Thursday, December 18, 2008

Another good month for New Zealand managers...

Hi - another good month for New Zealand managers with the Ernst and Young New Zealand Absolute Return Index returning +1.502% in November making it +17.597% year-to-date. Since inception the index has returned +27.471% and is currently annualizing at +19.24%. In terms of sectoral performance - weakness in global equities again in line with global equity indices, and strength in volatility and tail risk strategies.
Anthony Limbrick

Wednesday, December 17, 2008

Amber Partners on Madoff


Amber Partners, a London-based hedge fund certification business recently put out an interesting Amber Alert (comment) on Madoff.

Key points made were:

  1. Investors who invested directly with Madoff did not buy shares in an offshore company or partnership interests in an onshore limited partnership.
  2. It was extremely unusual for a firm of Madoff's size and supposed reputation to utilize an audit firm which was quite clearly not one of the "top 4" firms nor a specialist in auditing broker-dealers.
  3. Amber Partners has never known a broker that refuses to send trade tickets to clients, other than in hard copy form via the postal system.
  4. Madoff was infamous for not letting investors visit their offices to performan any on-site due diligence.
  5. Many who invested with Madoff recognized the risks involved. A logical counter argument to all of the above "red flags" was that there would have to be substantial collusion within Madoff for such a fraud to go undetected for such a long period, and there was also the fact of his continued regulation by SEC and FINRA.

If you want a copy of the release, please register at the NZARA website ( Once website access has been granted you may find the document in the Library on the site. You could also register on the Amber Partners website at for future alerts and announcements.


Anthony Limbrick

Tuesday, December 16, 2008

From the FT - "Ten reasons to..."


The Financial Times ( has some excellent columnists and their Alphaville blog ( is a great way to get a real time view on market developments.

With the Madoff disaster putting the global alternative investment industry under even more pressure, I thought it was time for some educated light relief.

Please see the link below for "Ten reasons why you should hug a hedgie" from the Lombard column. Amusing - but also some good points made - points that should be considered before the proverbial "baby" is thrown out with "bath water".

Tuesday, December 2, 2008


Hi there,

As of this week the New Zealand Absolute Return Association (NZARA) is happy to endorse the Chartered Alternative Investment Analyst Association (CAIA), the global organization responsible for education of investment professionals active in the alternative investment industry.

CAIA's Chartered Alternative Investment Analyst qualification is a best-practice educational standard, now attempted by thousands of applicants from across the globe every year.
Please note the links below for more information on the CAIA program.

Preliminary Diagnostic Review - a test of the traditional finance material that candidates are expected to know).

Please note a representative of CAIA is likely to be visiting Australia and New Zealand in early 2009.

Monday, November 24, 2008

Response to the NBR article...

National Business Review today published an article with the headline "John Key annoys local hedge fund managers".

The New Zealand Absolute Return Association (NZARA) would like to clarify that the New Zealand investment managers represented by the association are not "annoyed" with the Prime Minister but have noted his comment regarding hedge funds, and take that as a continuity from recent statements implying improved disclosure may be one of the areas to get a regulatory boost. If this were to be so, NZARA would welcome this initiative. We believe transparency is healthy for all involved in the investment management industry, be they investment managers, investors or regulators.

Anthony Limbrick
New Zealand Absolute Return Association

Link to the National Business Review article is below:

A new member of the New Zealand index...

Pie Funds, an Auckland-based absolute return equity manager is to join the Ernst & Young New Zealand Absolute Return Index.

Pie Funds was founded by Mike Taylor and Richard Avery-Wright in 2007. Their flagship fund is the Pie Australasian Growth Fund which focuses on small to mid cap stocks and short term opportunistic trading.

The fund is unleveraged but has the ability to short futures and trade options for downside protection. Since inception, the fund has outperformed the ASX small cap index by around 20% p.a.

Link here:

Sunday, November 23, 2008

New Zealand Prime Minister John Key on hedge funds...

From Reuters

"We can no longer afford to ignore the effect that the amount of risk that hedge funds are able to take through leverage that is arguably completely disproportionate to the real economy," said Key.

Link here:

Wednesday, November 19, 2008

Another good month for New Zealand managers...

Hi there

October 2008 was a good month for most of the New Zealand investment managers represented in the Ernst & Young New Zealand Absolute Return index. The index was +15% YTD, and +2.8% for the month.

Before I tell you who the managers are, firstly understand that they are wholesale-only - and are not available for retail investment. They may also expose one's investment to substantial risk - so make sure any offering documentation is read thoroughly so that all risks are fully understood. Past performance is not necessarily an indication of future performance. And when I talk about performance I am talking about that firms "NZARA Average".

There is a strong representation by trend followers and volatility/tail risk in the group. Trend-follower, MS Capital Management was +25% for October, targeted non-correlation manager Pure Capital (my team) was +6% and volatility and tail risk manager, 36 South was +4% for the month. One of the more interesting performances was Commodity Strategies, a commodity trader that was +4%. A great performance considering how weak commodity markets have been. This was the result of a long-short commodity product they run.

These are difficult times. It is satisfying to see New Zealand managers proving they can hold their own in challenging markets - and performing well against global peers.

For more information on the index, please go to


Ant Limbrick
Chairman - NZARA

Tuesday, October 21, 2008

NZARA launches a new performance index...

Hi there

After months of work we have finally launched our Ernst & Young New Zealand Absolute Return Index...which is compiled by Ernst & Young on a monthly basis. (Minter Ellison put together the docs). It is pretty exciting to see New Zealand managers outperform their peers offshore, a manifestation I believe of the innovation and competence of the group. For September 2008 the index was up >3% while much of the industry was down...-6% is a commonly cited number. N.B. Ernst & Young does not accept responsibility for the performance of the index, nor for the veracity of the performance information presented by the constituent managers.
More information is available at

Anthony Limbrick

Sunday, May 25, 2008

First post...


This is the first post on the New Zealand Absolute Return Association blog.

We will follow up with information on the New Zealand absolute return industry and the New Zealand investment environment in due course.