Possibly the best hedge fund industry in the world...
Hedge funds based in New Zealand shrugged off the turmoil that brought the sector to its knees in 2008 and delivered stellar returns to investors at a time when peers in other countries struggled with their worst year on record - and the positive performance continues.
New Zealand hedge funds made 20.4% last year, according to an index of eight funds compiled by the New Zealand Absolute Return Association.
This compares to the worst recorded fall, of 23.3%, from peers based elsewhere, according to the investable benchmark produced by analysts Hedge Fund Research, and means that the country could be the only one whose hedge fund managers, on average, made such good money in 2008.
One European investor in hedge funds said: "American and European funds, which are the largest parts of the industry, are likely to have fallen in aggregate, and it's difficult to see local emerging markets funds having made money last year. That doesn't leave terribly much that did well."
New Zealand-based funds have added another 1.3% in the first four months of this year, said Anthony Limbrick, chief investment officer at $43m (€30.5m) manager Pure Capital, one of the domestic index's constituents. The HFR global investable index is up 5.2%.
The country's hedge fund industry manages about $1bn and includes the index constituents and another seven portfolios not in it. Limbrick said these seven ran at most 5% of New Zealand's hedge fund assets, so their returns would not skew the country's combined performance markedly. No New Zealand fund is believed to be in the global index.
Investors will know New Zealand best for 36 South Investment Management, the manager whose Black Swan fund made 204% in the 12 months to mid-January, punting on rare market events. It recently opened an office in London. Pure Capital is also planning a London presence.
The investment strategies of New Zealand's funds include equities, commodities and computer-driven, said Limbrick.
Pure Capital made 79% last year and is up 21% this year, Limbrick said, trading derivatives linked to global equities, and to commodities such as gold and oil. The Wellington firm is launching a product next month to give pooled access to its investment program.
--write to dwalker@efinancialnews.com
del.icio.us
Digg
Newsvine
reddit
StumbleUpon