next hedge fund
- From: ** <**@.org>
- Date: Thu, 06 Sep 2007 08:08:26 +0800
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next hedge fund
FULLERTON Fund Management, a unit of Singapore state investor Temasek Holdings,
is preparing a new hedge fund as investors remain keen on alternative
investments, its chief executive Gerard Lee said yesterday.
Lee also said that Fullerton had received US$300 million in new funds from
investors in the last three months despite financial market turbulence.
Investors from Japan and South Korea provided most of the additional money, he
Fullerton, which was spun out of Temasek in 2003, manages about US$2.3 billion
in third-party funds, up from US$2 billion at around mid-May, Lee said, plus it
handles part of its parent company's US$108 billion global portfolio.
In an interview, Lee said investors continued to favour "managing portfolios on
an absolute, rather than relative returns basis".
What may change as a result of losses suffered by hedge funds that were highly
leveraged is that some investors may choose to invest in so-called "hedge fund
of funds" that would monitor the underlying funds and allocate funds to minimise
risk in return for a fee.
Fullerton's new hedge fund offering, he added, will be an "Asian multi-strategy"
fund aimed at institutional investors.
The Temasek unit already has hedge funds employing investment styles such as
"equity long only" and "equity long-short".
Lee said Fullerton's hedge funds differ from most in that they do not borrow to
boost returns and tend to cater to more risk-averse clients.
According to Lee, about a quarter of Fullerton's asset management business
involved hedge funds, while another quarter came from managing hedge fund of
funds. The remainder involved more conventional stock and bond investments.
He added that the firm focused more on Asian equities as the region's bond
markets were still undeveloped.
"We need to wait for the China and India bond markets to develop more."
Lee declined to discuss Fullerton's investment performance or asset allocation.
Looking ahead, Lee said Fullerton intended to offer a mutual fund aimed at
Singapore retail investors in the next 12-18 months.
"We want to come out with a product that gives a market rate of return higher
than deposits but which is not as volatile as equities," he said.
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