Kier Boley
Co-Head and CIO of UBP Alternative Investment Solutions (AIS)
Hedge funds: beyond traditional investing
Hedge funds offer diverse investment approaches to generate returns uncorrelated to traditional markets.
Hedge funds provide a compelling way for investors to diversify their portfolios and enhance risk-adjusted returns. With a vast array of strategies spanning asset classes and geographies, hedge funds can deliver exposure to differentiated sources of return, helping to mitigate overall portfolio risk. At UBP, we have been investing in hedge funds since 1972, making us one of the pioneers and most experienced players in the industry. Our rigorous manager selection process and portfolio construction expertise enable us to craft bespoke solutions tailored to our clients’ objectives.
The asset class’s investment potential
The case for hedge funds
In an environment of heightened volatility and uncertainty, hedge funds can play a valuable role in investors' portfolios.
- Diversification: Hedge funds can provide exposure to strategies and risk factors that have limited correlations to traditional asset classes, and add value to any portfolio.
- Alpha potential: Skilled hedge fund managers can generate returns that are less dependent on the overall market direction, providing a source of uncorrelated alpha.
- Downside protection: Most hedge fund strategies aim to mitigate downside risk during market drawdowns.
- Flexibility: Hedge funds can dynamically adjust their exposures to adapt to changing market conditions, potentially enhancing returns and managing risk.
With interest rates likely to remain higher for longer, dispersion and volatility across sectors and asset classes should continue to create attractive opportunities for hedge funds. As hedge funds’ performances have picked up in recent years, we see the asset class as a valuable complement to traditional portfolios.
A disciplined path to manager selection
We view hedge funds as a strategic allocation with a 3–5-year investment horizon. Our investment philosophy is centred on rigorous manager selection and portfolio construction.
In-depth analysis to identify skilled managers with robust methods and track records.
Creation of diversified portfolios for risk control and steady return profiles.
Partnering with clients to craft bespoke solutions matching their wider asset allocation.
Monitoring underlying managers and portfolios to constantly adapt to market conditions or manager circumstances.
Our hedge fund selection process leverages the profound experience of our Alternative Investment Solutions team, which has invested in the asset class for decades. By combining top-down market views with bottom-up manager research, we aim to identify the most compelling hedge fund opportunities while rigorously managing risk.
Ready to explore the potential of hedge funds?
Engage with our Alternative Investment Solutions team to discover how our hedge fund expertise can help you build a more resilient portfolio.
Strategies for every market environment
We provide a range of hedge fund solutions to address different investor needs.
- Fixed Income Alternative: Strategies that aim to generate stable, uncorrelated returns with a focus on capital preservation.
- Diversifiers to traditional assets: Strategies that provide diversification benefits to conventional stock-bond portfolios.
- Asymmetric equity: Strategies that seek to capture equity upside while mitigating downside risk through limited market beta.
Awards
Best Alternative Investment Manager (European WealthBriefing Awards, 2024)*
* Past performance is not a guide for current or future results.
"At UBP, we believe alternative investments should be a strategic allocation in our clients’ portfolios. Focusing on a broad set of strategies that generate pure alpha allows us to offer tailor-made solutions that provide attractive and diversifying sources of returns, irrespective of the overall market conditions."
Investor Insights
Hedge funds can provide access to uncorrelated sources of return that are unavailable through traditional assets, potentially improving portfolio diversification and risk-adjusted returns.
Key risks include selecting the wrong manager and needing to be adequately diversified. Thorough due diligence and robust portfolio construction are essential to mitigate these risks.
Assess your portfolio's risk factor exposures and build your hedge fund allocation to provide complementary exposures. Selecting a trusted partner with extensive hedge fund expertise is also vital.
Meet the team
UBP's Alternative Investment Solutions team, led by Kier Boley and John Argi, leverages its members’ average industry experience of close to 20 years to identify top hedge fund managers globally. The 26-person team's collaborative approach and rigorous due diligence enable the construction of high-conviction portfolios.
Key facts and figures
- First hedge fund investment in 1972
- Over 60 institutional mandates
- 90+ recommended funds
- Seasoned team with, on average, 17 years of industry experience
Your contacts
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John Argi
Co-Head UBP Alternative Investment Solutions (AIS)
07.11.2024
Thematic strategies in the face of disruptive events
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Alternatives’ comeback: strategic allocations to hedge funds
Explore how alternative investments – especially hedge funds – are paving the way for diversified, stable returns amid market volatility.
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Alternative fund selection requires a thorough analysis of the operational and legal structure
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Hedge funds are seeing positive inflows this year, says UBP’s Nicolas Faller, who also talked to us about his preferences in terms of bond and equity investments.
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How market shifts are benefiting hedge funds
In mid-August, UBP raised its conviction rating on hedge funds from 3/5 to 4/5, reflecting the belief that alternative investments are well-positioned to navigate the shifting market landscape.
