To provide access to absolute return strategies JP Morgan Alternative Asset Management (JPMAAM) has been selected. By integrating a number of hedge fund strategies, the objective is to generate capital appreciation over the long term through having a diversified risk profile with relatively low volatility and a low correlation with traditional equity and fixed-income markets.
The breadth of choice of multi strategy investments, potential complexity and use of ‘niche’ strategies make investing in multi strategies a research intensive process. Nikko AM NZ and JPMAAM have undertaken a high degree of due diligence, research and ongoing monitoring of the portfolio.
JPMAAM operate a thorough and comprehensive operational due diligence process and adopt a sceptical approach to hedge fund investing, focusing on what could go wrong and where the risk lies.
The fund invests in cash and fixed interest investments, and undertakes a leveraged trading strategy based on writing options over global government bonds.