LHG's flagship Global Macro Hedge Fund is an investment fund that invests in global macroeconomic trends. Global macroeconomics are the economic forces that drive economies and financial markets on a national and global scale, like presidential elections, inflation or interest rates.
In this article, we will explore why investors choose to put their money in this type of hedge fund and what they can expect from it.
What is a Global Macro Hedge Fund?
While equity investors spend their time researching how particular companies operate, global macro investors do the same research, but on countries and continents, not companies.
Global macro analysis includes macroeconomic variables such as inflation, employment, GDP growth and consumption, and the strategy can invest in virtually any instrument anywhere in the world.
The primary job of a global macro hedge fund manager is to identify the imbalance between the price of an asset and the macroeconomic environment of that country/continent. It could be related to economic growth, or inflation rates, or a central bank’s decision, and then profiting from the moves in that country’s interest rates, or foreign exchange, or equity, or credit markets.
Who Invests in Our Global Macro Hedge Fund
Our Global Macro Hedge Fund was formed in 2017 by Laurence Yang to serve the needs of our early investors/partners and their Single-Family Offices (SFOs). In 2018, we opened to outside investments from family offices, institutions and high-net-worth individuals.
Today, our diverse array of investors ranges from some of the largest Single-Family Offices in Europe, to Fortune Global 500 corporations in the Greater China region, to high-net-worth-individuals in the Middle East and SMSFs in Australia.
To create a more stable capital base, in 2022, our commingled flagship Global Macro Fund has been converted into a closed-ended fund and stopped accepting outside investments. However, many of our new investors came onboard through the Separately Managed Account (SMA) solution.
Our SMA Solution
Under the SMA solution, we do NOT accept any co-mingled investments. All SMA investors will have their brokerage accounts opened separately, segregated under their own names with direct ownership, with top-tier brokerage firms.
Depending on investors’ contribution/initial deposit, each individual account will be added accordingly to our in-house Portfolio Management System (PMS) software that automatically transfers positions from the account of our flagship Global Macro Fund to all investors’ accounts within 1 second.
The development of our PMS software and automation has significantly lowered our overhead expenses for running additional investors accounts (i.e. no extra hiring/manpower needed for running additional accounts). Consequently, the required minimum investment to participate in our SMA program is significantly lower, too. Some individual investors came onboard with as little as US$300k in their brokerage account.
Why Investors Allocate Capital into Our Global Macro Hedge Fund
In our article LHG's Flagship Global Macro Hedge Fund and its Key Benefits, we discussed the key benefits of our flagship global macro strategy, which includes:
1. Offers true diversification to investor's portfolio;
2. Has lower portfolio volatility than benchmark indices;
3. Has low correlation to the traditional stock and bond markets;
4. Profits from both rising and falling markets;
5. Invests in markets with ample liquidity, no one could manipulate the market;
6. Total alignment of interest.
We have since surveyed existing & interested investors of our global macro strategy "What are the 3 most important reasons why you invested/are interested in investing in Laurence Holdings Group's (now LHG) global macro fund/strategy", the results were as follows:
Reasons voted as no.1 most important (% of investors)
Reasons voted as no.2 most important (% of investors)
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