VanMacDonald Global Partners (VanMac), a hedge fund indexing and consulting firm, is seeking an underwriter willing to put up $500 million for a AAA-rated exchange-traded fund, replicating a sample of US-based Greenwich-VAN Asset Management’s global hedge fund ‘approved list’.
According to VanMac managing director, Scott MacDonald, the fund would ideally include about 25 of Greenwich-VAN’s most highly-regarded hedge funds in mandates of at least $20 million, the minimum generally required to secure a separately managed account. “That way we get the daily reporting and liquidity that investors are demanding,’ MacDonald said. The structure of the fund would be similar to those built on Greenwich-VAN’s suite of investable hedge fund indexes offered globally, which are wrapped in a AAA-rated note from Rabobank International, and are 100 per cent leveraged. MacDonald said he had spoken to institutional stakeholders “from Ministers of Finance on down” about underwriting the fund, which he said would offer “about the same standard deviation as the S&P 500” over the term of the note (probably five years) with returns expected to be greater than listed equities. Greenwich-VAH has a database of 7000 hedge funds globally, but has funded only 120 of them in its 14-year history. Managing director Dan Hayden, visiting Australia last week to both market and collect data on Australian hedge fund managers, said the process included checking claims by managers against data held by their local regulators.
There is one investment area where Insignia’s $180 billion super arm has not lost money for the past 17 years, which is what it calls the insurance-related investments. The alternatives strategy is gaining popularity among asset owners due to its diversification benefit, but Insignia’s super and asset management investment chief Dan Farmer warns it is a space where investors can suffer if they “stumble in without doing the homework”.
Darcy SongJanuary 23, 2025
