Saturday, 22 October 2016
Last updated 7 hours ago
Oct 14 2008 | 4:26pm ET
Union Bancaire Privée, the largest single allocator to hedge funds by assets under management with $56.87 billion, has reportedly trimmed its exposure to hedge funds at a critical time for the industry.
Christophe Bernard, the Swiss-based firm's head of asset management, said his firm cut its hedge fund exposure to between 20% and 25% from 30% at the end of last year and had also moved to more conservative or cash-generative hedge fund strategies, Reuters reports.
“Hedge funds are meant to produce absolute returns,” said Bernard, in an interview. “If we say nothing happens (by the end of the year) it will be down 10% to 11%. The basic function of hedge funds will have failed.”
Bernard also said that the firm’s portfolio has had a faster turnover rate than ever before since last January.
“We have well-established firms, big ones, that in our opinion don't get it. And if we believe they don't produce the returns for our clients in the long term we don't want to be involved.”
In April, UBP told FINalternatives that it was raising some $600 million to launch a pair of funds of funds in June focused on distressed hedge fund and private equity managers.
UBP currently manages a total of $121 billion with some $56 billion allocated to hedge funds.