Welcome to the July edition of Fund Spotlight; delivering the latest alternatives market information from Apex, including fund launch stats, top fund performers and live illiquid opportunities.
New Funds Spotlight:
There are currently numerous opinions circulating around the best strategy for long term investments. Geographies such as Africa and Russia have been widely talked about in recent months yet few opportunities are more compelling at this time than the opportunity presented in the Indian markets. With a burgeoning middle class and progressive government reforms propelling local wages upward , disposable income is poised to drive forward momentum in the local economy supported by a central bank that is fiscally responsible and has enjoyed investor support for some time. Analysts have cited droughts as a reason for the volatility in Indian markets over the last two years, however Indians fortune is set to change, quite literally, with 2016 set to see much more rain than a usual monsoon, the economy is expected to react favourably. Active management is, of course, the best way to exploit this opportunity whilst helping mitigate the downside risks associated. At Apex we have established several different routes into the Indian market, both systematic and discretionary. Contact Us to find out more.
Non-bank financing has been a consistent motif for our investors for some time. Markets are abound with opportunities where the banks have pulled away due to their risk averse attitudes and trade finance strategies are now offering some of the best risk adjusted returns in this space; even more so in geographies that have been over-looked by more traditional strategies. Some of the most interesting strategies in the trade finance space operate in Eastern and specifically, Asian markets. One such strategy, which we have started working with in recent weeks, operates in South East Asia trading premium commodities; mainly oil, gas and crude palm oil. This manager structures a range of trades differing in size across these strategic areas. Uniquely, this approach does not act as a third party but trades directly with the buyers and sellers, setting up secured back to back letters of credit contracts. A more direct approach allows for increased returns whilst also mitigating the risk of operating with third party traders.
Investor Appetite & Industry Trends:
As the world looked on in interest, so too did we in the aftermath of Brexit. The governing Conservative Party in the United Kingdom elected a new leader and Prime Minister, and with the opposition Labour Party in turmoil, Britain looks like a very politically, and arguably, economically unstable place. However, for more patient capital Brexit can be seen as a buying opportunity. With British mid cap funds posting positive mid month returns and the FTSE indices recovering, even shorter term investment horizons no longer seem as bad as they were tipped. One thing is for sure, no matter how Brexit negotiations go, Britain will be a far different place in the next few years.
The more enthusiastic of our investors see Brexit as an opportunity to invest in the UK at a discounted rate, even if their base currency is Sterling. International investors that are optimistic about Britain’s prospects have also used the depreciating currency to create an even more lucrative opportunity. The only area we have seen a contraction in interest is UK property and this has tended to be restricted to equity investments in bricks and mortar. Property debt and highly liquid approaches involving REITs have still sparked intrigue. More traditional voices have warned against British investment until the future of the UK economy, its political direction and international status are clearer. This is wise thinking but it is a reactive approach, furthermore, political and economic stability is not afforded to many developed market countries at the moment, even those which are far removed from Brexit. In the U.S., a face changing presidential election draws closer whilst in wider Europe an Italian banking crisis and questions about the future of the entire union loom. Investment in the coming months and years will not only be defined by the perception of risk, but more starkly, the identification of opportunity… and opportunity rarely knocks for the risk averse.
The Apex Alpha Portal brings together data on over 500 funds globally, the current composition of our portal can be seen below:
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