The Sydney-based hedge fund manager, TechInvest, has begun winding down its three funds.
Despite its solid performance over the past five years, the four-person team, which managed $39.4 million, decided to close the funds after not meeting institutional demands for more resources in the wake of the financial crisis, according to chief executive officer Rick Steele (pictured).
“The GFC had the effect of raising the bar, and made it more difficult to be accepted,” Steele said.
“You need to be very substantial in terms of numbers of people. For investment committee demands, and to be capable of passing the gatekeepers and researchers, you need more people, more capital.”
All three funds held competed strongly against their benchmarks. Over five years, the flagship TI Intercept Capital Fund, a market neutral product, gained 8.05 per cent against the 5.82 per cent of the UBS Australia Bank Bill Index; the TI Explicit Alpha Fund delivered -10.87 per cent against the -10.64 per cent from a customised ‘global shares’ benchmark over three years; and the TI Technology Investment Fund returned -2.96 per cent against the -4.9 per cent of the NASDAQ Composite over three years.
Equity Trustees (EQT), the responsible entity of the three funds, stated in letters to unitholders last week that the liquid portfolios of the funds should be realised by March 31, and final distributions and the return of capital made at the end of April.
TechInvest has also resigned from its role as co-manager of the EQT High Income Fund, which was formerly managed by Lehman Brothers Asset Management. The portfolio is now overseen by high-yield credit manager Spectrum Asset Management.