The lower levels of leverage both of the hedge funds themselves and their investors, coupled with the willingness of Asia hedge funds to meet redemption requests, recognising that suffering a reduction in assets under management would go towards preserving the future relationship with cash-hungry investors, has meant that the level of hedge fund restructurings in Asia may have been less than in other parts of the world.
The term UCITS refers to the title “Undertakings for Collective Investment in Transferable Securities”. UCITS are retail funds authorised by one of the member states of the European Union (EU), and these funds have grown to become a hugely successful product, seen by investors and promoters as a “gold-standard” in terms of investor protection, regulation and disclosure. Latest figures from the Brussels-based European Fund and Asset Management Association (EFAMA) show that UCITS net assets under management as at end-March 2009 amounted to almost $6 trillion.
As we look back at the untamed securities markets that defined 2008, we naturally have to ask ourselves which asset classes performed the least poorly. To do this, we use the software platform on AlternativeSoft, which enables us to run statistics on individual funds, as well as on a group of hedge funds. Using ‘Asset Search’ function, we divided the assets under management (AuM) of the hedge fund universe into four buckets of different sizes as shown in Table 1 below.
Anyone who compares a hedge fund’s offering documents with those of a mutual fund cannot but be struck by the enormous difference in rewards for the managers of hedge funds vis-à-vis that of mutual fund managers. Because mutual funds (and closed-end funds) may offer their securities to the “great investing public,” their managers are greatly restricted in their rewards – the fees for investment advisors are limited to a percentage of assets under management (AUM).
Two recent transactions - Pioneer's purchase of Momentum and Man's acquisition of RMF - have highlighted the issue of valuations of fund of funds companies.