South Korea, renewables among opportunities considered by selectors
InvestmentEurope’s latest roundup of fund selector views has found South Korea, renewables, and equities are among the areas being keenly followed.
Equities remain in favour
Name: Alan Mudie
Title: Chief investment officer
Company: Union Bancaire Privée
What are your strong convictions for 2013?
Equities should continue to be favoured, while maintaining the bank’s all-important focus on those large firms with international reach, high entry barriers and regular cash flows, allowing high and rising dividend payments.
Another focus is real assets, which are more resilient to, and provide more protection from, inflation. Mining companies and large energy producers are the most likely to benefit from the current monetary policies. The US real estate sector is also well-positioned to take advantage of the current situation and participate in the economic recovery.
Eventually, creeping monetisation of public debt and central bank intervention [will] erode the value of the currency in countries making the most assiduous use of the printing press [and] gold is undeniably set to gain from this trend.
South korea opening up
Name: Antoine Rolland
Title: Chief executive officer
Company: New Alpha Asset Management
Do you foresee South Korea’s hedge fund market growing over time?
The market has started to open to other allocators in the rest of the world. It will take maybe a few years but there will be bigger allocators there and they have large pension funds.
In 2008, some were disappointed by the exposure and they have been very cautious recently. For the moment the entrepreneurial industry in emerging markets has been very well supported by wealthy individuals and private banks in an opportunistic way and lots of seedings by these types of institutions.
In our venture [with Woori Absolute Partners] we want to industrialise the process and set up a fund regulated in Singapore. We are analysing more than 140 projects in the region, and we have started with two investments at the end of this year and first quarter 2013. It is important is to have a good investment process.
Uncertainty hits performance
Name: Anthony Lawler
Title: Portfolio manager
What did you make of hedge fund performance in October?
Hedge funds delivered mixed results in October but in aggregate closed in negative territory.
The HFRX Global Hedge Fund index lost 0.5%, bringing its year-to-date performance to 2.1%.
At the strategy level, event driven, global macro and relative value approaches all posted negative returns according to the HFRX strategy indices.
Equity hedge managers had a positive month, helped by gross and net exposure levels well below long-term averages.
Policy uncertainty on both sides of the Atlantic was arguably a dominant factor influencing global markets.
Investors and corporates remain hesitant to invest and hire when the policy, tax and regulatory framework is in flux. Europe is debating its way toward a hoped ‘muddle through’ solution.