Winner: Best performing specialist fund of hedge funds over 10 years.

Highly commended: Hedge Funds Review fund of hedge funds of the decade.

2009

Winner: Best Performing Specialist Fund of Hedge Funds Over 10 Years

Launched in April 1999 the Stenham Quadrant fund has achieved an average annualised return of 10.06% over the past 10 years against an MSCI index that is in negative figures. Volatility over this period has been a low 5.70%.

“What is very important is the consistency of our returns,” explains investment director Javier Uribarren. “Since we started this fund back in 1999, equities have given a zero per cent return with high volatility. Not only have we preserved capital, we have provided clients with stable returns with low volatility.”

Uribarren continues: “It’s not just how much capital you generate that matters, but how you get there. Our volatility is less than that of bonds! That is attractive for our clients, especially when you look at equities or consider that the MSCI world has been marginally negative over this time.”

The fund's remit is to capture major market movements through investment in a range of assets, capital instruments, markets and strategies. The fund invests worldwide with no bias being placed on any geographical allocation. Assets are invested with managers trading in four major areas: equities, commodities, fixed income and currencies.

“Stenham Quadrant is a global macro fund of hedge funds,” notes Uribarren. “We consider the macro economic environment the fund is operating in and we select the funds that will do the best within this environment. But our view is long term. We don't view global macro as a cyclical strategy. Our funds are multi-asset funds and we have a relatively low turnover because we expect them to make money in all scenarios.”

Emphasis is placed on researching, monitoring and reviewing managers to ascertain their suitability for blending together to achieve consistent superior returns with low volatility. The 10 strong investment team, headed by chief investment officer Kevin Arenson, runs an investment process which has evolved over Stenham's 26 year history in asset management, during which time it has been tested through many different market environments.

The process is qualitative with significant input from operational and quantitative research. Risk is limited through worldwide diversification and hedged strategies.

Much of the investment team's time is spent monitoring the underlying and potential add-in managers and the decision to stay with an existing manager is an active one for the company, though turnover is low.

“We don’t change managers just to take advantage of every shift in the economic cycle,” Uribarren insists. “We truly expect our managers to deliver returns over the long-term regardless of market conditions. Through time we may change the size of an allocation according to its risk profile - we might reduce holdings in a fund we perceived as having a higher average risk to reward ratio than the overall portfolio.”

When assessing a new manager, the analyst team will also examine the length of time the manager and his supporting investment team has worked together and the sustainability of the business.

A focus on client communication and risk management has helped the fund accrue and keep its $635.9 million of assets under management, according to Uribarren.

“We always feel a duty to our clients to protect their capital. That is the basis of our strategy. Then we think of the upside. This approach is one reason why we have been so successful at minimising volatility. What is very important is the consistency of our returns - our benchmark is cash,” he says.

Susanne Petrie, European sales manager, Comada (left) with Javier Uribarren, Stenham Asset Management

Fund facts

Full name of fund: Stenham Quadrant (USD Class)
Name of investment/management company: Stenham Asset Management
Name of portfolio manager: Javier Uribarren
Contact: Sudha Bharadia (+44 (0)20 7079 6711; sudha.bharadia@stenham.com)
Launch date: April 1999
Assets under management: $635.9 million
Annualised return (over 10 years): 10.06%
Annualised volatility: 5.70%
Strategy: global macro
Share classes: US dollar
Administrator: Fortis Prime Fund Solutions (Isle of Man)
Custodian: Mees Pierson (Channel Islands)
Domicile: British Virgin Islands
Management fee: 1.5%
Performance fee: none
Minimum investment: $25,000
Lock-in/up: none
Redemption period: monthly with 90 days’ notice