Statistics on emerging manager launches confirm outperformance....

By Peter Urbani, CIO, Infiniti Capital (peter.urbani@infiniti-capital.com)

Emerging Managers, defined as those hedge funds with less than 36 Months of history and less than $300m in AUM, are continuing to deliver on their promise of generating returns 300 – 400bp per annum over and above the returns of older, more established hedge funds.

This is reflected by both the performance of the Infiniti Capital Emerging Manager Indices relative to wider industry fund of funds benchmarks and Infiniti’s own emerging manager funds over the past 12 months to end June 2008 (see chart in PDF available on Source link).

The approximately 300bp of relative outperformance of the two Infiniti Emerging Manager fund of funds to wider fund of funds benchmarks such as the HFRI Fund of Funds and HFRX Equally Weighted Strategies Index is in line with earlier research conducted by Infiniti Capital on the likely out-performance of ‘Emerging Managers’ as well as that of numerous academic studies.

The updated Infiniti Capital Emerging Managers Indices show that ‘Emerging Managers’ continue to deliver excess returns of up to 500bp per annum over and above the returns of older more established funds. (see table in PDF available on Source link).

This finding is in line with that of various other studies. However, Infiniti is one of the few fund of fund managers to actually run ‘Emerging Manager’ fund of funds. Infiniti offers two ‘Emerging Manager’ fund of funds - one a pure emerging manager fund and the other a 50:50 blend of established and emerging managers.

Over the past 5 years to end June the Infiniti Emerging Managers Index ( <>

Over the same time period (past 5 years), on a back-tested basis, Infiniti’s own pure Emerging Managers fund of funds would have genera......................


Source:
http://www.opalesque.com/AMB2008/46178Statistics_on_emerging_manager_launches_confirm_outperformance.html