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GMO Australia has closed its GMO Australian Equities Trust ($198 million AUM) and its Small Companies Trust ($7.5 million AUM), according to the Australian newspaper citing data from Morningstar.  GMO has mandates of more than $1 billion for its bond and alternative asset funds, the newspaper notes.

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Sustainable Growth Advisers, a Stanford-Connecticut based US$3 billion asset manager, is speaking with consultants Jana and Frontier as well as MLC as it seeks to market its products in Australia, according to I&T News.  George Fraise, a co-founder of Sustainable Growth Advisers will reportedly be visiting Australia at least once per year to meet with investors and consultants.

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Shawn Richard, who was sentenced to prison last year over his involvement in the failure of a purported hedge fund Trio Capital, has made a submission to a parliamentary committee inquiry into the collapse of Trio, according to InvestorDaily.

Details at…

“Ex-Trio Chief Points Finger At Planners”

She reports to Fortress Senior Managing Director and Head of Capital Formation, Stuart Bohart, and was most recently Vice President of Business Development and Investor Relations at global investment firm Indus Capital Partners in New York.

The Fortress Australia office opened in 2004 and is led by CEO David Kelleher.   The firm has made over $3 billion of investments in Australia/NZ, and currently has a nine-member team that manages a portfolio of investments in real estate, mining and resources, health care, and consumer finance.

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Montgomery Investment Management has hired David Buckland as CEO.  He was previously CEO of Hunter Hall, a boutique manager focussed on ethical investing.  Montgomery IM, a long-only Australian equities boutique, was founded by high-profile investment identity Roger Montgomery January 2011.   The firm counts Magellan Financial Group as a minority equity investor.

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Robeco has appointed Stephen Dennis to head its first Australian office based in Sydney.  The office will focus on marketing Robeco’s active management strategies, including SRI, quant, Asia-Pacific and alternative strategies, to institutional investors.  Dennis was previously head of institutional business at Aberdeen Asset Management.  Robeco is part of Rabobank Group and has €150 billion AUM.

Highlights.

1. 38% of SWFSs are known to be investing in hedge funds and a further 2% are considering making allocations to the asset class.
2. Many SWFs are newcomers to the asset class; however they have become relatively comfortable with other types of alternative investments such as private equity (where the proportion of SWFs investing is closer to 60%) over recent years.  Consequently we expect to see this pattern replicated for hedge funds in the future.
3. More transparent strategies such as global macro and long/short equity are amongst the most sought after from this group.
4. 50% of SWFs allocate capital to both fund of hedge funds and single-manager funds.
5. Many SWFs have fixed requirements with respect to the size and experience of prospective hedge fund managers, and as a result allocations to US-based hedge funds (where the industry is well established) are particularly popular.

Details at…

“Hedge Fund Spotlight April 2012″

The firm’s second offering is the BlackRock Australian Equity Absolute Return Fund which feeds into its existing Australian Equity Market Neutral Fund.  Fees are also 0.3/30.

The 41-page report (useful for investors considering hedge fund investments) covers trends in managed accounts, UCITS hedge funds & fees; and strategies including event-driven; managed futures; active currency; alternatives beta; reinsurance, emerging market currency and volatility.

Highlights;

Only around one-third of outperformance from skill should go to hedge fund managers in the form of fees, with the rest going to the investor.

Well-aligned fee structures should include;

• Management fees that properly reflect the position of the business
• Appropriate hurdle rates
• Non-resetting high watermarks (known as a ‘loss carry-forward provision’)
• Extension of the performance fee calculation period
• Clawback provisions
• Reasonable pass through expenses.

In addition to increased levels of transparency, investors should also look at:

• Liquidity
• Gates
• Side pockets
• Key man clauses
• Initial lock periods.

Details at…

“Hedge Fund Investing – Opportunities And Challenges”.

The 10 managers are Alphinity, Ardea, Bentham, Five Oceans, Greencape, Kapstream, Kinetic, Merlon, Novaport and WaveStone.  In addition, Fidante will distribute specialist funds offered by Credit Suisse, Howard Mortgage, Orion and SG Hiscock

Over the past three months, total assets of the Future Fund rose by $4 billion to $77 billion. The Fund has generated a return of 4.9% per annum since contributions began on 5 May 2006.

The Future Fund’s return for the quarter to 31 March 2012 was 5.4% and for the financial year to date it was 2.2%.  Asset classes which received significantly more funds during the quarter were global equities (both developed and emerging markets), private equity and debt securities.

Portfolio details for the March 2012 quarter…

* Figures may not sum due to rounding

The 27-page report provides useful comparative statistics on hedge fund performance, volatility and correlations since 1994.

Highlights.  Hedge funds…

1. Have significantly outperformed equities, bonds and commodities on a risk adjusted basis
2. Achieved these returns with considerably lower volatility and Value-at-Risk (VaR) than stocks and commodities, & close to bonds in both categories
3. Were significant generators of “alpha”, creating an average of 4.19 percent per year from 1994–2011
4. Received 28 percent of all investment profits while investors received 72 percent
5. Are important liquidity providers in the markets and provide beneficial effects for price discovery, the efficient allocation of capital, financial stability, shareholder value, diversification and the broader economy.

Details at…

“The Value Of The Hedge Fund Industry To Investors, Markets And The Broader Economy”.

Limited sponsorship opportunities are available on a first-come first served basis. Email contact “at” basispoint.com.au.

Timothy Cheung, CCM’s founder, said ‘The fund has especially benefited from the phenomenal growth of Macau, China’s only legal gaming market which offers a ‘pure’ play on the China consumption story. Since the first foreign operated casino opened in Macau in 2004, the market has grown six-fold to now be five times the size of its nearest competitor, Las Vegas.’

‘Of the approximately 16 million Chinese visitors to Macau in 2011, close to three-quarters were from just one province, Guangdong, so the market is still only its infancy,’ added Cheung.

Demand from institutional investors for exposure to gaming has been on the rise as the sector has become better understood as a source of both stock-picking alpha and exposure to the Asian consumer.   Cheung has also seen a rise in deal-flow in private equity opportunities related to Asian gaming.

In response to this demand, CCM is developing a long-only gaming fund which will invest in both listed and private equity gaming opportunities. The actively managed fund will target absolute returns of 20 per cent per annum. CCM is currently talking to potential seed investors for the long-only product which could involve a listing on the Hong Kong stock market to tap Asian retail investors.

CCM was founded in 2009 by Timothy Cheung (ex Colonial and Octavian Advisors) and Brian McGlynn (ex Colonial and Commonwealth Bank). Cheung leads the three person investment team while McGlynn oversees strategy and governance.

The firm’s clients include a mix of high-net-worth individuals and a California based family office.   Advertorial.  For more information please contact Timothy Cheung at timc “at” cheungcapital.com or call  +612 9326 7086