About BlackPearl Masters Fund

The BlackPearl Masters Fund is a multi strategy fund that invests in Australia’s best hedge fund managers. The Fund invests with hedge fund managers that possess valuable experience in managing or working for absolute return funds, private equity firms, proprietary trading desks or investment banks and posses a unique skill set or understanding of a particular market or strategy. Our funds generally implement investment and trading strategies that are very difficult and in some cases impossible to replicate by the majority of investors.

The hedge funds that the BlackPearl Masters Fund invests in are generally not available to investors through traditional investment, wrap or bank platforms or the majority of financial planners. Investors in the BlackPearl Masters Fund have an opportunity to invest in a fund that is significantly different to the majority of managed funds offered to most investors. This is because we only invest with hedge funds that have a significant investment competitive advantage due to their unique strategies, unconstrained mandates and focus on pure alpha, that is generating positive risk adjusted returns rather than tracking an index.

All our managers have the ability to invest both long and short and as a result have the capability to generate positive returns in both up and down markets something which we see a large advantage compared to traditional long only investment strategies. The Fund aims to invest in funds with managers that have a significant amount of their own net wealth invested in their fund so that BlackPearl Masters Fund interests are aligned with the underlying fund managers.

 

Strategy

The core of the Fund’s strategy is based on making investments in absolute return funds that employ a range of unique investment strategies, such as equity long short, equity market neutral, event driven and arbitrage with the aim of generating performance that has low correlation to the broader equities market.

By employing diverse strategies that have the potential to perform in both rising and falling market conditions the Fund seeks to generate more consistent returns with lower volatility than the general equity market and with less reliance on rising asset prices.

The Investment Manager has the flexibility to take direct investment positions, principally when seeking to manage risk through hedging or opportunistically to enhance returns. Majority of investments are made in Australian domiciled hedge funds which invest in both local and international markets.

 

Managing Risk

At BlackPearl we believe that there are various layers of risk that all investors are subject to when investing in the equity market that need to be managed. These include idiosyncratic risk or stock specific risk, beta risk which just means market risk and what we define as strategy risk. The majority of investors are aware of stock specific risk and market risk. Most investors reduce stock specific risk by diversifying their portfolio among many stocks however they are generally exposed to market risk and have no way to diversify this risk away. Even more importantly they are nearly always exposed to strategy risk. Given that even the best of best strategies will go through periods of poor performance we think it is critical that investors reduce risk by implementing numerous different strategies in their portfolio.

The BlackPearl Masters Fund aims to minimise each these risks. The fund reduces stock specific risk by diversifying across many different individual positions through the underlying hedge funds it invests in. The fund also aims to reduce market risk by being invested in strategies that can invest both long and short and hence reduce the impact the general market will have on performance. Lastly but as mentioned most importantly the fund aims to diversify among many various strategies that generate returns under different market conditions. This is something that we define as “true diversification” and see as our competitive edge versus other investment options.