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Credit Suisse liquidates fund of hedge funds

Credit Suisse liquidates fund of hedge funds

Credit Suisse has liquidated one its fund of hedge funds due to dwindling assets in the strategy, Citywire Switzerland can reveal. 

Credit Suisse Prime Select Trust (Lux) Multi Strategy fund invested across different hedge fund strategies with the biggest allocations being to long/short equity (37.22%), global macro (19.93%) and CTA strategies (11.76%) at the end of April 2017.

The top positions were Legg Mason Western Premier Class USD, Man Ahl Evolution and Lindengrove Cap Enhanced Feeder.

The fund managers responsible for the fund were Bernard Hechinger, head of manager research, Stéphane Julen, head of fundamental strategies, and Ulrich Keller, head and CIO of liquid alternatives.

All three managers remain at Credit Suisse and will continue to look after other alternative strategies.

Speaking to Citywire Switzerland, Dirk Wieringa, an alternative investments adviser at Credit Suisse, said the fund had just $20 million in assets. Most of its volume was owned by private clients in Europe and Switzerland.

‘Clients are looking for more innovative concepts like the CS (Lux) Multi-Advisor Equity Alpha fund or some more momentum-driven cost efficient alternatives. We shifted our product offering not in the least in order to give investors the choice for lower cost solutions.’

Earlier in March Credit Suisse closed another alternative fund, CS (Lux) Prima Growth, based on changes in investors' demand. 

Change in focus

Wieringa added that investors started looking increasingly more into L/S strategies as fundamentals are driving stock prices, which makes it easier than a year ago to generate alpha in these type of funds.

He said for those investors who don’t want to allocate money to other alternative funds in the range, Credit Suisse is offering another solution.

‘We were able to negotiate access to closed funds with a scarce capacity for a short period of time. We offer those in different forms and structures, be it as a fund, or a certificate.

'This is something that attracted interest and we actually raised more than a $100 million in such structures in the short period of a couple of months’

Credit Suisse said when it comes to the current trends in the hedge funds space, quant strategies are definitely gaining traction. However the firm doesn’t offer pure quant solutions at the moment.

‘Fundamental quant was always part of our research and a component in our portfolios. Pure quant, however, has its pitfalls also, but we see an increasing interest in the space,’ Wieringa added.

The liquid alternatives division of Credit Suisse currently manages $13 billion and offers more than 150 funds and risk premia approved for investment. 

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