Aberdeen Standard Investments launches industry’s first passive hedge fund portfolio
Aberdeen Standard Investments launches industry’s first passive hedge fund portfolio
Aberdeen Standard Investments (ASI) is to launch the ASI HFRI-I Liquid Alternative UCITS Strategy. ASI will initially launch this strategy with $150 million from institutional investors.
The Strategy has been launched to meet the needs of institutional investors who wish to have exposure to the diversification and risk-return characteristics of hedge funds, but do not have the resources or expertise to select individual funds from the broad array of funds available. The Strategy will also provide investors with the industry’s first viable passive benchmark option when accessing the asset class.
The Strategy will invest in over 140 UCITS funds, mirroring the constituents and weightings of the HFRI-I Liquid Alternative UCITS Index which in aggregate has assets of more than $110 billion. The Strategy, reflecting the Index, will also be diversified by strategy with exposure to funds across Macro, Relative Value, Event Driven and Equity Hedged strategies.
HFR has become the chosen single source of hedge fund information, analysis and benchmark index provider for the alternatives industry. In recognition of client demand for indices that represent the ‘real world’ complexity of investing in the asset class, HFR have developed a range of indices that investors can now track through ASI managed funds. The first of these will be an Irish domiciled daily dealing UCITS fund.
According to a recent EuroHedge report [1], institutional investors currently represent 59% of the US$3.6 trillion hedge fund industry. Despite the size of the industry, to date, investors haven’t had a viable passive option when accessing the asset class. While the demand for passive funds has been clearly evidenced across both equity and fixed income markets the lack of options within the alternative industry now represents a significant area of growth.
ASI has been allocating to alternative investment strategies for over 20 years, helping to meet the needs of clients around the world. The launch of the Strategy is a natural next step for ASI given its desire to continue innovating based on investors evolving requirements.
Russell Barlow, Global Head of Alternative Investment Strategies, comments: “The risk-return features of hedge fund strategies appeal to institutional investors seeking to diversify portfolios and meet specific financial objectives. Although we have seen a proliferation of passive products across traditional asset classes, such as equities and bonds, to date this hasn’t been a viable option for those allocating to alternatives. The rationale for offering this capability is clear