Products January 10, 2011

UBS Launches Fixed Income Opportunities Fund

UBS Global Asset Management has launched the UBS Fixed Income Opportunities Fund.
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According to a press release, the fund seeks returns with low correlation to traditional equity and fixed income markets. It seeks to outperform 3-month LIBOR by 3%, net of fund ordinary operating expenses, over rolling five-year time horizons.  

The fund offers less reliance on favorable markets for positive client outcomes; the flexibility to invest opportunistically across regions, markets and sectors; and the ability to take both long and short positions to manage risk exposures. It employs a structured investment process combining a top-down global strategy, along with fundamental bottom-up analysis that seeks to generate returns.   

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“One key advantage of the Fund is that it is unconstrained by a benchmark, unlike traditional bond funds, and it can adjust its duration to be either positive or negative, based on the investment team’s outlook for the direction of interest rates,” said Brian Fehrenbach, Head of Fixed Income Derivative Strategy, in the announcement.  

According to UBS, the fund is an alternative strategy for investors who seek less reliance on favorable equity and fixed income markets, or it can be a substitute for a portion of a portfolio’s fixed income component for investors who are concerned about the possibility of rising interest rates, or want a fixed income portfolio with more flexibility than a traditional fixed income portfolio.
In Practice January 10, 2011

New Regulations Main Cause for Concern at Hedge Funds

Hedge fund CFOs say addressing new regulatory requirements and meeting evolving investor expectations are the biggest challenges for 2011, according to a poll by SEI.
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Half of the CFOs attending SEI’s Hedge Fund CFO Forum cited new regulatory requirements as the most significant challenge facing their industry over the next 12-18 months. Nearly half (47%) said they anticipate the regulations will have a significant impact on their firm’s profitability, according to a press release.  

Forty percent of CFOs said besides investment performance, the biggest challenge is providing satisfactory risk data to investors. Thirty-nine percent said economic uncertainty was their biggest challenge.   

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The survey highlighted the increasing importance of operational systems and processes in addressing regulatory changes and investor expectations. In fact, nearly a third of those polled said getting investors comfortable with the firm’s operating infrastructure is their biggest challenge in satisfying investors. When asked about the biggest operational challenge, 44% of respondents said increasing efficiency and scalability.   

“Satisfying increasing investor expectations related to transparency and due diligence requirements continues to be the drumbeat for managers,” said Phil Masterson, Managing Director for SEI’s Investment Manager Services division, in the announcement. “While we asked our clients about their challenges, we do see opportunities for managers to differentiate themselves. There are opportunities to better educate investors. Opportunities to bolster operational infrastructures.  Opportunities to enable greater transparency, drive more efficiency, and enhance internal controls.  Ultimately, if done correctly, there are opportunities for managers to create stronger client relationships and build their businesses.”

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