Fund Spotlight: September 2016

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Welcome to the September edition of Fund Spotlight; delivering the latest alternatives market information from Apex, including fund launch stats, top fund performers and live illiquid opportunities.

 

Table of top performing funds

 

New Funds Spotlight

 

The systematic hedge fund space has advanced in leaps and bounds over the past few years. The introduction of self learning algorithms is perhaps the most revolutionary change to hit these strategies since their inception. We have been following these developments closely and have recently started to work with a fund in this space with impressive risk adjusted returns, achieved through technical indicators signaling the best time to invest in developed market stocks with historically proven long term performance. The strategy seeks to identify and profit from market inefficiency, mispricing and global equity trends but the USP lies in how the algorithm tracks trades by type and profitability, monitoring changes in the market and allowing for the strategy to be adapted in changing market conditions.

 

Illiquid Opportunities

 

The European Structured Credit space continues to offer significant value but presents substantial barriers to entry. Understanding the complexities of this asset class can be challenging, more so to effectively structure these investments and properly manage the diverse risks associated with them. Another central aspect of this asset class is the importance of the manager’s network; as many of these assets originate ‘off market’ the prudent investor needs to back a manager with the ability to be first in line for the very best opportunities. Apex Capital Introduction Services works with one of the strongest and most well-positioned managers in this space, featuring a team whose key personnel worked previously in senior positions at global investment banks for an average of 19+ years and collectively boast an impressive track record over several different funds. The team are currently raising an open-ended fund off the back of a stellar closed-ended fund track record.

 

Investor Appetite and Industry Trends

 

This month’s ‘Trends and Strategies’ section is dedicated to reporting the sights and sounds of the HFM Allocator Network Summit in Zurich, which Apex Capital Introduction Services sponsored earlier this month. The Cap Intro team were struck by the enthusiasm for interesting hedge fund strategies displayed by the investor community. Although it is true that some hedge fund appetite is waning, we are still seeing strong interest in managers with genuinely fresh approaches and a real ‘edge’. For many of the investors we spoke with, the debate centres around the justification for active management fees. In almost every case investors were willing to pay higher fees if they felt they were buying into an approach that could justify them. In our experience correlation is a key determining factor. Funds that charge hedge fund fees for returns and are too correlated to wider markets are now seeing the biggest fall in demand amongst investors. It was therefore refreshing to offer the investor community some hedge fund strategies which provoked interest. Private equity and private debt markets are the most buoyant they have been in some time as many investors seek strategies in these areas. As a result, the number of interesting managers in this space, particularly those offering niche opportunities and geographies, are increasing and gaining more traction amongst investors. Contrary to some of the more negative headlines we have seen in the press recently, from our perspective, the funds industry is continuing to thrive. We are seeing the most successful funds spawning from the managers who offer investors the dual benefits of actively seeking out the best opportunities in the market, whilst also offering good value in their products.

 

Fund launches by strategy and geo focus

 

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