James Williams, news editor, Hedgeweek

Alternative UCITS lose 0.17 per cent in October, Algebris launches long-only financial credit UCITS

Single manager alternative UCITS attracted EUR746million in net inflows in Q3 according to the latest quarterly compiled by MondoAlternative.

Interestingly, despite weekly liquidity funds only representing 21.7 per cent of the fund universe monitored by the firm, they attracted the most assets: EUR573million. This compares to just EUR24million for fortnightly funds. As to who was attracting the majority of Q3 inflows, the report shows that global asset managers – which they define as companies managing hedge funds and other investment vehicles - far outstripped smaller boutique hedge funds, attracting over EUR1billion in inflows.   

Stefano Gaspari, CEO at MondoAlternative, was quoted as saying: “Concerning the flows in the alternative UCITS sectors the winning strategies of the third quarter 2012 are Macro, Volatility trading and Credit long/short, the
same strategies leading the flows ranking since the beginning of the year. This means that the search for uncorrelated strategies is still on its way.
 
“Quite interesting is also the data showing that, like what happens [sic] for hedge funds, biggest funds are the sole responsible for asset inflows in to the sector. According to our data, in fact, funds managing more than EUR500 million raised almost EUR1.4billion, while smaller funds lost EUR0.7billion.”
 
Boutique asset manager, Algebris Investments (UK) LLP, has launched a long-only financial credit UCITS fund. The Dublin-domiciled Algebris Financial Credit UCITS Fund focuses on corporate credit and follows a global mandate, investing in debt and hybrid capital instruments issued by banks and insurance companies. Specifically it focuses on the global financial sector, building positions in debt securities with fixed and variable coupons, and which may be rated investment grade or below. It may also target convertible bonds, hybrid securities, which combine elements of bonds and shares, preference shares, subordinated debt and deposits.
 
Davide Serra, Founder and Managing Partner of Algebris Investments, commented: “The Algebris Financial Credit UCITS Fund was launched to give onshore long only investors across Europe access to our financial credit expertise and sector focus. We have been managing credit strategies since 2009 and have significantly outperformed the benchmarks. We believe there are very interesting opportunities in this space as the regulation changes brought on by Basel III are rolled out.”    
 
The UCITS Alternative Index Global ended October down 0.17 per cent bringing its year to date performance to +0.81 per cent. The Funds of Funds universe also ended the month in negative territory with the UCITS Alternative Index Fund of Funds down 0.54 per cent. That brings its YTD performance to a disappointing -1.90 per cent.
 
In what proved to be a challenging month, only five out of 11 strategy indices returned positive performances. The best performers were the UAI Multi-Strategy and UAI Emerging Markets indices, gaining 0.66 per cent and 0.58 per cent respectively. By contrast, the worst performing indices were UAI CTA and UAI Commodities, recording losses of 2.85 per cent and 1.95 per cent respectively. Event-driven strategies also lagged, losing 1.53 per cent. Six of the 11 benchmarks are now in negative territory YTD. The worst performer is UAI CTA, down 4.65 per cent, followed by UAI Commodities, -3.65 per cent. Fixed income is the best performer in 2012 thus far, up 4.19 per cent.   

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