The implemented equities team of Queensland Investment Corporation (QIC) has drawn on only six underlying managers to build its own hedge fund-of-funds.
By using a small number of managers, four of which have already been implemented in other QIC products, the Absolute Return Fund differs from the more common compositions of hedge FoFs, which often assemble 20 or more managers. Greg Clarke, senior portfolio manager in the implemented equities team at the $80 billion manager, said it was not always necessary for hedge fund investors to allocate to a broad number of managers. “We’re not looking for 60 hedge funds. We believe that you can over-diversify,” Clarke said. Greg Liddell, head of the implemented equities division, said that from this perspective the product could be viewed as an alternative to a typical hedge FoF. The strategies run by the six underlying managers are equity long/short, quantitative market neutral, event-driven and relative value, risk and volatility arbitrage. While QIC holds a segregated mandate with one of the managers, it has, in aggregate, visibility across 75 per cent of the portfolios of all managers, according to Fiona Mann, product specialist with the implemented equites division. The fund, which goes live on October 1, will be seeded internally.
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
