By Greg Bright
It’s what used to be known as ‘Hedge Fund Week’, and still is, at least colloquially. It is the week that represents a confluence of events involving the study and discussion of hedge-fund-like investment strategies, with the AIMA Australia Forum, and the celebration of those who have proved themselves the best over the past year, with the Australian Alternative Investment Awards.
Some of us might have thought that investors as a mass, including wholesale and retail investment platforms and advisory groups, would have accepted the term “hedge fund” by now. Apparently not. Maybe not even some of our big super funds, who are among the most sophisticated investors in the world.
Both AIMA Australia, which hosts the biggest annual conference for the industry and institutional investors, at the Sofitel Sydney Wentworth tomorrow (September 12), and the Hedge Funds Rock charity night, which coincides with the Awards, have decided not to emphasise the term any more.
The Awards take place on Thursday (September 14) at the Shangri La Hotel, also in Sydney. See link for all the nominees and other info:
And the annual Conexus Financial Absolute Returns conference takes place during the day at the Westin Hotel in Sydney on September 14. As the name implies, this event looks to promote absolute returns strategies, including real assets, hedge funds and other ‘alternatives’, to large super funds.
So, more than 20 years after a small group of people, such as Damien Hatfield and Kim Ivey, got together to build some industry infrastructure around the interesting managers who deviated from the norm – hedge fund managers – we still have a range of terms to describe what they do. And they don’t like being called ‘hedge funds’.
Hatfield and Ivey, in particular, but also others, were crucial in supporting Hedge Funds Rock and in bringing the global AIMA organisation to Australia through the establishment of a local chapter. And they are still active in promoting the cause.
The problem is, for whatever reason, the term ‘hedge funds’ is sometimes associated with high-risk strategies, which is ironic given that a ‘hedge’ is a defensive strategy, by definition. And, after years of hard evidence, it is clear that most hedge fund managers have better relative performance when markets perform poorly than when they are running. They actually, on average, do what they were invented to do.
So, welcome to ‘Hedge Fund Week’, or ‘Alternative Investment Week’, or ‘Absolute Returns Week’. The main thing that these managers try to do, probably more so than traditional managers, is to provide better risk/return outcomes for their clients. What’s in a name, anyway?