View more on these topics

Man grows hedge fund stable

Man Investments has established Man Glenwood equity opportunities, a multi-manager fund of hedge funds that offers exposure to hedge fund managers specialising in long and short equity strategies.

The fund aims to provide returns of between 7 per cent and 10 per cent a year with lower volatility than conventional long-only equity funds. The management of the fund has been outsourced to Glenwood, a Chicago-based provider of hedge fund of funds which was founded in 1987.

Glenwood’s investment team will select hedge fund managers that invest across a diverse range of equity markets, industry sectors, geographical regions and currencies. These will include both new and experienced hedge fund managers who can shift portfolios quickly in times of market change.

Fund of hedge funds may be used by sophisticated, high-net-worth clients to provide returns that are not correlated to other markets and to protect their capital in poor markets. However, 2004 was not a vintage year on the whole for hedge funds due to a combination of stagnant markets, interest rate rises in the UK and US, and the problem of too many hedge funds trying to exploit the same market inefficiencies.

The CSFB Tremont Hedge Fund Index was up by just 1.61 per cent in Dec 2004, although long and short equities performed better than the composite index and many other hedge fund strategies, having chalked up a 2.57 per cent increase. As one of the more popular strategies, this may explain why the Man Greenwood product is focused purely on this strategy.

However, although this fund has a multi-manager strategy, it does not have a multi-styles strategy. The risk for investors is that if the performance of long and short strategy starts to fall away, for example if economic conditions change – this fund may find it difficult to perform as successfully as the managers anticipate as it is restricted to one strategy.

Recommended

Correspondent’s Week

I must confess to something of a mis-spent youth. At university, while others toiled their way through the holidays working at the local pub or, better, as highly paid interns at investment banks, I sat at home and whiled away the time watching TV. Months and months passed with the biggest question being: MTV or […]

Duffy on Mortgages

Why am I telling you this? Well, I am afraid that this is the most relevant analogy I can make for the 2005 mortgage market. We have all had a long stint at the bar. Since 2000, gross mortgage advances have risen from 120bn a year to 300bn last year. Developments in facets such as […]

Day is dawning for commodities

Structured product provider Dawnay Day Quantum has created another issue of protected commodities accelerator, capital-protected bond linked to a basket of eight industrial metals and energy-related commodities for a four-year term.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment