Kaizen Sponsors FINSIA’s Hedge Fund 101 Lunch And Learn

Kaizen Recruitment was proud to have sponsored the Hedge Fund Lunch and Learn session hosted by FINSIA.

Michael Gallagher, Director and General Manager of Alternative Investment Management Association (AIMA) Australia introduced himself and AIMA as the global representative of the alternative investment industry. With over 2,000 corporate members globally, AIMA’s members collectively represent more than $2 trillion in assets in the alternative investments sector.

AIMA aims to provide an interactive forum for the industry, and to pioneer sound practices and enhanced transparency. In addition to the unbiased and insightful research provided by AIMA Research, Michael also listed some of the initiatives by AIMA, including launching an Australian student-run hedge fund, Australian Students Asset Management; a charity-based organisation.

Michael discussed the definition of a ‘hedge fund’ according to ASIC, stating that a wide range of funds fall under the definition due to their ‘complex investment strategy or structure’. Alternative investment strategies typically fall under long/short, market neutral, event-driven, macro, and credit, but also span across cash, options, multi-strategy, CTA, and more. Michael then advised that Australia comprises of approximately 140 hedge funds, ex-long only, totalling up to at least $100 billion FUM.

Michael then debunked some of the common misconceptions of hedge funds, advising that hedge funds:

• Do not necessarily charge high performance and management fees;
• Can be either highly levered or unlevered;
• Can be liquid and easy to access, from alternative structures and replicating alternative strategies through exchange-traded funds;
• Contributes to productivity, and not necessarily market and systemic risk; and
• Can lose money for their investors.

Michael also explored the risks and considerations prior to investing with an alternatives fund manager, including leverage, speculative practices (short-selling), fund liquidity, fund structure and diversification. To assist with the due diligence process, AIMA offers an industry standard Due Diligence Questionnaire (DDQ) that is widely used by the industry.

Overall, the session served as an insightful and productive platform for professionals to learn and acquire greater awareness of the alternative investment industry.

The Kaizen team wishes to thank FINSIA for hosting the event, Michael Gallagher in educating and sharing about hedge funds and AIMA, and the rest of the attendees for coming to the event.

Kind regards,

Daniel Ong – Recruitment Consultant