How we help you invest in hedge funds
Partnering with one of the largest hedge fund investors globally, it leaves us well placed to select the right opportunities for your needs.
We focus on the needs and challenges you face. It’s the way we’ve always worked, and it’s this experience and the insights we have gained over the past quarter of a century that have contributed to HSBC becoming a centre of excellence for hedge fund investing.
Strong industry relationships
Our hedge fund research team has long-standing relationships with many of the world’s leading and specialist hedge funds, as well as access to new launches. We are able to leverage these relationships and enjoy a high level of engagement with all of the managers on our approved platform. This increased interaction helps to create a greater level of transparency between us and the manager, which in turn provides a greater insight into the investment and non-investment risks associated with each fund.
Global investment infrastructure
Our global investment infrastructure includes proprietary systems and is supported by experienced support and development teams. It is partly through this infrastructure that we can implement strong governance and comprehensive risk oversight across invested hedge funds, commingled and customised client portfolios.
With over 20 years’ allocation experience behind us and a proven track record, we are today one of the largest hedge fund investors globally (source: InvestHedge, Billion Dollar Club Survey, December 2012). We offer you a deep, well-researched manager platform and our expertise has been recognised by industry awards, and our investors and peers alike.
We believe that markets contain inefficiencies which can be exploited by hedge fund managers who exhibit the skill necessary to deliver excess returns. We believe that such investment skill can be identified by the global, dynamic and repeatable research process we have been developing for over 20 years.
We believe that we are able to identify the most talented managers across what we consider to be the best strategies globally, and ensure that we capture these managers during their best periods. We are able to manage investment risk through ongoing monitoring and due diligence, which helps us to avoid unrewarded risks.
HSBC’s hedge fund client solutions
Our hedge fund solutions have been developed to suit different client needs, as well as differing levels of client involvement.
- Funds of Hedge Funds: a wide range of commingled hedge fund solutions for different allocation purposes.
- Customised Mandates: creating bespoke hedge fund portfolios diversified across strategies, regions and managers.
- Modular Advisory: providing the experience, knowledge and infrastructure to support direct hedge fund investing.
With over 20 years’ allocation experience we are one of the largest hedge fund investors globally offering a deep, well-researched manager platform.
- Hedge funds operate in a less regulated environment
- Hedge funds are less liquid, for example quarterly with 45 days’ notice
- Hedge funds have imperfect transparency and less frequent pricing and reporting (typically monthly) and this makes investor due diligence, monitoring, performance tracking and reporting more complicated; some hedge funds may take leveraged positions or large positions in risky or less liquid investments which may be subject to significant market volatility
- The risk of any particular hedge fund will vary according to its strategy; your Relationship Manager will be able to provide more details
- The rules and regulations of the UK Financial Services and Markets Act 2000 for the protection of investors, including the protection of the Financial Services Compensation Scheme, do not apply to investment business undertaken with the non-UK offices of the HSBC Group
- Investors in hedge funds should keep in mind that these products can be highly speculative and may not be suitable for all clients. Investors should ensure that they understand the features of the products and fund strategies and the risks involved, before deciding whether or not to invest in such products
- These investments are generally intended for experienced and financially sophisticated investors who are willing to bear the risks associated with such investments, which can include: loss of all or a substantial portion of the investment; increased risk of loss due to leveraging, short-selling or other speculative investment practices; delays in tax reporting; prohibitions and/or material restrictions on transferring interests in the fund; and higher fees than mutual funds
- Diversification does not assure profit nor protect against loss in a declining market