Fund Spotlight: March 2016

New Funds Spotlight

It feels like a daily basis that stories of amazing FX strategies are bandied around the hedge fund world as increasing numbers of brilliant prop accounts and back-tested algorithms offer the prospect of lofty returns for investors. As the investment industry has learned over the years, these punchy return figures in FX do not always have the ability to stand the test of time and what is needed is a process driven, yet dynamic approach to trading currencies.

Our Apex Cap Intro team are poised to look at the funds from an investor’s perspective, and as such it can sometimes prove challenging to find a manager investors are happy to put their trust and collective weight behind. Having said this, we have recently found a very exciting FX fund that has instilled confidence with a strategy that blends discretionary and systematic trading on spot FX and Gold markets. From an extremely strong and consistent prop track record, the fund structure was launched this month amongst considerable interest from early stage investors. A blend of systematic and discretionary trading means that the fund can deliver edge whilst risk is tightly controlled on the systematic front. The management team also utilise behavioural methods to monitor and control risk among their discretionary trading strategies.

Illiquid Opportunities

A market that has seen consistent performance with growth, little or no downside shocks and insulation against financial market swings can sound too good to be true… it can however be found by drilling down into the London property market.

The very specific geographic area immediately around Hyde Park in London is most often associated with trophy residences and oligarchs’ mansions. In reality, as few people realize, over half of all properties in the area still sell below £1m and this represents the core of the buoyant Private Rented Sector (PRS). With a commercial basis to valuation, price growth in this segment is less volatile and is underpinned by a scarcity of stock.

Due to the absence of new builds in the centre of London and the reluctance to divest of high performing stock makes the lack of supply is so acute that there are less than 90 sales per week. Consistent demand from both on and offshore investors means that prices below £1m have grown on average by 9% per annum for the past five decades – a trend that looks set to continue.

The recent changes to taxation of residential property increasingly suggest that the only tax efficient way to gain exposure to this asset class is via a fund. Apex’s Cap Intro team works with the only fund manager specifically targeting mainstream PRS in central London; they have a proven track record of maximising returns throughout all stages of the investment cycle.

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