How to win a losing game


At Morningstar’s institutional investor forum in Vienna, funds industry experts presented their views on fund selection and fund analysis, calling for a fresh approach to the active versus passive debate.

Manager selection

The alternative industry also played an important role in Vienna. Various sessions on hedge funds and private equity focused on the role the alternative investments have in the asset allocation of institutional

Peter Clarke, chief executive of Man Group, the alternative fund house with $68.6bn in assets under management, attests strong demand for alternative strategies in Europe, even as the average hedge fund had trouble outperforming stocks in 2010.

Yet investors did not put their money into the ‘average’ hedge fund. The past couple of years showed that the dispersion of hedge fund success is vast in many strategies, such as emerging markets or long/short equity.
“Manager selection counts,” warns Clarke.

“If you get the manager wrong, this can break a good asset allocation strategy.” As this proves to be an increasing concern for allocators, change in the alternative management industry is all about transparency. Investors in Vienna stressed that they want to know and understand the strategy they invest in, even if it means paying a slightly higher price.

Talking aside, the conference was also about prizes.

The Morningstar European Fund Awards were presented in two categories: European Equity and Global Equity.

Cédric de Fonclare, manager of the Jupiter European Special Situations, was named European Equity Fund Manager of the Year, while Graham French, manager of the M&G Global Basics, triumphed in the Global Equity

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