AXA IM launches fund of regulated hedge funds

By Laurence Fletcher

LONDON (Reuters) – AXA Investment Managers launched a portfolio investing in a basket of regulated hedge funds, hoping to attract investors who are hungry for hedge fund returns but worried about access to their cash after the crisis.

The AXA World Fund Multi Alpha will hold a range of so-called Ucits III hedge funds — Europe-based funds that tend to give clients more information and quicker access to their money than traditional hedge funds.

Investors can redeem once a week, the firm said on Thursday.

The fund, which AXA has seeded with 20 million euros ($28.6 million), has invested 40 to 50 percent of its assets in long-short equity funds, close to 35 percent in global macro and managed futures, 15 to 20 percent in event-driven and credit funds and around 10 percent in computer-driven market-neutral funds.

Many hedge funds and funds of funds had problems selling assets during the credit crisis and had to restrict redemptions, making many investors concerned about how easily they can access their cash in future.

That has helped fuel interest in Ucits and 129 new fund launches raised $9.5 billion last year, taking total assets in absolute return Ucits to $90.5 billion, according to HedgeFund Intelligence — although some commentators have warned that even Ucits could struggle during the next crisis.

However, Shiblee Alam, director of alternative investments at AXA Fund of Hedge Funds, said AXA’s funds of funds did not have problems giving clients their cash back during the crisis.

He added that investing in equity long-short, macro and managed futures funds “should not present liquidity issues,” while the firm had found credit and event-driven managers able to fit their strategies to Ucits without endangering liquidity.

But he added: “Being a Ucits is not a miracle stamp… We’re aware some Ucits vehicles are over-engineered and there are some cases where the underlying asset class is not liquid enough to fit into Ucits.”

(Editing by David Holmes)

($1=.6996 Euro)

AXA IM launches fund of regulated hedge funds