Markaz: Strategy Selection the Key for Success in Hedge Funds

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Markaz: Strategy Selection the Key for Success in Hedge Funds 20 - Nov - 2006

Markaz announced announced that while selecting hedge funds, one of the most important factors for success that investors should be aware of is the efficacy of the strategy. Elaborating on the strategy selection, Miss. Mariam Al Nusif representing the Hedge Fund team at Markaz, said that the bulk of the assets are invested in funds that employ "long / short" equity strategies. Others use alternative strategies such as selling short, arbitrage, trading options or derivatives, using leverage, investing in seemingly undervalued securities, trading commodity and FX contracts. They also attempt to take advantage of the spread between current market price and the ultimate purchase price in situations such as mergers. In consideration of the market conditions and the macro environment, assets are allocated to the different strategies maintaining a balanced portfolio that is not easily affected by existing market instability. A combination of directional (e.g. long/short, global macro) and non-directional (eg. market neutral, event driven) strategies achieves consistent returns without missing out completely on market movements. According to the prevailing conditions, tactical moves, which are temporarily shifts from the strategic benchmark allocation, are made to capture opportunities as they emerge. Clearly, Hedge funds have some contrasting features when compared with mutual funds, which are highly regulated and do not have the same breadth of investment instruments at their disposal. Besides, most hedge fund managers commit a portion of their wealth to the funds, hence underlying alignment of interests. “Investing in Hedge funds envolves a high level of sophistication especially with regard to the tolerance of the peculiar risks that are associated with hedge funds. Especially after reports similar to Amaranth, the high profile hedge fund ($9 billion AUM) to collapse since the Long-Term Capital Management (LTCM) fiasco in 1998. For that reason, a stringent due diligence is required for investments and is crucial in helping to identify the best opportunities and minimizing the numerous risks” – Miss. Mariam Al Nusif, said. Accordingly, Markaz has launched Atlas Fund of Hedge funds (FoHF) which employs an extensive and effective research methodology, that identifies, evaluates, selects and monitors high quality hedge fund managers. Such managers are defined as having a clearly structured approach to both investment and business management, and must be capable of achieving favorable risk-adjusted returns. Union Bancaire Privee (UBP) is Atlas’s Fund Advisor. They employ teams of dedicated specialists based in Geneva, New York, London and Bermuda. Having a large platform of hedge fund managers, Atlas FoHF has a unique gateway to top-notch managerial talent that private investors are often denied. The Fund also bypasses the substantial minimum investments required by individual funds. “Atlas was launched in August 2005 and has achieved returns of 11.52% inception-to-date, and 3.11% month-to-date, outperforming it benchmark index, the HFR US Global Index, at 8.93% and 2.02% respectively. With a reasonably low volatility of 5.68%, and an adequate Sharpe ratio of 0.72%, Atlas FoHF has proven to be a smart investment in these turbulent and hard to predict market situations, providing its investors with consistent returns”. - Miss. Mariam Al Nusif, Markaz said. Kuwait Financial Centre 'Markaz', with total assets under management of over KD1.25 billion as of September 30, 2006, was established in 1974 has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997; and was recently awarded a BBB+ corporate rating by Capital Intelligence Ltd. -Ends- Photo Caption: Mr. Gopal Menon, SVP– International Investments/ Investment Advisory ServicesMarkaz announced announced that while selecting hedge funds, one of the most important factors for success that investors should be aware of is the efficacy of the strategy. Elaborating on the strategy selection, Miss. Mariam Al Nusif representing the Hedge Fund team at Markaz, said that the bulk of the assets are invested in funds that employ "long / short" equity strategies. Others use alternative strategies such as selling short, arbitrage, trading options or derivatives, using leverage, investing in seemingly undervalued securities, trading commodity and FX contracts. They also attempt to take advantage of the spread between current market price and the ultimate purchase price in situations such as mergers. In consideration of the market conditions and the macro environment, assets are allocated to the different strategies maintaining a balanced portfolio that is not easily affected by existing market instability. A combination of directional (e.g. long/short, global macro) and non-directional (eg. market neutral, event driven) strategies achieves consistent returns without missing out completely on market movements. According to the prevailing conditions, tactical moves, which are temporarily shifts from the strategic benchmark allocation, are made to capture opportunities as they emerge. Clearly, Hedge funds have some contrasting features when compared with mutual funds, which are highly regulated and do not have the same breadth of investment instruments at their disposal. Besides, most hedge fund managers commit a portion of their wealth to the funds, hence underlying alignment of interests. “Investing in Hedge funds envolves a high level of sophistication especially with regard to the tolerance of the peculiar risks that are associated with hedge funds. Especially after reports similar to Amaranth, the high profile hedge fund ($9 billion AUM) to collapse since the Long-Term Capital Management (LTCM) fiasco in 1998. For that reason, a stringent due diligence is required for investments and is crucial in helping to identify the best opportunities and minimizing the numerous risks” – Miss. Mariam Al Nusif, said. Accordingly, Markaz has launched Atlas Fund of Hedge funds (FoHF) which employs an extensive and effective research methodology, that identifies, evaluates, selects and monitors high quality hedge fund managers. Such managers are defined as having a clearly structured approach to both investment and business management, and must be capable of achieving favorable risk-adjusted returns. Union Bancaire Privee (UBP) is Atlas’s Fund Advisor. They employ teams of dedicated specialists based in Geneva, New York, London and Bermuda. Having a large platform of hedge fund managers, Atlas FoHF has a unique gateway to top-notch managerial talent that private investors are often denied. The Fund also bypasses the substantial minimum investments required by individual funds. “Atlas was launched in August 2005 and has achieved returns of 11.52% inception-to-date, and 3.11% month-to-date, outperforming it benchmark index, the HFR US Global Index, at 8.93% and 2.02% respectively. With a reasonably low volatility of 5.68%, and an adequate Sharpe ratio of 0.72%, Atlas FoHF has proven to be a smart investment in these turbulent and hard to predict market situations, providing its investors with consistent returns”. - Miss. Mariam Al Nusif, Markaz said. Kuwait Financial Centre 'Markaz', with total assets under management of over KD1.25 billion as of September 30, 2006, was established in 1974 has become one of the leading asset management and investment banking institutions in the Arabian Gulf Region. Markaz was listed on the Kuwait Stock Exchange (KSE) in 1997; and was recently awarded a BBB+ corporate rating by Capital Intelligence Ltd. -Ends- Photo Caption: Mr. Gopal Menon, SVP– International Investments/ Investment Advisory Services