Winner: Best overall group

2009

Highly commended: Best Overall Group

Founded in 1992 by Nigel Blanshard originally as an institutional fixed income fund management company to manage separate accounts, Culross began managing portfolios of hedge funds in 1995.

In 1999 Chris Keen joined the company and became a partner. Between them, the two have an impressive number of years in the funds business: Blanshard started in the industry in 1980 and Keen in 1973.

The same year Keen joined the group launched the Culross Global Fund, a thematic global investments fund of hedge funds (FoHF).

In subsequent years the company launched the Culross Arbitrage Fund in 2001, a FoHF following arbitrage strategies, and the Culross H Fund in 2005, a thematic high return focus FoHF. The Nomura Culross Alpha Note, a UK listed structured note and onshore wrapper comprised of a mix of the group's existing funds, was introduced in April 2009 along with the Culross Long Term Alpha Fund.

The group has seen its assets under management grow from $62 million in 2000 to $537 million in July 2010, with investments coming from a customer base of asset managers, wealth managers, private banks, endowments, family offices, pension funds and high net worth individuals (HNWIs).

Underpinning the success of the company is its adherence to a thematic investment approach. As Keen explains, this policy helped keep performance strong in the difficult market conditions of recent years.

“The approach that we take is thematic. We think that’s a very good way not just of investing in hedge funds but investing in general, especially when macro changes and government policy are paying such a big role in what’s happening to the market place right now,” says Keen.

In this respect competitors are few and far between as Blanshard maintains few FoHFs pursue a thematic approach.

The themes Culross uses are medium term in nature, usually lasting 12-24 months. Through a process of continuous review of investment opportunities, Culross constantly re-evaluates the chosen themes for their robustness and future prospects.

Successful theme selection, Blanshard says, requires spotting the catalysts for geopolitical and economic change early and appreciating the evolution of capital flows, market sentiment and valuation levels.

That requires evaluating the macro forces at work in the global economy and seeking out the major money making opportunities on the horizon. These could be based on observations of trends in growth or inflation in different regions, or currency valuations or political developments.

Wide diversification is achieved within each chosen theme and across the various themes selected by using several managers employing different techniques to cover each theme. This both optimises the combination of managers to deliver the best result in term of returns or capital preservation and provides a separate level of risk control to the process, in addition to the usual risk management techniques.

“When you have found a manager that stands out the chances are that you have probably found a fund that does too,” Keen explains.

Although still small by FoHF standards, Culross has ambitious plans. The company plans to expand assets under manage by $200 million plus in 2010-11 and sees no problem absorbing new money. It reckons current and planned staffing and infrastructure could cope with managing $1-$1.2 billion comfortably within the strategies it favours.

John Grundy, vice president, global fund services and hedge fund sales at Northern Trust (left), with Nigel Blanshard, Culross Global Management