29 Mar 2010
Finles Capital Management is launching the first index tracker focused exclusively on Dutch-based hedge funds. The initiative is aimed at attracting more (institutional) investments in Dutch hedge funds and putting the Netherlands on the map as an international centre for this dynamic global investment sector.
Rob van Kuijk, Chief Executive of Finles Capital Management said: “A typical pension fund in the Netherlands lost 1% or more on its equity portfolio during the last ten years, while in contrast, a diversified hedge fund investor would have achieved a return of 5% during the same period with less than half the risk.”
The Dutch Hedge Fund Tracker is a fund of funds and tracks at the start the performance of a maximum of 25 hedge fund managers in the Netherlands, based on the new Dutch Hedge Fund Index. This new investible index is derived from the Finles/IEX Dutch Hedge Fund Index, which started with 17 hedge funds on 1 January 2009 and had 27 funds by January 2010. Last year, the index’s total return was 11%. The composite hedge funds are classified on four criteria: size, liquidity, costs and correlation. Based on these criteria, a maximum of 25 funds with the best scores were given a place in the index, with a weighting that ranged from 7% for numbers 1-5 to 1% for numbers 21-25. No more than 20% of the Dutch Hedge Fund Tracker can be in “less liquid” funds.
Using these rankings a smart index is created, which offers a very diverse range of investment strategies. The largest weightings in the index are currently long/short equity (29%), global macro (11%) and multi-strategy (10%).
Rob van Kuijk, Chief Executive of Finles Capital Management said: “A typical pension fund in the Netherlands lost 1% or more on its equity portfolio during the last ten years, while in contrast, a diversified hedge fund investor would have achieved a return of 5% during the same period with less than half the risk.”
Van Kuijk added: “After the UK, the Netherlands is the largest institutional investment market in Europe. We need to bring the hedge funds management talent that we have available locally together with this capital in order to establish a worldclass industry. Hedge funds based in the Netherlands have proved that they can match-up to foreign competition and achieve very good investment returns. That’s the reason we’re launching this initiative.”
The Dutch Hedge Fund Tracker is a fund of funds and tracks at the start the performance of a maximum of 25 hedge fund managers in the Netherlands, based on the new Dutch Hedge Fund Index. This new investible index is derived from the Finles/IEX Dutch Hedge Fund Index, which started with 17 hedge funds on 1 January 2009 and had 27 funds by January 2010. Last year, the index’s total return was 11%. The composite hedge funds are classified on four criteria: size, liquidity, costs and correlation. Based on these criteria, a maximum of 25 funds with the best scores were given a place in the index, with a weighting that ranged from 7% for numbers 1-5 to 1% for numbers 21-25. No more than 20% of the Dutch Hedge Fund Tracker can be in “less liquid” funds.
Using these rankings a smart index is created, which offers a very diverse range of investment strategies. The largest weightings in the index are currently long/short equity (29%), global macro (11%) and multi-strategy (10%).
Michel Klaster, Director of Dutch private wealth manager Paerel
Vermogensbeheer said: "A lot of Dutch institutions are very focused on foreign investment expertise and overlook initiatives with great potential in their own country. We believe that the hedge fund industry in the Netherlands has more than enough innovation and expertise to match-up to foreign competition and the performance of the Finles/IEX Dutch Hedge Fund Index shows this clearly. We support this initiative wholeheartedly and have committed to provide the seed capital needed.”
Rob van Kuijk concluded: “We hope that the launch of the fund will mark the beginning of a period of strong growth for this industry in The Netherlands and that many talented investment managers this way will receive support from Dutch institutions to start up or expand their own businesses. Dutch investors will benefit from a strong and innovative financial industry in the Netherlands. They are guaranteed good corporate governance, organisations that are subject to tax liability, transparency, short lines of communication and competitive conditions and performance.”
