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Hedge funds now eye fundamentals – Integrated

GLOBAL – Hedge fund are now looking at market fundamentals over ‘momentum trades’, according to alternative assets firm Integrated Asset Management.

“Recently, we have seen a more measured approach, with momentum trades replaced by more fundamental-driven considerations,” Integrated said. “ We consider that the resurgence of global macro managers is set to continue.”

“Most sub-strategies have reported lacklustre returns as the markets entered a period of transition following last year’s military engagement in Iraq.”

The comments came as it emerged that the growth in European hedge fund assets – which now exceed 200 billion dollars – have slowed down in recent months.

Industry publication EuroHedge said in a survey that hedge assets in Europe have risen more than 70% to 216 billion dollars – up from 125 billion dollars a year ago.

But the report also found that in recent months asset growth “appears to have been much slower as returns across the hedge fund industry have come under pressure”.

Integrated reported that its first-half pre-tax loss narrowed to 280,000 pounds from 599,000 pounds a year ago, while turnover rose 32% to 3.2 million pounds. But assets under management more than doubled to 512 million dollars from 253 million dollars a year before.

“I am pleased to report that during the six-month period ended June 30 2004, Integrated Asset Management has continued to grow and improve its financial performance,” said chairman John Booth.

It said funds of hedge funds have “continued to offer the lower volatility and lower risk option with marginally better performance when compared to traditional markets and single strategy investments”.

Integrated added it was recently awarded an investment advisory contract with Italy’s Zenit Alternative Investments – in which it holds a three percent stake. Subject to approval from the Bank of Italy, Integrated will increase its stake in Zenit to 10%.

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