Despite the lovely sunshine in Monaco and the fantastic venue, the mood at GAIM International is not so shiny!
One can feel the level of uncertainties on the future of hedge funds, at a time where the performances are not yet fully recovered from 2008. After this weekend’s Greek election, there is a feeling of temporary relief on the euro zone as well as a general questioning on how long that’s going to last. Several institutional investors based in the US and the UK expressed their concerns in investing in the euro. The US is perceived as “the least ugly in an ugly world” with its capacity to rebound first.
We can clearly feel the shift of perception towards investing in hedge funds between American investors that claim to increase their exposure to hedge funds and their European equivalents, who are concerned by the average performances and additional regulatory constraints that force them to stay in Bonds. Rarely have I seen so many investors expressing their views and sharing their investment concerns.
In this context, what is the main message that people are taking from GAIM International?
- Expectations of 8% annual returns is not realistic anymore
- CTAs are back to the stage where they are playing their role as an insurance premium against uncertainty
- Distressed debts seem too early to invest in
- Opportunities are in sector L/S managers
- Good Long only stock pickers can make the difference
- Governance issues and transparency should remain top issues when investing
Lyxor openly claimed in a controversial speech that if we wish assets to grow, managers should reconsider their value proposal towards:
- Transparency: a top priority with a gap of information to a much shorter period
- Social responsibility: becoming a more important theme for investors
- Economics: managers should reconsider their fees structure to increase alignment with investors’ best interests
- Customization: to offer flexible investment solutions
GAIM International is a unique occasion which brings together investors and managers to reposition the hedge fund model and to openly address key issues to build a robust industry. Let’s see how the debate evolves in the coming two days!
Sophie van Straelen started her professional career in investment banking spanning derivative markets and hedge funds. Her 12 year experience in investment banking provided a strong base to found Asterias Ltd, a consultancy located in London, specialised in delivering strategic insight in distribution for hedge fund managers. Listed in 2009 by EFinancial News as one of the top 100 most influential women in finance in Europe, she is a recognised, valuable and independent source of analysis for the media, lobbying groups and investors.