SWITZERLAND - Fund of hedge funds group Gottex Fund Management Holdings suffered a 16% decline in fee-earning assets last year, but saw the managed account program it launched in June grow to US$500m reflecting interest from institutional investors in separate accounts.
The Swiss-headquartered group announced its 2009 results this morning.
Over the period, its assets, almost 90% of which are institutional, fell from $9.6bn to $8.1bn. Its clients withdrew $1.7bn last year, but Gottex received $1.1bn in subscriptions. It made $200m through investment performance.
Capital in portfolios it is liquidating, and foreign exchange moves also affected its assets.
The group said: "We expect institutional clients to increase allocations as the year progresses [but] there is not a uniform trend of inflows yet."
Group flows reflect institutional investors' increasing preference to have their hedge fund money run separately of other investors'.
Assets in Gottex's market-neutral and directional strategies, for which it is best known, fell from $5.9bn to $4.8bn. Assets in its asset-backed strategies also contracted.
In contrast, assets on the 10-month old Gottex Solutions Services segregated account platform hit $500m. Nestle Capital Advisers stoked GSS with a mandate for Nestle's pension fund soon after its launch.
Through GSS, Gottex offers risk management and advisory services beyond its fund clients. It should have 15 clients by the end of 2010, Gottex said.
The Swiss-listed manager is also developing a Ucits-compliant portfolio.
Although 2009 ended up as hedge funds' best year since at least 1990, according to analysts Hedge Fund Research, poor performance at the end of 2008 and early 2009 caused heavy redemptions, notably from funds of funds.
Gottex's gross revenues fell from $168m in 2008 to $83m, and operating profit dropping from $58.6m to $10.1m.
At the end of February, Gottex's main market neutral products were still 5% to 9% below their previous peaks.
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