21/08/2008

UBP still confident in CTA/macro managers

Union Bancaire Privee (UBP), the world’s second largest hedge fund allocator with $56.9bn in assets under management, is increasing its allocation to CTA and macro managers, Jan Frogg, head of alternative investments at the firm, confirmed.

Due to the difficult environment, the fund of hedge funds (FoHF) has deleveraged in certain hedge fund strategies, most notably directional equity long/short managers.

UBP will continue to strengthen its allocation to CTA and macro, as well as credit strategies.

Currently the portfolio has 10% in macro/CTA strategies, but Frogg predicts this will increase to 20%: “We’re looking at opportunities made available through dislocated assets and mispricing,” he said.

UBP enjoyed $5bn in inflows in the first half of the year, allowing the private bank’s alternative division to target opportunities in the credit market.

“Managers with access to capital will build up positions that can generate capital in the future,” explained Frogg.

UBP launched two distressed-focused FoHFs earlier this year, one a private equity hedge fund blend and the other a pure distressed product.

Inflows into UBP alternatives contradict the general industry trend where redemptions and stagnant inflows have hampered growth.