Credit Agricole Asset Management (CAAM) Australia will stop offering its CAAM AI Diversified Fund, a fund-of-hedge-funds product, to local investors.
The decision was prompted by concerns the sector will be out of favour with retail investors in 2009 and 2010, according to CAAM Australia and New Zealand country head Richard Borysiewicz.
"Not surprisingly, if you look at the year 2008, the sector and fund-of-hedge-funds asset class has not performed to investor expectations," Borysiewicz said.
"But it is not just performance. The asset class has not behaved differently to equity markets and then overlaying that concern is the issue of liquidity."
He said CAAM took the view that it would take a long while for that sector and product type to recover in the eyes of retail investors and therefore felt it was necessary to focus on other products.
"So we closed the product, but we are still open for customised portfolios via an individually managed account suited to large institutions," Borysiewicz said.
He said 2008 was "very disappointing" and there was little money going into that sector during the year.
CAAM Australia spent 2008 trying to boost CAAM AI Diversified Fund's profile by developing its track record, lining up research house ratings and speaking to prospective investors to raise funds under management.
The fund, which is a feeder fund to multi-manager firm Green Way, had only managed to be provided with seed money by its Paris-based parent Credit Agricole.
The change will not affect CAAM Australia jobs and the company will continue to focus on promoting its other offerings to local investors, Borysiewicz said.
