GAM Diversity One - New Rating

By MARCEL PORCHERON 02/02/2006

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GAM Diversity is a diversified fund of hedge funds with a global multi-strategy mandate. It seeks to provide consistent absolute returns with low volatility and low correlation to equity and bond markets. GAM are a significant presence in the world of hedge funds with extensive coverage of the universe and a large database of fund research. The Diversity process is well defined and extremely rigorous, combining the top down views of David Smith with bottom research. Research is qualitative and quantitative, while internal performance monitoring is undertaken regularly and quality of output linked to staff remuneration. Monthly returns have been solid although it should be noted that the fund was not immune to the tough environment for the sector in 2004. Annualised returns have been good over the 16 years since inception, although we would not expect the fund to have a high beta and so it should lag in markets with strong upward momentum. The fund's relatively low annual management charge with no performance fee, makes it an attractive proposition. There has been a massive increase in assets under management over the last few years, so the total is now circa $50 bn. However, Diversity One now has spare capacity and this is our preferred recommendation in the range since it offers access to underlying holdings which may now be closed to new money. The dollar class of Diversity One returned 8.73% in 2005 against 10.02% for the MSCI. The CSFB Investable multi strategy index returned 6.02%. Capacity is limited and the fund may only be open for a short period.

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Source: Financial Express