Falling assets force hedge fund manager Gottex to trim costs (Reuters) (31-01-2012)

ZURICH - Swiss fund of hedge funds manager Gottex GFMS.S said it is cutting running costs by 15 percent in 2012 after assets fell by some $1 billion (637 million pounds) from a year earlier after a number of large clients took their money to invest directly in hedge funds.

The fund's assets under management have fallen to $7.34 billion, less than half the $15.6 billion the company had in June 2008 before the worst effects of the financial crisis hit.

Referring to fund of hedge funds, Gottex Chief Executive Joachim Gottschalk told Reuters that asset raising is difficult, though outflows are within normal parameters, adding that a serious issue for funds of hedge funds is that many large pension plans are now looking to invest directly in hedge funds rather than relying on the fund of funds model.

Gottschalk said his company is looking to its managed accounts and advisory businesses to turn asset flows positive again. Even so assets in GSS, the fund's managed account platform, fell for the second consecutive quarter.

Investor demand for managed accounts -- personalised portfolios which give investors visibility and control over their assets -- has grown since the financial crisis.

Gottschalk also said he saw Asia as the company's main area of growth, and that Gottex would be prepared to make acquisitions to expand in the region.

Gottex is due to report 2011 results on March 27.

Source: Reuters