Stenham Asset Management has responded to client demand for greater control over their currency exposures by adding new share classes to its two largest fund of hedge fund strategies. From Feb. 1, the $3 billion firm’s multistrategy and global macro funds of funds will be available in Canadian dollar, Australian dollar and Singaporean dollar tranches. Until now, the funds have only been offered in U.S. dollar, euro and sterling classes.
Harry Wulfsohn, head of institutional business development in London, said that Stenham has received requests for greater currency diversification from local and foreign investors, particularly private banks. Investors are concerned about the future strength of the major Western currencies and are looking for exposure to currencies that are likely to perform better because of fundamental growth in their respective economies, said Wulfsohn. Stenham has settled on the Canadian and Australian currencies because they are commodity-driven, while the Singaporean dollar has been added as a way for clients to benefit from the Asian growth story.
Investors will be able to switch between currency classes at no extra cost and hold positions through any or all of the currency classes, said Wulfsohn. The multistrategy Stenham Universal Fund and Stenham Universal II Fund hold $1.7 billion between them, while the firm’s global macro strategy—available via the Stenham Trading Fund and Stenham Quadrant Fund—manages $800 million. The firm runs several other funds of funds, including portfolios focused on gold managers, Asia strategies and natural resources managers. Wulfsohn said there are no new currency classes planned for these smaller funds.
Hedge funds and funds of funds have long sought to make their strategies more appealing by offering multiple share classes, and many funds are available in at least two or three of the major currencies. Recently, some firms have taken this a step further and developed share classes linked to the price of a particular commodity. In 2009, Paulson & Co., Osmium Capital Management and Reech Alternative Investment Management Group were among those to launch gold share classes; Reech also rolled out an oil barrel-denominated class.
--Robert Murray