Hedge directory may bolster boutique market

A new investment manager directory may be the proof investors need to include Australia in their Asia-Pacific trips, according to Basis Point Consulting managing director David Chin.

Australian hedge and boutique management firms manage 17 per cent of total investment manager funds in Australia, the directory by Triple A Partners and Basis Point Consulting has claimed.

That constitutes 165 hedge and boutique investment managers, and $208.4 billion of the $1.19 trillion pot.

It showed the gap between the Australian market and Hong Kong's $37 billion in hedge fund and long-only absolute return assets and Singapore's $20 billion sector.

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Chin said the sector review would encourage due diligence teams to stop by Australia on their trips through the region.

"Previously, major European and US investors would visit Asia, but did not take the additional trip to Australia in the erroneous belief that the local sector was too small," he said.

But he said the directory showed, "The Australian hedge and boutique universe is much larger than expected and reflects the diverse investor support for the sector".

Institutional clients drove 61 per cent of asset flows for Australian hedge and boutique managers, while the dealer group and the planner market accounted for 29 per cent. 

The Australian Hedge and Boutique Fund Directory said 102 independently owned boutiques had $165.6 billion in assets under management (AUM), while 63 hedge funds had $42.8 billion in AUM.

The boutiques were mainly long-only benchmark unaware strategies.

More than $60 billion - or 30 per cent of sector AUM - was directed to global markets by Australian managers, including global and Asian equities, global fixed income and global macro.

The directory also broke down AUM by state, with NSW based managers totalling $142.2 billion in AUM and Victoria and Queensland based managers holding $38 billion and $24.2 billion respectively. South Australian managers had $3.5 billion and West Australian, $0.4 billion.