Monday, February 22, 2010

Weekend edition: an old Astarra marketing leaflet – and some comment on Astarra’s very peculiar asset base

The Astarra funds were amongst the top performing sold retail in Australia. 

According to the advert below it is because of market timing.  Shawn Richard knew when to go to cash. 

This suggests that his asset base was highly flexible – able to be converted into large licks of cash on market turns.

He says (in the picture) and I quote:

People ask me all the time how we do it.

To me it’s simple…  why be fully invested in a deteriorating asset class?  Investors don’t pay me to invest in cash, they pay me to get out of assets at the right time.

I believe that every asset class should be treated from an absolute return philosophy.  If that means higher cash weighting for a short time then so be it. 

Shawn Richard, Chief Investment Officer

image

Now if it was easy to shift Astarra funds to cash then it should be easy now.  Alas Peter Johnston in an article in Investor Daily suggests otherwise:

AIOFP chief executive Peter Johnston said he disagreed with [the administrator’s plan of liquidating the funds] and that the AIOFP intended to voice its opinion on the matter.

"Because these assets of hedge funds are off-market assets ... if there's a fire sale, in other words if the administrator wants to get in there and just wants to wind it up in a bloody-minded sense, you're going to find they run the risk of devaluing the assets," Johnston said.

"We just disagree with their strategy. So we intend on voicing our opinions on this because they don't have any experience in dealing with hedge funds at all.

These are very peculiar assets.  They can be liquidated in response to a market turn – but they can’t safely be liquidated in response to a court order.

Enough said.

3 comments:

狂猪 said...

Hi John,

I'd like to make a reader request.

During the turbulent months of last year, I thoroughly enjoy the in-depth analysis you put together on banks solvency vs. liquidity, on Freddie Mac and Fannie Mae, and etc.

Can you do more articles that deep dive into the subject matter with models and analysis?

To be honest, your various observations are very interesting. As your reader, I am even more interested in your methods and how you think and that is what I like to learn.

Craig said...

Too good!

Anonymous said...

phenomenal post! what an absurd marketing piece, I guess this joker views himself as the second-coming of W.E.B.

General disclaimer

The content contained in this blog represents the opinions of Mr. Hempton. Mr. Hempton may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Hempton's recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author.  In particular this blog is not directed for investment purposes at US Persons.