Funds Hub

Money managers under the microscope

Opportunities in the listed sector

December 22, 2009

Despite this year’s rally, opportunities remain in the listed hedge funds sector, according to analysts at Numis Securities.

A year ago the future of the sector looked in doubt, the broker writes in a note out today, as discounts to net asset value reached 40 percent and investors scrambled for liquidity in the wake of the collapse of Lehman Brothers.

But after the sector’s subsequent shake-out, as a number of funds wound up or returned capital, share prices have risen and discounts have closed — they are now at 15 percent.

Nevertheless, stockpickers can still find interesting ideas, the broker claims.

Numis says it favours Dexion Absolute, Absolute Return, BH Global and BH Macro among more liquid funds.

Among less liquid names it likes Signet (one of its corporate broking clients) and FRM Credit, which are both on discounts of more than 20 pct.

And it also sees some short-term opportunities — for instance, MW TOPS is on a 12 pct discount but is expected to offer an exit to shareholders at a 2 percent discount in April next year.

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