Highly commended: Best performing diversified fund of hedge funds over 10 years and Hedge Funds Review fund of hedge funds of the decade

2009

Highly commended: Best performing specialist fund of hedge funds over 10 years

Investing primarily in macro, equity strategies and commodity hedge funds, the $216 million Aurum Investor Fund aims to provide attractive absolute returns over the long-term investment horizon, irrespective of equity market directionality.

Current allocation of the fund is even handed between macro at 45.1% and equity strategies at 41.5% with commodities adding diversification to the portfolio with a 7% weighting.

The fund has a bias for trading orientated managers that provide good liquidity and is invested in around 23 individual single manager funds at any one time.

London-based Aurum runs its funds with a focused eye on liquidity and transparency, a strategy that fund manager, founder and CIO Adam Sweidan says has helped the group generate consistent returns for investors over its 16 year history.

The client base is varied and includes pension funds, insurance companies, asset management groups, private banks, family offices and high net worth individuals from a broad geographic base.

The fund was launched in September 1994. Since inception the fund has achieved compound annual returns of 7.90% against volatility of 7.69% with a correlation to MSCI World Index of 0.33%.

Aurum Investor Fund is not the asset manager’s only product. In 1998 it launched Aurum Isis Fund, a low-volatility multi-strategy fund, and the Aurum Universal Fund, which invests in global equity hedge fund strategies. In 2002 it launched the Aurum Synchronicity Fund to support charitable causes.

The company has around 59 employees, up from 44 five years ago. Strong inflows in 2010 have helped the company compensate for the tough investment conditions and net outflows of $148 million in 2008 and 2009. So far in 2010, Aurum’s net inflows have totalled $166 million.

Minimum investment in the fund is $25,000, which charges a 2% management fee and a 15% performance fee, over a 10% hurdle subject to a lifetime high water mark.

A research team of 12 people, including nine investment research professionals and three operational due diligence professionals, who perform the research and make recommendations, backs the fund.

However, as with all the funds in the Aurum stable, no decision is made on investing into a hedge fund until the fund manager has met with the management of that fund.

Every month clients receive a standard report, distributed by email, which includes a comprehensive market commentary plus individual comments on the fund including net asset values (NAVs), performance drivers and asset allocation. This monthly report is also available on the website.

In addition to the report, more detailed performance statistics and enhanced transparency (such asliquidity, position concentration and others) can be provided and customised to the needs of individual clients using Aurum's proprietary reporting tools.

Fund facts

Full name of fund: Aurum Investor Fund
Management company: Aurum Funds
Portfolio manager: Adam Sweidan
Name of investment/management company: Aurum Funds
Contact: Kate Brown, 37 Ixworth Place, London SW3 3QH (+44 (0)20 7594 4133; kateb@aurum.com)
Launch date: September 1994
Assets under management: $216 million
Annualised return: 7.9% (at end August 2010)
Annualised volatility: 7.69% (at end August 2010)
Strategy: multi-strategy (global macro, equity and commodity trading)
Share classes: US dollar, sterling, euro
Administrator: Northern Trust International Fund Administration Services (Ireland)
Auditor: KPMG
Custodian: Northern Trust Fiduciary Trust (Ireland)
Domicile: Bermuda
Stock exchange listing: Ireland and Bermuda
Management fee: 2%
Performance fee: 15% over a 10% hurdle subject to a high-water mark
Minimum investment: $25,000
Lock-in/up: none