Hedge funds won’t be allowed to die. Temasek comes to the aid

Shirin Ismail, head of absolute returns investment strategies at Fullerton Fund Management unit of Temasek, told at the Reuters Private Equity and Hedge Funds Summit in Singapore that the company would be allocating more money into hedge funds. “This is an area we will add on because this is where we think it will give us that level of capital preservation that we need,” she said. 

A year after hedge fund withdrawals reached a record $159bn, and some commentators even predicted that half of existing hedge fund managers could be shutting down, Fullerton plans to allocate more funds to hedge funds as they provide greater downside protection comparing to equities. 

Ms Ismail did not disclose the exact amount of money to be allocated to hedge funds. The assets under its management weren’t revealed either, although it is known from previous reports that they had made about $10bn as of September last year. It is also known that Fullerton’s absolute returns fund, mainly hedge funds, lost 11pc-12pc of its value last year.

Moreover, Ms Ismail highlighted that fees have begun to fall below the typical base fee of 2pc of assets and 20pc of returns wich exceed the pre-determined hurdle rate.