Standard & Poor's new fund of hedge fund ratings system has attracted another client - US-based Perm...
Standard & Poor's new fund of hedge fund ratings system has attracted another client – US-based Permal Asset Management. The company's four funds garnered three AA ratings and a single A.
The single A was awarded to Permal Asian Holdings. S&P's described the fund as one of the more volatile in the range. The research team said "This reflects market conditions in Asia-Pacific equities given the focus on equity long/short funds and a significant allocation – up to 33% – to long only. Timing on strategy allocation changes has been good, contributing to the fund's outperformance of the index over the past three and five years cumulatively."
The three other funds, all of which gained AA ratings, are the Permal Global High Yield Holdings fund, which provides diversified exposure to global credit markets through a portfolio of hedge funds and fixed income long only; The Perman Long Short Global Equity Holdings, and the Permal FX, Financial & Futures fund, which is part of Permal's global low-volatility, focused-strategy range.
The FX fund has achieved its benchmark of 6% over money market rates with 4% to 5% vol but S&P's warns investors to look carefully as the funds under management accelerated hugely in 2003.
S&P said: "We would not normally give much credence to a track record that is associated with this kind of change in fund size. However, we take comfort from the fund's volatility of 4.9% over the past three years being on target and similar to the four other global, low-volatility-focused funds managed by the team (3% to 5% target volatility). The long experience and strong track records that the team has with other fund of hedge funds that include trading strategies is also a benefit."
S&P's funds of hedge
Permal Asian Holdings A
Permal Global High Yield Holdings AA
Perman Long / Short Global Equity Holdings AA
Permal FX, Financial & Futures AA
£300bn of liabilities
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Transfer from occupational scheme
Appointed by FCA and PSR boards