• The Australian profiled Kardinia Capital, the underlying manager for the Bennelong Kardinia Absolute Return Fund, a long-short Australian equity fund.  The $20 million wholesale fund is led by Mark Burgess and Kristiaan Rehder, and is supported by Bennelong Funds Management.  It will launch a retail offering shortly.
• The Australian also covered the expansion of retail hedge fund products and broader disclosure requirements from ASIC.  The report noted that the hedge fund industry’s ‘recent performance has been relatively good despite dire sharemarket returns.’
• InvestorDaily quoted MLC Investment Management senior strategist Michael Karagianis as saying more sophisticated solutions, such as absolute return, credit, alternative asset classes and equity income strategies should be considered by investors (to replace the current heavy reliance on cash/bonds).
• Money Management covered Simon Ho’s (director of hedge fund Triple3 Partners) speech at van Eyk’s annual conference in Sydney about volatility as an asset class.
• BRW profiled Brisbane-based Blue Sky Alternatives which was listed in January this year. BRW (and I&T News) also profiled David Hobart, (40) manager of the Blue Sky Apeiron Global Macro Trust ($8 million AUM).

A negative story came from SMH (author John Collett) which led with ‘The claim that an investment can perform in ”all market conditions” always had a whiff of snake oil about it.’

Read more: http://www.smh.com.au/money/investing/risks-of-life-on-the-hedge-20120228-1tzjf.html#ixzz1pbX90fe9

Highlights;

• Hedge fund performance fell short of investment’ expectations but their confidence in hedge funds remains strong.
• 37 percent of Asia Pacific investors intend to increase allocations to hedge funds.
• Global macro is the top strategy sought by investors.
• 46 percent of investors intend to invest opportunistically in Asia Pacific hedge funds rather than having a set timeline for investment.

Details at

http://www.preqin.com/docs/reports/Preqin_Global_ARC_Study_of_Asian_Institutional_Hedge_Fund_Investments.pdf

The report showed a record low Investor Sentiment Index of -22.4, just below -22.3 reached in the first quarter of 2009.  The index, established in 2005, gauges the confidence of 843 people nationwide across demographics, and wealth levels. The survey was conducted during the two weeks to 5 December 2011.

***

Meanwhile, self-managed super funds (SMSFs) allocation to cash increased two percentage points to 26.7 percent in the December 2011 quarter.   The allocation is the highest level in two years, according to Money Management citing the latest Multiport Investment Patterns Survey.

Alternative assets including hedge funds grew from 0.5 to 1.1 percent of total SMSF AuM.  Other asset class allocations included domestic equity (35.4 percent), fixed interest (11.5 percent), international shares (7.9 percent), and property (17.6 percent).

***

Financial planners were also worried, as they placed 28 percent of new client money into cash and term deposits as of November 2011, up from 18 percent in June 2011 and 16 percent in November 2010, according to InvestorDaily citing the Investment Trends November 2011 Adviser Product & Marketing Needs Report.

The flow into cash has come at the expense of listed investments and managed funds which fell to 65 percent from 75 percent in June.  The Investment Trends report surveyed 966 planners across Australia from October to November.  The Report showed that investors expected the benchmark S&P/ASX 200 stocks index to increase by only 3 per cent in 2012.

Highlights…

• Hedge fund investment consultants feel that the more established markets in the regions of North America (77 percent) and Europe (60 percent) will present the best investment opportunities in the asset class over the next 12 months. Asia only attracted 46 percent of consultantʼs votes

• The most attractive strategies for consultants were event driven, macro, and long / short equity although rankings were close and no single strategy stood out.

• 54 percent said they and their clients will invest more capital into hedge funds in the next 12 months than they did last year, and nearly a third are planning to invest the same amount.

• The report also revealed the common mistakes that managers make when pitching to consultants. These included;

1. A tendency to overstate their track records

2. Being overly pushy

3. Not differentiating themselves from every other firm

4. Focusing too much on comparative IRRs and multiples rather than on how value was created and how they see the markets, and the possibilities for creating value going forward.

Details at

http://www.preqin.com/docs/press/Preqin_Alternative_Investment_Consultant_Outlook.pdf