1.35% and second-highest Sortino of 7.59.The third award sought out the best-returning diversified fund of funds over one year, also accounting for the riskiness and sorting funds on the basis of Sortino with a risk free of 2%.International Asset Management's Alternative Investment Strategies (AIS) with a maximum drawdown of -1.04% the judges felt was excellent, was joined by Gottex once more, and Pioneer Alternative Investments' Momentum AllWeather Institutional Fund. AIS took the prize with returns of 9.52% net and Sortino of 7.06 and a standard deviation of 2.95% that also impressed the judges.THE SPECIALISTSThe next award moved to specialist funds of funds, with one or two underlying strategies. Allowing greater focus on fewer strategies saw the 'specialised' categories peopled largely by funds of distressed, emerging markets and trading funds, catering to investors who may want more targeted funds of funds with which to conduct their own strategy allocation.The best-performing fund of specialised funds over three years on a risk/return basis brought together Momentum DebtMaster Fund, SGL Quadrant, GAM again with GAM Trading and new entrants HSBC (Emerging AdvantEdge Fund) and Goldman Sachs Asset Management (Global Tactical Trading Plc. The debt fund, Momentum DebtMaster won out, however, with returns of 7.7% which, while not the category's highest, caught the judges' eyes when married with a maximum drawdown of -1.04%, standard deviation of 1.84% and a high Sortino (on a risk-free rate of 3%) of 5.48.Viewing specialised returns over one year to August 2004 produced quite a different list to the three-year window, with Permal's Japan Holdings and Solar B joined by Thames River's Distressed Focus Fund and GreenWay Distressed & High Yield Fund (of Crédit Agricole) and Thames River Distressed Focus Fund. However it was Gems Advisers' Recovery Portfolio which won out with annualised returns of 13.03% and a standard deviation of 2.97% RETAIL PROVIDERSThe award for the best high-net-worth and retail fund provider drew together some of the European fund of hedge fund industry's best-known names.London's HSBC and Jupiter Asset Management and RAB Capital were joined by International Asset Management and Rothschild as the leading providers to individuals - although not retail in the 'mass retail' sense - as opposed to having a business set up mainly for the institutional buyer. It was HSBC that took the prize.INSTITUTIONAL TOP DOGSAs ever more institutional investors - largely pension funds - move into hedge fund investment, the category of 'Best European institutional hedge fund of funds product provider' produced a shortlist of enviable skill.Two providers who have recently won mandates from the county of Dorset's public pension fund - Gottex Fund Management and Pioneer Alternative Investments (via its fund of fund division Momentum) were joined by institutional stalwart and part of the Man Group, RMF Investments and Crédit Agricole (via its GreenWay funds). Dawnay Day Olympia also made the short list, however it was Gottex with a growing institutional investor base that came first, and Peter Bennett, CIO, who collected the award.PRE-EMINENT NEWCOMERSThe category of Best newcomer for a fund of funds that was started in the 12 months to 1 November 2004 combined an eclectic range of funds, showing the diverse fields of expertise in the industry, and truly lateral thinking displayed by some of the latest entrants.There was the Signet Quattro Gold Share Class, with fund returns hedged to the gold price, for example. And the Aurum India Fund, investing long and short in an emerging market the OECD recently predicted would be the world leader in the next 50 years, or other contenders such as La Fayette Opportunity Fund. Ultimately, however, Aurum's India Fund won out.MOST INNOVATIVE FUNDAurum India also made the shortlist for the most innovative fund of funds, along with Alpha Optimum (I Class) which uses an overlay to eliminate market risk and beta. Again, the third shortlisted fund was Signet Quattro Gold Share Class. The former two funds were pipped at the post by Signet's offering which hedges its returns back to gold, which some view as a universal currency 'replacement'.BEST GROUPThe final category was a who's who of Europe's fund of fund providers, RAB Capital competed with RMF, Liberty Ermitage with La Fayette, Gottex with GAM and Goldman Sachs, Arden with Aurum and HSBC with Tremont, to name but a few on the long list.The five who made the shortlist all had strong reasons for proceeding to the shortlist, on top of their strong investment process, the main criterion on which the award was decided. International Asset Management held a strong niche position and continues to win institutional business.Tremont Capital Management, which advises on Matrix's fund of funds, was complimented on its strong investment process while Gottex Fund Management was also seen as a strong contender with a broad range of funds and new business.However, it was GAM, part of the UBS group, whose strong process, wide range and general excellence that won the Best Group on the basis of investment process.The judges would like to congratulate all those who made the shortlists for the various categories. The strength of the entrants, award contenders and eventual winners reflects the strength of Europe's fund of hedge fund industry, a robustness and excellence expected to continue into 2005....
Start a FREE trial or subscribe to continue reading:
Start a 4 week free trial
Try Risk.net's premium content for a limited period. Register now for your FREE trial to one of our leading brands.
*not available to previous trialists or subscribers.
Log In or Subscribe Now
Subscribe to Risk.net Business now to access all our premium news & features content for 1 year.
Pay by Credit Card for immediate access.