27 Oct 2011
ML Capital Asset Management, the investment manager which runs the MontLake UCITS platform, has released the fourth edition of the quarterly ML Alternative UCITS Barometer.
Allocations to CTA’s and Global Macro strategies are set to continue to increase dramatically. The largest increase in allocations are to Global Macro systematic and CTA strategies, which both saw demand almost double over the last quarter from 30% to just under 60%.
Demand for developed equity market hedge strategies has declined noticeably since the beginning of 2011 and interest in Event Driven strategies has also been quite negative.
Interestingly, despite the fall off in demand for the main equity hedge sectors, there seems to be a big drive into emerging markets funds – with 39% of respondents indicating a desire to raise their flows into global emerging markets UCITS funds.
The two least popular categories this quarter are UK long/short equity and distressed, although the former has performed reasonably. Distressed funds are a difficult strategy to run within the UCITS rules.
ML Capital surveyed a diverse range of active investors in Alternative Investments, who collectively manage over €80 billion and today invest upwards of €30 billion of those assets into alternative UCITS Funds. Questions are aimed at discovering their forthcoming strategy allocations and are asked each quarter to the same respondents in order to track asset flows between UCITS strategies.
The range of allocators surveyed is purposely diverse, to reflect the widening of the Alternative UCITS investor base as hedge funds move from the offshore periphery to the onshore mainstream. Respondents range from insurance and pension funds to private banking organisations, with a significant constituent of financial advisers that deal with the primary source of alternative UCITS inflows, the mid-net-worth investor.
Allocations to CTA’s and Global Macro strategies are set to continue to increase dramatically. The largest increase in allocations are to Global Macro systematic and CTA strategies, which both saw demand almost double over the last quarter from 30% to just under 60%.
Demand for developed equity market hedge strategies has declined noticeably since the beginning of 2011 and interest in Event Driven strategies has also been quite negative.
Interestingly, despite the fall off in demand for the main equity hedge sectors, there seems to be a big drive into emerging markets funds – with 39% of respondents indicating a desire to raise their flows into global emerging markets UCITS funds.
The two least popular categories this quarter are UK long/short equity and distressed, although the former has performed reasonably. Distressed funds are a difficult strategy to run within the UCITS rules.
“During this quarter, where respondents’ allocations to UCITS rose dramatically from 10 to 30 billion, the increase in market volatility has seen a big shift towards those strategies that offer the potential to make money, or at least protect a significant element of the markets’ risk,” John Lowry, Co-Founder and Chairman of ML Capital commented.
ML Capital surveyed a diverse range of active investors in Alternative Investments, who collectively manage over €80 billion and today invest upwards of €30 billion of those assets into alternative UCITS Funds. Questions are aimed at discovering their forthcoming strategy allocations and are asked each quarter to the same respondents in order to track asset flows between UCITS strategies.
The range of allocators surveyed is purposely diverse, to reflect the widening of the Alternative UCITS investor base as hedge funds move from the offshore periphery to the onshore mainstream. Respondents range from insurance and pension funds to private banking organisations, with a significant constituent of financial advisers that deal with the primary source of alternative UCITS inflows, the mid-net-worth investor.
“The latest barometer results confirm a rapidly growing demand for well managed alternative investments that offer a strong element of protection on the downside,” Lowry said. “However investors recognise that there is a real need for a wider range of experienced hedge fund managers to enter the UCITS market, in order to broaden the choice of strategies.”
