- Advertisement -
- Advertisement -

Passive Route to Hedge Funds

- Advertisement -

Stockholm (HedgeNordic) – In mid-February of 2019, Aberdeen Standard Investments launched the ASI HFRI-I Liquid Alternatives Ucits Fund, a vehicle that aims to provide investors with a lower-cost way of getting access to a well-diversified hedge fund portfolio. The passive hedge fund strategy invests in the nearly 200 hedge funds that are part of the HFRI-I Liquid Alternative Ucits Index designed by Hedge Fund Research.

ASI HFRI-I Liquid Alternatives Ucits Fund, which was seeded with $150 million from institutional investors in February last year, raised $527 million in assets since its launch through December, according to the Wall Street Journal. The vehicle serves as a lower-cost replacement for a fund of hedge funds, with investors charged an annual management fee of only 0.30 percent in addition to the management and performance fees of the underlying funds. The fund is open to investors based in Europe, Asia and Canada, requiring a minimum investment of as low as $100. ASI HFRI-I Liquid Alternatives Ucits Fund returned 4.1 percent net of fees since its launch in February through the end of 2019.

The downside of investing in funds of hedge funds revolves around the double-layer of fees, with the typical fund of hedge funds charging a management fee of 1 percent and a performance fee of 10 percent. Aberdeen Standard Investments plans to expand its range of lower-cost passive products offering exposure to hedge funds. Following an agreement with Hedge Fund Research, Aberdeen expects to launch an investment product tracking HFRI’s index of 500 hedge funds during the second half of 2020, writes the Wall Street Journal. The soon-to-be-launched product will offer institutional investors quarterly redemptions, allowing the vehicle to target longer-term investments.

“Given very high valuations, an aged bull market, and interest rates that provide limited negative returns,” says Duncan Moir, senior investment manager at Aberdeen, “this new fund is designed to be a defensive, absolute-return vehicle aimed at being a consistent source of return with minimal tracking error to the broad hedge-fund benchmark.”

Photo by N. on Unsplash

Subscribe to HedgeBrev, HedgeNordic’s weekly newsletter, and never miss the latest news!

Our newsletter is sent once a week, every Friday.

Eugeniu Guzun
Eugeniu Guzun
Eugeniu Guzun serves as a data analyst responsible for maintaining and gatekeeping the Nordic Hedge Index, and as a journalist covering the Nordic hedge fund industry for HedgeNordic. Eugeniu completed his Master’s degree at the Stockholm School of Economics in 2018. Write to Eugeniu Guzun at eugene@hedgenordic.com

Latest Articles

Benchmark-Plus High-Yield Investing at LD Pensions

Stockholm (HedgeNordic) – Danish pension fund LD Pensions manages two separate pension funds, each with different investment horizons. While the allocation across equities, investment-grade...

Small-cap Equities: Entering a Sweet Spot?

By Krzysztof Janiga, CFA, Senior Equity ETF Strategist at SPDR: As valuation levels in large caps became extreme, the market rally began to broaden...

Rhenman’s Healthcare Fund Transitions to Article 8 Classification

Stockholm (HedgeNordic) – Since its inception in mid-2009, the Rhenman healthcare fund has focused on investing in healthcare companies, which contribute to at least...

The ART of Finding Right Tails

Stockholm (HedgeNordic) – Philosopher Nassim Nicholas Taleb coined the term ‘Black Swan’ to describe the tendency to underestimate the likelihood of extreme, hard-to-predict events,...

Cevian Acquires Stake in Swiss Insurer

Stockholm (HedgeNordic) – Swedish activist investor Cevian Capital has unveiled a 3.12 percent stake in Swiss insurer Baloise Holding AG. The stake is valued...

Nordic Hedge Funds Sustain Momentum

Stockholm (HedgeNordic) – Following its strongest first quarter in 15 years, the Nordic hedge fund industry sustained momentum into April. As reflected by the...

Allocator Interviews

Latest Articles

In-Depth: High Yield

Voices

Request for Proposal

- Advertisement -