NEWS - 25

Viennese firm seeks hedge fund and fund of fund acquisitions

Sep 17, 2012, By Beverly Chandler

(LEFT TO RIGHT) Jim Cone, Michael Browne, Marc de Kloe, Kathryn Kaminski, Oliver Prock, Anthony Torriani, Matthias Knab

Oliver Prock, chief executive officer and chief investment officer of Vienna and Liechstenstein based Salus Alpha Group AG is in the market to buy other alternatives businesses. In an interview with Opalesque, Prock said: "We are interested in buying other businesses, either funds of funds run by people that are done with the business and want to have a change, or maybe single strategy funds of any type where there is a problem with distribution or marketing."

The firm was founded in 2001 by Prock and a team from Erste Bank in Vienna, where they had been responsible for funds of funds and other alternatives.

Prock says: "We felt that the offshore structures for the domestic market that were being offered would be under siege in the future, so our business plan was to create onshore daily liquid products."

This they did by bringing out a UCITS I hedge fund based fund. "We were the first to offer an alternative UCITS in 2003" Prock says. The firm has now grown to 50 people and funds under management of $1bn, with offices worldwide in Vienna, Liechtenstein, India, Stockholm and Hong Kong among other places.

They now focus on specialised funds, structured products and managed accounts for institutions such as pension funds, insurance companies and family offices. The firm started with the retail product UCITS, "because there was no choice of professional UCITS funds so we started with UCITS for all our clientele", Prock says.

Early days saw the firm offering a fund of funds and in-house managing investment strategies as managed accounts. "We didn’t actively market them" says Prock. "When UCITS I became UCITS III, it became possible to have it in an index format so we moved the in-house strategies from their managed account structure to a publicly available UCITS fund in 2007." Their flagship fund, the Directional Markets fund has been running since 2003, firstly as a managed account and then as a fund from 1st December 2008, with an annualised return of 15% since 2003. It is based on a quantitative research model derived by the firm’s research team in Vienna, Liechtenstein and India and it is registered in Vienna.

"It is a CTA portfolio managed on a quantitative basis, covering bonds, equities, commodities and so on but the difference is that there is no technical analysis involved – it is based purely on statistics and price forecasting" Prock says.

The fund’s prospectus lists assets selected for Salus Alpha Directional Markets as predominantly financial indices employing the commodity trading advisors (CTA) management strategy. Shares in investment funds may amount to a maximum of 10% of Salus Alpha Directional Markets’ fund assets and according to the investment strategy, money market instruments may comprise up to 100% of the fund assets.

The fund has a Sharpe ratio of above 1, meaning that for every 1% of return, the fund is taking less than 1% of risk. It has a 34% correlation with Winton, according to Prock. Salus Alpha has a European passport through its Liechtenstein license and plans, according to Prock, to move into the US sometime in the future.

Salus Alpha sponsored and attended the recent Opalesque Roundtable in Monaco. 

NEWS - 11

Video (sponsored forum): Ucits structures remain attractive to hedge funds

30 Aug 2011

Alceda Fund Management, Bank of America Merrill Lynch, KB Associates and fund management company Salus Alpha Capital debate some of the reasons hedge funds are interested in Ucits vehicles.

Michael Sanders, CEO of Alceda Fund Management, Eric Personne, head of fund solutions group at Bank of America Merrill Lynch, and Claire Cawley, executive director at KB Associates, together with Günther Schneider, hedge fund specialist with Salus Alpha Capital, discuss the attractions of Ucits structures for hedge funds as well as some of the negative aspects.

For Sanders there are two reasons why a hedge fund manager should be interested in Ucits vehicles. He cited institutional investor preference for more regulated, liquid and transparent structures as well as easier distribution of the fund, not only in the European Union but around the globe.

"There is a huge appetite for launching Ucits funds," agreed Cawley, "and it's driven by investor demand." After the 2008 crisis investors are looking for products offering a regulated solution and solutions that "look like a safe house". "I think you also find a lot of US managers are looking towards Ucits for the purpose of gaining access to a large number of markets," she concluded.

Personne thinks US managers are now aware of Ucits whereas a couple of years ago they were not interested. "If you believe what you deliver is real added value, and alternative investment claims it is added value and I do believe it is, there is no reason why this product shouldn't reach the largest possible audience," he declared.

Hedge fund specialist Schneider confirmed Salus Alpha Capital was one of the first hedge funds to move into Ucits. "The reasons: it's a standardised package, it's safe assets and finally you have a very defined liquidity - and that's always been missing in the offshore world."

View the full filmed discussion

Salus Alpha Group

INTRODUCTION

Salus Alpha Group AG better known as '''Salus Alpha''' was founded in 2001, headquatred at Zug Switzerland. Has established a reputation as world leader in daily liquid UCITS alternative investments.

Salus Alpha Group AG is the holding company of the individual Salus Alpha entities world wide. The Group is specialized in Wealth and Asset Management for institutional investors, and High Net Worth Clients. For retail investors Salus Alpha Direct is the first online platform for investing in hedge funds.

The key to it's success is it's organizational structure and above all it's global presence, whereby it is able to guarantee direct contact to the client and short reaction time to changing market environments.

ABOUT COMPANY

Salus Alpha Group AG is the holding company of the individual Salus Alpha entities. Salus Alpha was founded in 2001 with the vision of merging the tenfold larger traditional fund world with the alternative investment fund world.

As pioneering firm in UCITS compliant Hedge Funds. Salus Alpha is motivated by the need to provide exceptional solutions to meet investors’ requirements for liquidity, safety of assets and market independent attractive returns. It's Hedge Fund structures with daily liquidity are unmatched till today. This Group engages in wealth and asset management for high net worth individuals and institutional investors and provides tailored solutions for clients and their financial needs.

Salus Alpha’s exceptional innovation potential is demonstrated by a list of worldwide groundbreaking developments such as launching the world's first UCITS eligible Hedge Fund Indices or implementing the first UCITS Hedge Funds with daily liquidity. The Group’s current revolutionary project is the launch of the first online platform for retail investors to invest in Hedge Funds. 

The Group’s commitment to investment management, wealth administration and risk management is supported by experts in various fields such as investment analysis, fund management and fiscal law. Through their combined knowledge and expertise they have identified the urgent need to provide customized and enhanced investment products for it's clients.

Founded in Europe the Group expands currently globally with offices in Dubai, Singapore, Hong Kong, Taiwan, Japan, Columbia, Peru, Chile and South Africa to facilitate local presence and relationships. Bringing Hedge Funds to the traditional fund space produces enormous growth potential and by exporting it's knowledge into the global market it is totally committed to ensuring that it's exceptional investment solutions will revolutionise the traditional fund world.

KEY PEOPLE

Oliver Prock

He is CEO and CIO of Salus Alpha Capital Ltd. He graduated from Vienna University of Business and Economics with an MBA and has gained experience in different investment fields such as financial engineering, product development, trading and sales. He started his career working for an American CTA. Later on, he was in charge of derivatives and structured products at Raiffeisen Zentralbank AG.

Before becoming CEO of Salus Alpha, he worked at Erste Bank, where he was responsible for the development and the management of alternative investment products of Erste Bank. Mr. Prock has gained over 15 years of professional investment experience working for banks and investment companies in Austria and abroad.

As CEO and Fund Manager he has achieved important successes in the past years in the field of alternative investments, as for instance the introduction of the first world-wide the UCITS III compliant alternative investment fund "Salus Alpha Equity Hedged". Also, the successful development of the alternative investment indices listed on the Viennese stock exchange was realized under his management.

Furthermore, Mr. Oliver Prock is founding member and chairman of the board of the association "Vereinigung Alternativer Investments" (VAI). Founded in 2003, this association is the first independent agency for protecting and representing the interests of the providers of alternative investment products on the Austrian capital market.

Apart from providing support to the members in all areas, the VAI regards the increase of popularity of alternative investments and the improvement in the understanding of these investment vehicles as one of its major tasks. In addition, the VAI tries to increase the attractiveness of Austria as the investment location for alternative investments through various measures.

Günther Schneider

He is the Head of Global Business Development of Salus Alpha Capital Ltd. He graduated from Vienna University of Business and Economics with a Master in Business Administration.

Before becoming a member of Salus Alpha he had worked as Chief Investment Officer of Skandia Austria and as a Member of the Board of Skandia Austria Holding AG. Prior to that, he was in charge of Fixed Income Securities at the Raiffeisen Zentralbank AG.

With his previous work experience and his contacts, Mr. Schneider plays an important role in raising awareness for our innovative products in the European market. Mr. Schneider has gained exceptional professional investment experience for over 20 years, while working in different investment fields for banks and investment companies in Austria and Europe.

AWARDS

Since its foundation, Salus Alpha’s success has been recognized in the industry and acknowledged by awards for excellence and expertise in the field.

* Winner Most Innovative Hedge Fund for Salus Alpha Event Driven Fund at the HFR European Fund of Hedge Funds Awards November, (2010)

* Special Award Alternative Investments Award of Geld-Magazin  DMX - Hedge Funds Directional (2010)

* Winner Alternative Investments Award of Geld-Magazin  Event Driven Index - Hedge Fonds, Directional (Vola <10), 5 Years Performance (2010)

* Winner Recognition Award for Excellence, BarclayHedge  Salus Alpha Multi Style - Fund of Funds Diversified, April (2010)

* Winner Recognition Award for Excellence, BarclayHedge  Salus Alpha Event Driven - Fund of Funds Distressed Securities/Event Driven, February (2010)

* Winner Alternative Investments Award of Geld-Magazin  Extraordinary good performance for DMX (2009)

* Winner Real Estate Fonds Ranking  Salus Alpha Real Estate best YTD Performance (2009)

* Highly Commended Aktienservice Research  Salus Alpha Real Estate named as Highly Commended Real Estate Fund (2009)

* Winner Aktienturnier des BoerseExpress  DMX beats german and austrian stocks (2008)

GROUP COMPANIES

Salus Alpha Capital Ltd.

Oversees Asset Management and Portfolio Management.

Salus Alpha Financial Services (Europe) Ltd.

Oversees distribution of Salus Alpha products to investors in Europe.

Alternative-Index Ltd.

Is the provider of Alternative Investment Indices for the group.

Salus Alpha Group Services Ltd.

Is responsible for marketing activities, Public Relations and Human Resources matters for the whole group .

Salus Alpha Europe BV.

Oversees European Distribution and Client Relations.

Salus Alpha Financial Services (SG) Pte. Ltd.

Oversees distribution of Salus Alpha products to institutional investors in Southeast Asia.

Salus Alpha Financial Services (HK) Ltd.

Oversees broking of Salus Alpha products to institutional investors in Asia.

Salus Alpha Financial Services (UAE) Pte. Ltd.

Oversees distribution of Salus Alpha products to institutional investors in the Middle East.

Salus Alpha Information Technologies Pvt. Ltd.

Is the center for IT development and support for the group.

Salus Alpha Research LLC.

Primarily deals with Contact initiation with Hedge Fund Managers.

Salus Alpha Financial Services Nordic.

Oversees distribution of Salus Alpha products to investors in the Nordic Region.

PRODUCTS

UCITS Funds

Undertakings for Collective Investment in Transferable Securities (or "UCITS", pronounced "yoo-sits") are a set of European Union Directives that aim to allow collective investment schemes to operate freely throughout the EU on the basis of a single authorisation from one member state. In practice many EU member nations have imposed additional regulatory requirements that have impeded free operation with the effect of protecting local asset managers.

Structured Products

In finance, a structured product, also known as a market-linked product, is generally a pre-packaged investment strategy based on derivatives, such as a single security, a basket of securities, options, indices, commodities, debt issuances and/or foreign currencies, and to a lesser extent, swaps. The variety of products just described is demonstrative of the fact that there is no single, uniform definition of a structured product. A feature of some structured products is a "principal guarantee" function, which offers protection of principal if held to maturity. For example, an investor invests 100 dollars, the issuer simply invests in a risk free bond that has sufficient interest to grow to 100 after the five-year period. This bond might cost 80 dollars today and after five years it will grow to 100 dollars. With the leftover funds the issuer purchases the options and swaps needed to perform whatever the investment strategy is. Theoretically an investor can just do this themselves, but the costs and transaction volume requirements of many options and swaps are beyond many individual investors.

Hedge Fund Indices

Hedge fund indices have to fulfill the three basic criteria to become UCITS III eligible – sufficient diversification, ability to serve as an adequate benchmark and appropriate publication. The indices provide an investable benchmark with daily liquidity that represents the risk and return of the various investable Alternative Investment Strategies. All our indices target to offer investors an unbiased reference of the performance of alternative asset classes.

Portable Alpha

Portable Alpha is an investment management term, which refers to the return of an investment manager who has completely eliminated his market risk (beta), through the use of derivatives (e.g. futures, swaps, options). In simple terms, this is a strategy that involves investing in areas that have little to no correlation with the market.
 
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EXTERNAL LINKS

Salus Alpha Group

Alternative Index
Salus Alpha Capital
Salus Alpha Group Services
Salus Alpha - Hong Kong
Salus Alpha - Singapore
Salus Alpha - Dubai
Salus Alpha Information Technology Ltd.
Salus Alpha - Nordic