Axa enters Newcits multi-manager arena with Luxembourg launch

Axa Investment Managers is the latest European manager to launch a multi-manager product focused on regulated hedge funds, whose assets trebled last year.

Axa’s World Fund Multi Alpha fund is registered in Luxembourg and will have core allocations to equity long/short, global macro and managed futures strategies.

It focuses on funds “that can efficiently operate within the Ucits III framework without excessive alteration which can diminish returns”.

Absolute return Ucits funds grew substantially last year, according to data provider HedgeFund Intelligence.

Assets hit $90.5bn, a near-trebling from $30.3bn a year earlier, but still well below the $423bn in offshore hedge funds of European managers.

The 129 so-called ‘Newcits’ funds that launched last year raised $9.5bn.

As this happened multi-manager products have emerged from groups such as SEB’s Key Asset Management, and GAM which said barely one year ago the universe was yet too small, and differentiation too difficult, to justify such a product.

Chris Jones, Key’s chief investment officer, said in some cases onshore and offshore funds offered equivalent returns “so you get similar returns for taking less risk [of unregulated hedge funds].”

Overall, however, the onshore hedge fund industry still lags its offshore equivalent, making about 2% in 2010 compared to 10.5% from unregulated peers.

Axa’s product aims to provide positive absolute returns over the economic cycle, with weekly liquidity.

Chris Manser, AIM’s global head of funds of hedge funds (pictured), said: “We launched AXA WF Multi Alpha to offer investors access to the growing Newcits market with the benefits of built-in diversification, the active  management of allocations and continuous portfolio monitoring.”

He said regulation offers a “useful risk management framework” for selection, but does not make due diligence and monitoring redundant.

Axa’s co-mingled funds of hedge funds currently hold about €4bn.

David Walker

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