HFA NET SHORT US SUB PRIME SECTOR
In light of recent events in global and domestic equity, bond and credit markets, and the global liquidity crunch, HFA Asset Management would like to clarify the position of its funds, with respect to these issues and in particular to clearly articulate HFA’s exposure to US Sub Prime and CDO’s (collateralised debt obligations) across its funds.
Firstly, it is important to note that the hedge funds and the traditional fund managers that have suffered significant losses or a significant lack of liquidity, have been those managers that have pursued a single investment strategy that had a specific net long exposure to CDO’s and RMBS (residential mortgage backed securities).
This particular segment of the hedge fund universe is a very low percentage of the total hedge fund industry. Therefore readers should be aware that the recent media speculation of hedge fund losses does not affect the entire hedge fund industry, but rather only a small portion of the over 7000 hedge fund managers who collectively manage in excess of an estimated US$2 trillion on behalf of Institutional, High Net Worth and Retail investors.
HFA Asset Management is an absolute return fund of fund provider with in excess of A$3.8 billion in assets under management. The HFA stable of funds are all absolute return fund of hedge funds, which are diversified across multiple managers and multiple strategies. This high level of manager and strategy diversification provides an inherent level of protection for investors against any adverse market gyrations within any specific market segment including equity bond and credit markets.
The US Sub Prime collapse comes as no surprise to HFA. Investors and advisers who have attended any of our investment briefings over the past 2 years will be well aware that Jonathan Pain (HFA Chief Investment Strategist) had been warning of the current situation for some time. To that end our portfolios have been positioned in anticipation for the current US Sub Prime situation. The recent market movements in this segment have only served to validate our existing views.