Having lived through volatile markets and recessions since its inception in 1998, Millen Capital is well experienced in understanding and managing risk. While most forms of investments available to retail investors focus on relative returns, whereby the aim is to outperform an index regardless of whether it is up or down, Millen Capital has structured its business with a bias towards the generation of absolute returns. Our only benchmark is cash and we believe that if risk is to be taken, the target return should exceed that offered by risk free rates.
WHY HEDGE FUNDS?
Many hedge funds, contrary to some people's beliefs, are relatively low risk compared to equities. It is often stated that hedge funds are a 'stay rich, not get rich' investment. As such they are suitable investments for SIPPs due to their capital preservation (or absolute return) focus.
- Target is to produce absolute returns
- Low volatility
- Alignment of interests – most hedge fund managers have a high portion of their net worth invested in their own funds
- Focus on capital preservation
- Access to the most talented fund managers
- Long term track record – the first hedge funds emerged in the 1940s
The graph below illustrates the performance of 2 absolute return (hedge) funds in the Millen Capital “stable” of preferred funds versus the benchmark.
Source: Bloomberg
