Deutsche Asset Management Launches Hedge Fund Of Funds For Oz

by Carla Johnson, InvestorsOffshore.com, London

03 August 2001

Deutsche Asset Management has launched a new hedge fund aimed at retail investors in Australia as part of its strategy to become a dominant player in the fast-growing alternative investment business. The fund of funds, called the Absolute Spectrum Global Equity Long/Short Fund expects to raise between US$50 million and US$100 million over the next year and invest the money with long/short hedge funds. The fund of funds will be run from Australia and New York.

Australian investors can participate in the fund for as little as A$5,000, very low by hedge fund standards. "This is part of our effort to continue to expand product offerings on a global basis, build our assets under management and diversify our investor base to have it run from retail to high net worth to institutional clients," said Ray Nolte, managing director and global head of multi-manager funds at Deutsche Asset Management. Nolte said the minimum investment was kept low on purpose to attract a wide spectrum of customers. "We are opening up the market to a broader constituency and this is the first region where we did this on a large basis," he said.

Deutsche's absolute returns investment group is the market leader in Australia and the Asia/Pacific region currently manages more than A$800 million in funds sourced from the region. Sydney is the hub of Deutsche's operations in the Asia/Pacific region and the company has over 25 executives solely devoted to absolute return funds in offices in New York, London and Sydney.

Deutsche Asset Management Group says it was the first to develop and bring to the Australian market a multi-manager absolute return fund product that met all Australian tax and regulatory requirements, and the new fund represents an evolution of existing investment strategies. "The fund in Australia is an outgrowth of the strategies we have in other parts of the world and it is a natural way to leverage what we are already doing for an area where demand for these products is growing," Nolte said.

Earlier this year Deutsche said it planned to invest over $500 million of its own money into its multi-manager hedge fund business, launched in 1996. Many hedge funds are currently achieving high returns when most stock indices are showing losses - but the stampede into hedge funds may turn out to be self-defeating if the wall of money hitting such strategies as long/short drowns out the opportunities that attracted it in the first place.

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