BLACKROCK MULTI OPPORTUNITY FUND

ATTACHED FILESBlackRock Multi Opportunity Fund AFM Review - December 2013 (pdf format)

This week's round table forum organised by the Hedge Fund Association was well attended by a diverse range of fund managers and service providers, although probably less well by investors. A number of speakers gave interesting and relevant presentations, with the overall theme seeming to be standards around hedge fund reporting, structure, fees and transparency, with a particular emphasis on traps in store for the unwary investor.

Much of the forum centered around the UK based, and Northern hemisphere focussed Hedge Fund Standards Board, (HFSB) and the Open Protocol risk aggregation and reporting initiatives (previously known as OPERA). Both the HFSB standards and OPERA seem eminently logical and sensible, although understandably orientated towards the requirements or desires of institutional investors, and as a result the larger funds in which they generally invest.

However the relevance and thrust of both are entirely appropriate and applicable to the Australian absolute return and hedge fund sector, even if by and large most local managers and funds would broadly comply with the main thrusts of the HFSB, perhaps with some greater transparency around fund expenses. Meanwhile if fund managers are serious about attracting inflows from large institutional investors, either at home or abroad, they will in due course have little option but to adopt the reporting transparency of Open Protocol.

Australia's regulatory systems ensure retail investors in hedge funds are pretty well informed, even if ASIC's requirements appear broader than those detailed in HFSB's Standards, which run to 37 pages. Of course there have been a few well, and some not so well, publicised lapses in standards from some managers. However there is only so much the regulator can do before the event, so it would seem to be up to the collective power of investors to take over. As this is easier said than done, service providers, platforms, asset consultants and research houses should take the initiative.

Specific results received this week include the following PERFORMANCE and NEWS UPDATES:

Pengana Asia Special Events (onshore) Fund returned 1.22% over December and 11.55% for the previous twelve months. The Fund's strategy has seen a very volatility of 2.31% as compared to 11.43% (S&P/ASX 200 Acc) for CY2013.

The Cor Capital Fund returned -0.22% during December and 1.69% for the calendar year with a low volatility of 6.83%.

Bennelong Long Short Equity Fund returned -2.32% during January, a difficult market both globally and in Australia, with the twelve month return at 19.07%.

FUND REVIEWS RELEASED THIS WEEK:

AFM's updated Fund Review for Optimal Australia's Absolute Trust December 2013 has been released. The fund is characterised by very low risk with an annualised standard deviation of 3.60% and a Sharpe Ratio since inception of 1.73.

Morphic's Global Opportunities Fund returned 3.85% in December and 42.49% for the previous twelve months with a volatility of 9.10% p.a.

The Aurora Fortitude Absolute Return Fund is characterised by steady returns and very low risk. Since inception (March 2005) the Fund has returned 8.16% pa.

FUTURE EVENTS

NEXT WEEK on Wednesday 12 February 2014: Investment Administration Conference - Efficiency in a Regulated World. Doltone House, Hyde Park, Sydney. Now in it's 17th year, this is Australia's largest annual event for custody, funds management administration, and technology.

21 February 2014 in Sydney: AIMA's Hedge Fund Regulatory Update provides an update on Hedge Fund regulations including the Investment Manager Regime; ASIC Regulatory Guides 166 and 133 plus more. No charge to attendees.

27-29 March 2014: Superannuation Fund Back Office: 2014 Forum in Sydney convenes those responsible for superannuation member administration and investment operation services. It has been designed to explore emerging efficiencies and best practice in a number of key areas.

If you know of any upcoming hedge fund industry Events, or would like your Event listed in our calendar, please contact us.

And now for something completely different, if you need something to do in Sydney, why not have a look at the Chinese New Year Festival Programme, there are still plenty of events going on this weekend to celebrate Chinese New Year.

On that note, I hope you have a happy and safe weekend.

Best wishes,

Chris
CEO, AUSTRALIAN FUND MONITORS

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Australian Fund Monitors are helping to raise awareness to support research into prevention and cure for cerebral palsy. For more information visit www.cpresearch.org.au or contact me by email.

Investment Administration Conference - Efficiency in a Regulated World

February 12, 2014 | Doltone House Hyde Park, Sydney, NSW

The Investment Administration Conference is Australia's largest annual event for custody, funds management administration, and technology. Now in its seventeenth year, the conference will explore efficiency in a regulated world. This event is presented in association with The Australian Custodial Services Association (ACSA).

There will be updates on:

• The future of custody;
• Data efficiency, management and security;
• Case studies of successful mergers;
• Software and other industry vendors;
• A review of the Stronger Super reforms, including first reporting on MySuper;
• A discussion on tax and audit matters;
• Case studies on innovation and efficiency from industry thought leaders;
• A look at what the first major review of Australia's financial system will mean for the custody and investment administration sectors;
• and many opportunities to network with your peers.

Attendee profile:

• Super Funds - Chief investment officers, Chief executive officers, legal and compliance, middle and back office;
• Fund Managers - operational management and staff;
• Custodians - management, operations and sales;
• Software and other industry vendors.

Pricing from 1 January, 2014:

General admission         $845 + GST

View the Agenda here.

For further information and details on how to register, please click here.

ATTACHED FILES20140212 IAC Agenda (pdf format)

• The Aurora Fortitude Absolute Return Fund  (AFARF) has a 8 year track record investing in ASX listed equities. A Market Neutral overlay is used across a multi strategy approach which allows for flexible asset allocation to maximise returns and minimise risk under a variety of market conditions and cycles.CIO John Corr has over 20 years financial market experience with a strong focus on risk.
• Significant use of low risk "long" derivatives and option overlays has provided positive returns with low volatility during periods of market dislocation. Annualised return since inception is 8.16% with a very low standardised standard deviation of 2.75%. Over 87% of monthly performances have been positive, with no losing months in 2008 and a largest drawdown of -2.09%.
• ASX listed Aurora Funds Limited was established on the merger of three existing fund management businesses, managing approx. $480m on behalf  of more than 2,500 retail and wholesale investors.

Australian Fund Monitors

ATTACHED FILESAurora Fortitude Absolute Return Fund AFM Fund Review December 2013 (pdf format)

OPTIMAL AUSTRALIA ABSOLUTE TRUST

Attached is our most recently updated Fund Review on the Optimal Australia Absolute Trust.  

We would like to highlight the following:

• Optimal Australia is a specialist Australian equity investment manager and the Fund has a long/short equity strategy typically with a low but variable net market exposure comprising 40 to 65 stocks broadly selected from within the ASX2
• The Fund has recorded out-performance of the market since inception in September 2008 with approximately 84% of monthly performances having positive returns and the largest drawdown -1.38% 
• The investment team comprising George Colman, Peter Whiting and Stephen Nicholls have close to 90 years combined experience in equity markets.

For further details on the Fund, please do not hesitate to contact us.

Sean Webster

Research and Database Manager
Australian Fund Monitors

ATTACHED FILESFund Review: Optimal Australia Absolute Trust (pdf format)

AIMA Australia Hedge Fund Regulatory Update

Presented by: AIMA Australia

Friday, 21 February 2014 from 12:30 PM to 2:00 PM, Sydney, NSW

Speaker and Topic

Nikki Bentley, Partner, Henry Davis York, will be providing a free hedge fund regulatory update, including updates on the following items, with additional topics as requested if time allows:

• Update on the Investment Manager Regime and what it will mean for Australian managers wanting to raise offshore capital
• Overview of the new financial requirements in ASIC Regulatory Guide 166 including what it means for managers and custodians including incidental custody providers and responsible entities holding assets of the fund
• Overview of the new compliance requirements in ASIC Regulatory Guide RG133 when engaging custodians (including prime brokers) and associated changes to custody agreements and manager monitoring
• ASIC's current focus including a RG240 surveillance

RSVP

If you would like to attend this education event, please click here to register. If you have any specific regulatory issues you would like Nikki to cover if time allows, please include them in the box provided on the registration form.

A new report released by Moody's Investor Services suggests that an increased shift towards higher allocations to Alternative Investments, including absolute return driven strategies, is a result of investors'search for higher returns.

Moody's report indicates that the increased allocations to alternatives are likely to continue and that skilled asset managers will benefit accordingly as FUM increases. As such some traditional fund managers have been acquiring alternative asset-management expertise, noting that building such expertise organically takes a long time.

Moody's notes that the higher investment management fees, coupled with the ability to charge performance fees, is a significant attraction to fund managers adding alternative products to their existing offerings.

The Moody's report is based on their global research but is likely to be reflected in Australia as investors become increasingly aware of the quality of Australia's pool of fund managers, and are attracted by the risk adjusted returns available from thier absolute return funds. At the same time offshore asset managers continue to target the ever increasing superannuation asset pool.

For more information see Moody's media release.