Boyer Allan Investment Management (BAIM) has officially converted the
Boyer Allan Japan Fund into an emerging markets vehicle, called Boyer
Allan Global Emerging Markets Fund.
The decision was finalised on January 7, 2011 following the fund's
lacklustre performance in 2010.
The Boyer Allan Japan Fund lost 5% in 2010 after posting gains of
5.46% in 2008 and 4.2% in 2009. This, coupled with increasing demand
from US investors for an emerging markets product, triggered the
change.
This is not the first hedge fund group to close its Japanese fund in
recent years. Odey Asset Management shut down its flagship Japanese
fund in 2008 and Thames River Capital followed suit in 2009.
The Japan fund was run by Andrew Callender and Nick Tanner from 2008
until October 2010, when Tanner left Boyer Allan.
Steven Woolfe, general legal counsel for BAIM, explained "Callender
wanted to take the challenge on and Tanner still thought that there
were legs in Japan so he decided to look at opportunities elsewhere
and continue in that area."
The legal and corporate entities will remain the same and Callender
will continue to manage the fund.
Woolfe explains that BAIM no longer saw the fund's Japan focus as
feasible. "For investors, it's going to be very difficult to justify
getting returns in Japan with the way that the economy has run in the
past few years," he said.
"Over the past couple of years, the economic environment in Japan has
been quite moribund. The government itself had its own issues in
trying to resolve and excite the environment in Japan," he commented.
"It was felt by the Japan team that on a longer-term basis the returns
that could be obtained by going in to other emerging markets would be
a greater advantage to those investors that remained within the fund,"
he added.
According to Woolfe, Callender has previous experience of working with
emerging markets and can capitalise on the expertise provided by
BAIM's newly acquired emerging markets team from Zebedee Capital in
May 2010.
BAIM is hoping the new Boyer Allan Global Emerging Markets Fund will
generate the same level of returns as the other principal funds
managed by the Boyer Allan Group.
To date the Boyer Allan Emerging Markets (EMEA) Fund at its year-end
return for 2010 was 11% and it has returned 4.3% annually over the
past three years.
Its flagship long/short equity fund Boyer Allan Pacific Partners Fund
has returned an average of 18.7% since inception 12 years ago, "nearly
three times the market return with similar volatility", Woolfe pointed
out.
The long/short equity fund excluding Japan, Boyer Allan Pacific
Opportunities Fund, has returned an average of 30.7% over the past
four years, "six times the market return with lower volatility", while
the long/short equity fund Boyer Allan Greater China Fund has returned
18.2% over the last four years.
According to the Irish Stock Exchange announcement, BAIM "considers
the fund's current assets under management (AUM) of $18.1 million as
of August 31, 2010 and the uncertain outlook for the Japanese stock
market do not establish a positive commercial future for a fund
investing solely in the Japanese markets under the current investment
objective."
Boyer Allan is a global fund management company with an estimated
total AUM of $800 million. It runs a total of nine funds, ranging from
long/short equity to Ucits and long-only funds.
Source: HedgeFundsReview.Com
