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FoHF Gottex records AUM rise for third quarter

Date: Thursday, October 21, 2010
Author: Joanne Harris, HedgeFunds Review

Inflows into managed accounts helped drive assets under management (AUM) at fund of hedge funds (FoHF) company Gottex to a 6.9% increase during the third quarter of 2010.

In a trading statement for the quarter Gottex said total fee-earning assets had increased from $7.3 billion at the end of June to $7.8 billion at the end of September.

The group's managed accounts platform, Gottex Solutions Services, more than doubled AUM from $450 million to $1.01 billion as a result of additional managed accounts on its platform as well as its first major risk reporting mandate.

Meanwhile, AUM for the company's FoHFs was fairly static, dropping just 0.8% from $6.8 billion to $6.75 billion. The change was attributed to subscriptions of $190 million, a positive $120 million impact from foreign exchange movements and technical factors and positive performance of $60 million offset by $360 million of redemptions and $60 million cash returned to investors in run-off share classes.

Gottex said its core market neutral products were between 3.4% and 8.3% away from regaining their high water marks at the end of September. The company said it would implement a deferred incentive fee scheme, deferring 25% of performance fees for two years which would be returned to the fund if performance was not maintained.

Chairman and CEO Joachim Gottschalk said the move would align the company with the interests of investors.

"We believe that this innovative change to the incentive fee structure of these products may be unique among commingled funds of hedge funds," Gottschalk said.