London-based FoHF HeadStart Advisers’ August gain of nearly 5% in the multi-strategy HeadStart Fund of Funds has taken YTD returns to just short of 15%.
Elsewhere, FoHFs are down just shy of 4% for the year, With data shows, with consecutive losses in April, May, and June, prompted by declines in crypto, healthcare and tech stocks. The average FoHF returned 8.6% in 2021 and 10.9% in 2020. HeadStart gained 11.6% in 2021 and 20.8% in 2020.
“Whilst sentiment amongst market professionals may now be erring on the side of caution, market behaviour continues to be focused on buying the past cycle e.g. technology and long-duration investments,” Najy Nasser, the firm’s CIO wrote.
Multi-strategy, global macro, and thematic long/short equity make up just under 40% of the strategy’s allocations, with long/short multi-sector fundamental and European mid-caps are the lowest-weighted. HeadStart has around $92m in AuM.
Investment process
Nasser told With Intelligence that HeadStart divides its hedge fund managers into three distinct buckets – core, new, and opportunistic.
Core managers must be able to demonstrate that they have the ability to perform through investment and business cycles. HeadStart seeks to invest in new managers early on – either through seed deals or founders’ share classes. “Getting in early gives us an edge – our emerging hedge fund managers are happy to speak with us and keep us updated since we invest as soon as possible – there’s more time for an early investor than investor number one hundred,” Nasser said.
HeadStart’s opportunistic roster consists of managers that present a timely opportunity, arising from market trends that typically have a one to three-year investment horizon.
