Eligibility requirements for hedge funds to be considered for a 2019 Canadian Hedge Fund Award:
- must be domiciled in Canada
- must have a track record of at least 1 year to June 30th
- must have a minimum $10 million in AUM
- must be in CAD
Canadian Hedge Funds, including the new Alternative Mutual Funds, are categorized for the purpose of the CHFAs by fund strategy as follows:
Funds that employ primarily equity investment strategies including Long/Short Equity, Event Driven, Convertible Arbitrage, Relative Value, Statistical Arbitrage and REITs. Fixed income investments are usually less than 30% of the Fund’s portfolio. Funds with the majority of securities not marked-to-market are excluded (ie Private Equity funds are not eligible).
Funds that seek to generate absolute positive returns entirely from security selection, not market exposure. The Fund seeks to remain “Market Neutral” by investing in long and short positions with low correlation to other asset classes. Shorts are used primarily for hedging rather than alpha generation.
Funds that employ primarily fixed income investment strategies. Equity investments are usually no more than 30% of the Fund’s portfolio. Funds with the majority of securities not marked-to-market are excluded (ie Private Debt funds are not eligible).
Global Macro/Managed Futures/ Multi Strategy
Global Macro are funds that employ strategies – such as long and short positions in various equity, fixed income, currency, and futures markets – primarily on overall economic and political, “Macro-economic” views of various countries. Multi-Strat are funds that employ several strategies within the same pool of assets and Managed Futures are funds that invest primarily in futures and options with exposure to a number of markets such as commodities, energy, agriculture and currency.
Credit focused hedge funds in which the underlying securities are not marked to market.
Based on performance to June 30th, 2018, the Canadian Hedge Fund Awards measurements for each category will again be:
- Best 1 year return
- Best 3 year average annual compound return
- Best 3 year Sharpe Ratio
- Best 5-year average annual compound return
- Best 5-year Sharpe Ratio
NEW for 2019: Best Alternative Mutual Funds:
The Alternative Mutual Funds (under NI 81-102; often referred to as “Liquid Alts”) will participate in the CHFAs by fund strategy, as above. In addition, to highlight this new type of alternative investment, the CHFAs will recognize the best overall Alternative Mutual Funds in 2 ways:
– Best 1 year return
– Best Combined 5-year average annual compound return AND 5-year Sharpe Ratio
Best Overall Canadian Hedge Fund Award:
Combining best 10-year average annual compound return AND Best 10-year Sharpe Ratio, this award recognizes longevity as well as performance. Less than 50 Canadian hedge funds currently have this tenure.
Managers’ Choice Awards:
Based on voting by participating Canadian Hedge Fund managers and their staff, awards are also presented each year to service providers. In 2018 the following “Managers Choice CHFAs” were presented:
- Top Canadian Hedge Fund Administrator – SGGG Fund Services
- Top Canadian Prime Broker – CIBC Capital Markets
- Top Canadian Law Firm – McMillan LLP
- Top Canadian Accounting Firm – KPMG LLP