Over 500 of the leading players in the global fund of funds industry came together last night at the Pierre Hotel in New York for the fifth annual InvestHedge Funds of Funds Awards for the best risk adjusted performance among the global funds of funds universe.
Silver Creek Capital Management of Seattle, a winner of multiple awards in 2005, walked away with two awards at the Award ceremony in New York on 14 March, including Group of the Year, an accolade it also picked up last year. But this year the firm shared the limelight with Benchmark Plus of Tacoma, Washington.
Silver Creek, founded by Eric Dillon and Tim Flaherty in 1994, also took home the Emerging Managers Award for the third year running, while Benchmark Plus, founded by Robert Ferguson and Scott Franzblau in 1998, won prizes for the best big Global Multi-Strategy fund as well as for New Fund of the Year.
Among this years winners were many new names including Attalus Capital, winner of Institutional Firm of the Year, Alpha Beta Capital Management, winner of the new Leveraged Category, and SSR Capital Partners, which took home the new Asset Based Lending Award.
In this years awards, InvestHedge took into account the industry moving into more specialized strategy areas with the addition of five new award categories including Commodities, Emerging Markets, and Event Driven & Distressed. The European Equity Award was won jointly by last years winner FRM Equity Opportunity Fund SPC Europe and Key Asset Managements Key Europe.
GAM Multi-Europe II took home the prestigious Fund of the Year award, the nominees for which were announced last night. In the last five years GAM and its funds have been nominated no less than 10 times and won four separate awards, while Silver Creek has now had some 19 nominations and eight wins. Permal, also a winner of multiple awards over the years, has had no less than 15 nominations.
The complete list of winners by category:
Lyrical Multi-Manager Fund
Persistent Edge Asia Partners
Federal Street Asia/Emerging Markets Fund
European Equity: FRM Equity Opportunity Fund SPC Europe
Berens Global Value Fund
Global Multi-Strategy Fund ($100m - $500m):
Blackstone Market Opportunities Fund
Global Multi-Strategy Fund (over $500m):
Benchmark Plus Institutional Partners Equity Fund
HSBC Multi-Adviser Arbitrage Fund
Event Driven & Distressed:
Private Advisors Distressed Opportunities Fund
Synergy Fund C
Pinnacle Natural Resources Fund
Fixed Income & Credit:
Lighthouse Credit Opportunities Fund
Alpha Beta Capital Partners
Asset Based Lending:
Strategic Stable Return Fund
Silver Creek Early Advantage
Group of the Year:
Silver Creek Capital Management
Institutional Firm of the Year:
New Fund of Funds of the Year:
Benchmark Plus Long Short Partners Equity Fund
Fund of the Year:
Background & Decision Criteria
The event, which was held at the Pierre Hotel in Manhattan, recognised outstanding performance in the funds of funds industry based primarily on the Sharpe ratio, a measure of returns above the risk-free rate divided by standard deviation. Apart from New Fund of the Year, the minimum asset size to qualify was $100 million. Nominees also had to beat their peer group median return in order to qualify.
The Sharpe ratio for the calendar year was used to select the shortlist in each of the main categories; thereafter, the fund with the best return won providing its Sharpe was also within 25% of the fund with the best Sharpe ratio in the category. Prizes thus went to the funds that, by our methodology, displayed the best risk-adjusted returns for the year.
The reason for the two-tiered Sharpe ratio and return as the deciding criteria is that it is designed to reflect what investors are looking for namely strong risk-adjusted returns, but also ultimately strong performance.
For some of the award categories, the Sharpe ratio alone was not an appropriate screen. For example, with more than 480 management groups now in the InvestHedge fund of funds universe, to qualify for Group of the Year we stipulated that nominees needed to have either at least $10 billion in discretionary assets in funds of funds and at least one nomination for the various other award categories or at least three nominations and at least $3 billion in assets.
The Group of the Year nominations were decided by various quantitative factors including the weighted average Sharpe ratio across the firms product range, out-performance of the InvestHedge medians (weighted by assets), as well as growth of assets under management both by absolute amount and in percentage terms.
Institutional Firm of the Year is the only award based on asset growth rather than performance. For this, the number of mandates won as recorded by InvestHedge over the past year, combined with asset growth, both in absolute and percentage terms as measured in the InvestHedge Billion Dollar Club, were among the factors taken into account. Nominees also needed to have more than 80% of their assets coming from the institutional market.
To qualify, funds must provide their data to InvestHedge, which has the largest funds of funds database and a team of data analysts that compile the performance numbers and indices for the global funds of funds industry each month.