The Future Fund has underscored the re-emergence of hedge funds, after two difficult years, with the new appointment of several international managers employing sophisticated investment strategies.
The fund, a bellwether for many large super funds in the region, has allocated an estimated $4.2 billion to three hedge fund managers, plus an unspecified amount to three other managers.
The three new hedge fund managers are Ochs Ziff, a US-based multi-strategy manager, BlackRock Alternative Advisors, which has various hedge fund strategies managed from several countries, including the former Quellos Capital Management, and Brevan Howard, a UK-based alternatives manager.
The other new managers, according to yesterday’s postings on the Future Fund website, are: Macquarie Investment Management for Australian equities; and M&G Investment Management and Vianova Asset Management (a boutique backed by Australian Unity), both for debt securities.
According to the site, the new hedge fund managers have taken the Future Fund’s allocation to alternatives from $2.776 billion to $7.018 billion, during the December quarter.
This is a shot in the arm for hedge fund managers, which have been suffering until recently from a shortage of new mandates in the wake of the global financial crisis. Hedge funds which provided quarterly liquidity were hit particularly hard by redemptions from late in 2007 until the middle of last year.
The Future Fund now has mandates with 10 alternatives managers and 58 managers overall. It had $61.785 billion invested (ex Telstra shares) as at December 31. It still held 15.5 per cent ($9.6 billion) in cash at that date.
