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Austrian hedge fund market ‘could grow 15%’

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AUSTRIA - Funds of hedge funds in Austria could see annual growth of up to 15%, according to an Austrian alternative investments firm.

“Hedge fund investments via fund-of-funds have grown very strongly over the last five to seven years. We expect annual growth of 10%-15% going forward,” said Karin Kisling of Benchmark Advisory Ltd., a Malta-based firm specialising in products primarily for institutional investors.

She is chief investment officer of the firm, which manages €450m for Austrian and German investors. Kisling is also managing director and member of the board of Vienna-based Benchmark Capital Management.

“Hedge funds, which are low volatility products, tend to get mixed up with managed futures, which are high volatility. Also, managed futures products offered in Austria tend to be very aggressive trend-followers,” she said.

Pension funds’ attitude towards hedge funds varies depending on their size and management. Most big pension funds had “defined investment strategies of which alternatives by now form an integral part”.

Benchmark has just been awarded “A” and “A” (New) rating by Standard & Poor’s for two of its funds of hedge funds: Alternative Strategies Fund and Alternative Opportunities Fund.

Both funds are domiciled and listed in Ireland and were launched respectively in June 2000 and March 2004.

“We were particularly pleased that they rated Alternative Opportunities, which really reflects our investment policy most accurately, but has a fairly short track record as we only launched the product in March 2004,” Kisling said.

Commenting on Alternative Strategies, S&P stated: “The fund has returned more than EURIBOR each year since inception but has failed to meets its absolute return objective, however correlation, volatility and performance meet our minimum criteria.”

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