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Alternative investments: NZ managers lead hedge fund performance

Kiwi funds outperform global index; Investor interest grows

What Black Swan returned to investors in 12 months

New Zealand hedge fund managers have been attracting investors as their returns outperform their non-domestic peers. Last year, the Ernst & Young New Zealand index returned more than 20% while the global average index, the HFRI index, lost almost the same amount. There are now about 40 boutique fund managers across hedge funds, commodity trading advisers and absolute return equity managers in New Zealand. Most are very small, managing assets in the tens of million dollars range. This year, returns have come down compared with the HFRI but are still in positive territory. Up to the end of April, the New Zealand index was up 1.35%, whereas the HFRI index was up 4%.

One of the firms, 36 South Investment Managers, closed its Black Swan fund in March after returning 236% over a 12-month period. In May, the firm moved the front office to London from Auckland in order to be nearer investors. Anthony Limbrick, chairman and chief executive of Pure Capital, a quant hedge fund in New Zealand, says the country is enjoying increased interest from investors because of last year’s stellar returns.

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