Swiss hedge fund hurt by credit crunch
Gottex Fund Management, the Geneva-listed fund of hedge funds manager, said assets in its funds dropped by 1.9% to $15.7bn during the first quarter thanks to performance problems and adverse currency moves. Record Currency Management, a foreign-exchange specialist that floated in London last year, was also beset by the same misfortunes.
Both asset managers' share prices have declined about 53% so far this year - Gottex's to Sfr32 and Record's to 74.6p.
Gottex said it had taken in new money from clients during the three months - about $260m net. But a performance-related decline of $220m and adverse currency movements of $350m offset this.
Despite the problems the Swiss manager said it expected 2008 to be a growth year because there is a long-term trend towards investment in alternative assets among pension schemes and other institutional investors.
Joachim Gottschalk, chairman and chief executive, said: "Naturally, investors' decision-making cycles have lengthened due to the turmoil which has created uncertainty within the short term outlook for asset gathering."
Meanwhile Record Currency Management, which floated at 160p on December 3, said that during the first quarter it added 14 new clients and took in a net $3.3bn of new assets.
The new money was nearly completely offset, however, by falls in the markets the company invests in, as well as investment performance of its funds relative to its benchmarks. As a result funds under management grew only slightly from $54.8bn to $55.7bn.
The company, which is led by chairman and chief executive Neil Record, put the underperformance down to market conditions: "Currency markets continued to exhibit the patterns of behaviour of the previous six months, which are challenging for Record's systematic strategies."
Other asset managers have indicated caution thanks to the tough markets. Yesterday, the credit fund specialist BlueBay Asset Management said it had grown assets by 14% during the first quarter, but warned it was expecting a hit on its fee income.
Hugh Willis, BlueBay's chief executive, said: "Flows into BlueBay's funds continue to be strong. Market conditions continue, however, to be difficult and to limit the firm's ability to generate performance fees in the short term."
del.icio.us
Digg
Newsvine
reddit
StumbleUpon
