Global hedge fund-of-funds manager Ivy Asset Management, which opened a Hong Kong office this year, is looking to offer a range of its funds in Australia.
Ivy, which comes under the umbrella of multi-affiliate manager BNY Mellon Asset Management, has about $US15 billion under management across its range, which covers up to 150 underlying hedge fund managers. The average fund has between 25 and 35 managers. Alex Balfour, a managing director who opened the Hong Kong office, said the Australian market was very appealing for the firm. “It really is the best pension set up in the world. It’s a very forward-thinking market,” he said last week. He said that while there was a trend for institutional investors to “go direct” to hedge fund managers, particularly multi-strategy managers, hedge FoFs were “here to stay” because the bar had been raised due to the high-profile blow-ups which had occurred in the last couple of years. “The number one aim is to avoid a blow-up,” Balfour said. “The fund of funds industry is not a cartel. It’s an industry based on a cost-plus recovery with a decent margin. You have to ask yourself ‘what you are paying for?’ and ‘whether you’re getting it’ … By and large managers can justify their fees.” James Gruver, who heads up the BNY Mellon Sydney office, said the firm was considering whether to provide an Australian-based vehicle for Ivy investments. At the moment the manager can be bought through its US or Cayman funds. Ivy, one of the oldest hedge FoF managers in the world – dating back to 1984 – first ventured outside the US in 2002, opening a London office, followed by Tokyo in 2005 and then Hong Kong. It has three offices in the US. Total staff is more than 170, including 44 investment professionals. Balfour said the firm had invested in Elliott, which he describes as one of the best managers in the world, for more than 20 years. But using a hedge FoF was more than just about gaining access to quality managers. A good hedge FoF needed to be equipped to identify opportunities and recognise untapped markets globally.
Future Fund chief investment officer Ben Samild said that FY24 has been a great year for alpha creation, thanks to strong returns in equities and, unusually, across multiple hedge fund strategies all at the same time. He reflected the past few years have been “a difficult time to be an asset owner and to generate positive returns for risk assets” but the Future Fund is tracking well of its long-term mandate.
Simon Hoyle and Darcy SongSeptember 4, 2024
