Fund Spotlight: October 2016

New Funds Spotlight

There always seem to be a lot of stories about amazing FX strategies banded around the hedge fund industry, with the abundance of amazing prop accounts and back-tested algorithms offering the prospect of lofty returns to their investors. As the investment industry has learnt, to its peril over the years, these punchy return figures in FX often do not stand the test of time and a process driven, yet dynamic approach to trading currencies is required.

As a Cap Intro team we are charged to look at the funds we work with from an investor’s perspective and it can be quite difficult to find managers in this space that allocators want to put their weight behind; having said that, there is an FX fund that gives us confidence. This fund’s strategy 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 earlier this year amongst considerable interest from early stage investors. The blend of systematic and discretionary trading means that they are able to tightly control risk on the systematic front, whilst the management team also utilise behavioural methods to monitor and control risk among their discretionary trading strategies. Click Here for more.

Illiquid Opportunities

The recent announcement by the UK Government that they will allocate £3bn of funding to support housing construction aptly demonstrates current concerns that the resources are not available in the UK to supply sufficient new housing. Whilst the fundamental demand for new houses remains, the ability to invest funds into new developments can be difficult for any investor unless it is in publicly traded UK house-builders. Given the value of the stock market, we wanted to look for an alternative approach for investors. Fortunately we have identified a highly experienced management team with over 20 years experience of lending and investing money into Residential Development (>300 developments financed) across the UK and therefore have hands on management experience in this space. The combination of a demand for funding from this sector, alongside the team’s strong and consistent track record, provides a great opportunity to gain access to this space. The interest already received is very encouraging; please click below for more information. Click Here for more.

Investor Appetite & Industry Trends

Returns matter…however, good returns are not the express route to asset growth and doesn’t always equal success in the hedge fund industry. Of course, a strategy which promises ‘absolute returns’ should offer ‘absolute returns’ and not hide behind poor market performance when things go wrong. Yet investors across the board affirm that stellar returns are not the only driving force behind an investment; naturally risk adjustment is crucial but managers can sometimes neglect the communication of their strategy as a key reason behind investment. Investors want clarity that fund performance is driven by legitimate opportunities and that these opportunities will be capitalised upon in a repeatable process. At Apex Capital Introduction Services we often work with managers to help improve the effective communication of this message. Our first step when working with a new manager is to assess and improve fund documents. Often very simple amendments can make a huge difference and above all, our key tip is that over explanation is much better than under explanation; it’s much better to leave an investor meeting with a clear understanding of your strategy.

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