Asia Search Leads to Macquarie

It sounds like US-based hedge fund investors are earning a lot of frequent flying miles with trips to Hong Kong and Singapore in search of promising Asian equity managers. Some of them have ended up with an Australian manager—an arm of investment bank Macquarie Group.

One investor says what’s most impressive about Macquarie Asian Alpha Fund is its loss in 2008. Yes, a loss of about 9.5%. By comparison, the fund’s benchmark for Asian Pacific stocks went down 43%. Macquarie Asian Alpha recovered from its small loss quickly, whereas market indexes only recently surpassed pre-crisis high-water marks (or have not done so yet).

“They’ve preserved capital reasonably well,” said the investor.  That bodes well if there is another slide in markets.

Macquarie Asian Alpha uses quantitative and fundamental analysis to select Asian Pacific companies to go long or short.  The short positions keep net market exposure low.

That meant that on the re-bound in 2009 the fund made less than Asian stock markets. But in 2010 it did better than the markets.  Cumulatively over the past four years the fund has substantially out-performed indexes.

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Tags: Asian markets, Asian Pacific stocks, Macquarie Group