"By not planning you are planning for disaster" - Anonymous
Performance
Hedge Funds Continue to Climb in April
Hedge funds as measured by the Greenwich Global Hedge Fund Index ("GGHFI") fell by a fraction of the losses experienced by global markets in May. The GGHFI shed 2.25% compared to global equity returns in the S&P 500 Total Return -7.99%, MSCI World Equity -9.91%, and FTSE 100 -6.57% equity indices. Twenty-eight percent of constituent funds in the GGHFI ended the month with gains.
|
Greenwich Alternative Investments Hedge Fund Index |
|||||||||
Total Return |
3 Yr Annual |
5 Yr Annual |
|||||||
Index |
May 10 |
YTD |
CAR |
STD |
CAR |
STD |
|||
Global Hedge Fund |
-2.3% |
1.1% |
1.4% |
1.5% |
11.1% |
1.9% |
8.2% |
6.6% |
7.0% |
Global Long/Short |
-4.2% |
1.3% |
0.2% |
0.5% |
12.0% |
-0.1% |
10.7% |
6.1% |
9.1% |
Global Market Neutral |
-1.0% |
1.1% |
3.1% |
1.7% |
13.8% |
2.8% |
6.3% |
6.2% |
5.1% |
Multi Strategy Index |
-2.3% |
0.9% |
0.5% |
0.4% |
9.0% |
2.1% |
7.1% |
7.7% |
6.3% |
Benchmark |
YTD |
CAR |
STD |
CAR |
STD |
||||
Barclays Agg Bond Index |
0.8% |
1.0% |
3.7% |
1.8% |
8.4% |
6.9% |
4.1% |
5.3% |
3.7% |
S&P 500 Index |
-8.0% |
1.6% |
-1.5% |
-0.9% |
21.0% |
-8.7% |
20.6% |
0.3% |
16.7% |
MSCI World Index |
-9.9% |
-0.2% |
-7.6% |
-4.7% |
11.3% |
-12.6% |
22.4% |
-1.1% |
18.2% |
| CAR= Cumulative Average Return, STD = Standard Deviation | Source: Greenwichai.com |
News
Family money made easier: MacDonald Asset Consulting launches Family Office directory
In response to a significant number of requests approaches from offshore investor groups seeking guidance or strategic alliances relating to opportunities in the residential property sector and other commodity based investment ideas, Van Mac Group partner company MacDonald Asset Consulting has launched a new service, Family Office Connect.
Family Office Connect, (FOC) is a new contact database of the major family offices in Australia, with a focus on liquid assets for investment exceeding AUD $100 million.
Australian family offices are generally private companies that manage investments and trusts for a wealthy family and their extended members. Most family offices are relatively new in Australia, and have often only been created by the first generation in the last 10 to 20 years. There are some older families such as the Fairfax, Albert and Myer families where 5th, 6th and 7th generations are beneficiaries of the family office structure.
An Australian family office is generally a private company that manages investments and trusts for a wealthy family and their extended members. Most family offices are relatively new in Australia, and have often only been created by the first generation in the last 10 to 20 years. There are some older families such as the Fairfax, Albert and Myer families where 5th, 6th and 7th generations are beneficiaries of the family office structure.
The top 250 Family Offices in Australia account for approximately AUD $181 billion as at May 2010, with the largest 20 accounting for AUD $67.7 billion. (1) The range is from AUD $7.17 billion to AUD $200 million.
There are a significant number of smaller Families in the $30 million to $200 million range that do not have the economies of scale to establish stand alone Family Offices, rather they either use multi- family offices such as the Myer Family, with about 50 families apart from the Myer Family, or other service providers to provide the outsourced services. This sector is a significant user of private banking, accounting, taxation and investment management services.
"The traditional family office provides a range of services from personal services (managing household staff) to property management, philanthropy coordination, legal and tax services, and financial and investment service," says MacDonald Asset Consulting Managing Director Scott MacDonald. "A family office will typically have an investment team that manages the assets for a number of beneficiaries. This service may be provided within the office or through private banking or advisory services of a financial institution.
"The multi-family office model is still early in Australia however there seems to be a great deal of opportunity as a number of the "new" wealth groups look to the experience of other families. On this theme, a number of families are co-investing and sharing due diligence on transactions," he continues. "While family offices have been popular in the USA and Europe for some time, this niche are has only recently taken off in Australia, as Australian investors become more sophisticated in their demands and the financial advice market has become more competitive."
Family Office Connect is a new product being offered by MacAsset Consulting to groups looking to do business with these Family Offices. "The focus of Family Office Connect (FOC) is on the non core assets and provides a new contact database of the major family offices in Australia, with a focus on liquid assets for investment exceeding AUD $100 million," says Mr MacDonald. "It provides information about their investment teams and trustee or investment committee members, as well as people managing core assets, other investment portfolios and Foundations and Endowments.
"FOC will assist people in understanding the investment objectives of the Family Office, the types of deals they like and who the key decision makers are.
"It is a great opportunity to get to know these important investment houses, and to become part of a growing trend in family wealth management.," says Mr MacDonald. For more information contact Scott MacDonald.
Asia overtaking world’s wealthiest
Asian millionaires, led by those in Hong Kong and India, have overtaken their European counterparts, according to a new report, with the total wealth of Asia's 3 million millionaires surged to $US9.7 trillion ($11.1 trillion) last year, beating the $US9.5 trillion held by Europe's richest...more>>
Recession, what recession? Super rich keep spending
UK Chancellor of the Exchequer George Osborne might insist that "we are all in this together", but it looks like the super-rich did not get the memo. While the rest of the nation embraces a new age of austerity, the wealthy are snapping up status symbols such as yachts, multi-million pound artworks, private jets and jewels with renewed vigour...more>>
Trends
Alternative asset investment set to grow by a third
Institutional investment in alternative assets is set to grow by more than a third, according to a recent survey by Ru ssell Investment, with responses to the group's 2010 Global Survey on Alternative Investing showing that institutional investors worldwide planned to increase their stakes in assets such as real estate and hedge funds by 5 percentage points by 2012...more>>
Funds woo wary investors with absolute returns
With volatility scaring many investors away from stocks, the mutual fund industry is finding that one of its hottest products is a type of hedge fund for the masses promising steady if unspectacular returns. Their growing popularity suggests a psychological shift among investors: burned by recent market fluctuations they are now willing to pay more for predictability...more>>
Research
New whitepaper examines the liquidity benefits of hedge fund replication strategies in alternative portfolios
Credit Suisse has released a new whitepaper, "Portfolio Idea: Enhancing Liquidity in Alternative Portfolios", that examines liquid alternative beta strategies and their impact on portfolio liquidity. The paper explores a challenge that many investors face in their alternative portfolios: how to increase portfolio liquidity without sacrificing potential returns, especially in a post-crisis, low-yield environment. The research, including the case studies outlined in the paper, suggests that alternative beta strategies may be a viable solution for obtaining hedge fund-like returns while also providing access to capital when needed. The whitepaper also looks at how hedge fund returns can be replicated through liquid instruments; the factors to be considered when evaluating various replication models; how implementing an alternative beta strategy can improve the liquidity profile of a multi-strategy hedge fund portfolio; and the trade-offs that need to be considered when implementing an alternative beta approach. Click here to view the whitepaper.