• Fund of Hedge Funds achieved high net returns – independent of equity and credit market developments (beta 0.0)
• Low volatility despite significant market fluctuations
• Absolute Return division expands its total volume to USD 1.5 billion
• Positive outlook for 2025, with continued investor demand for uncorrelated investment strategies
• Prime Capital has been managing Absolute Return strategies since 2007
Prime Capital AG (“Prime Capital”) announces the results in its Absolute Return segment for 2024. The asset manager based in Frankfurt, known for offering a range of fund of hedge fund products designed to deliver returns with minimal correlation to equity and credit markets, achieved in 2024 its most successful performance to date. The funds have demonstrated resilience and very strong uncorrelated performance in a year marked by increasingly uncertain economic indicators in most major economies.
PCAM Blue Chip Ltd, the fund of hedge funds focusing on large hedge funds generating their uncorrelated returns (=alpha) from their scale, generated a net return of +13.2% (USD share class) with a volatility of 2.4% and 0.0 equity beta, marking 2024 as its strongest year since 2009.
PCAM Select fund, which is complementary to PCAM Blue Chip, targets specialist hedge funds generating alpha from niche strategies, returned +7.4% net in USD in 2024. Returns were uncorrelated to markets and came with a volatility of 1.3% and an equity beta of 0.0.
“We thank all our clients and investors for their ongoing partnership and trust in us to manage their capital”, comments Tilo Wendorff, Head of Absolute Return. “We remain focused on delivering attractive, uncorrelated returns by diligently applying our time-tested processes in an ever-changing market environment and are optimistic about another successful year ahead of us. The search for the best managers, who are generally difficult to access, takes centre stage”, he adds.
“We are particularly pleased that we have been able to attract and retain the interest of so many different investor groups over the past few years, and accelerated in 2024”, says Andreas Kalusche, CEO at Prime Capital. “Currently more than 75 different investors across Europe, Middle East and North America trust our Absolute Return strategies and the experience of our growing team. For many years we have been convincing with a high absolute return and very low betas to the equity and other capital markets and thus offer ‘real’ diversification. With a large number of our investors we have also extended our relationship beyond our hedge fund offering and into our other business lines”, he concludes.
PCAM Blue Chip fund achieved impressive returns in 2024, with nearly all individual managers in the portfolio delivering returns in the double-digit percentage range. The year’s strongest gains came in the first and last quarters, with early outperformance benefiting particularly from equity and quantitative strategies, and later gains from market dislocations around the U.S. election.
Event-driven credit strategies capitalized on the U.S. regional banking crisis, as constrained refinancing options created attractive investment opportunities. Macro funds saw gains in the latter half of the year, leveraging shifting central bank policies, European election volatility, and emerging market interest rate movements. Meanwhile, fundamental equity strategies made strong contributions in 2024 on the back of a particularly favourable environment for stock picking, characterized by high single name dispersion. Quantitative strategies also excelled, with equity-driven returns dominating.
Multi-strategy managers were the largest positive contributors to the PCAM Blue Chip portfolio in 2024. These managers deploy capital across a diverse range of the strategies mentioned above and allocate investments among multiple specialized portfolio management teams. Their structural agility allowed them to dynamically adjust risk across sub-strategies, optimizing returns in a shifting market environment. Notably, managers adjusted exposure in event-driven strategies, reducing merger arbitrage risk while increasing allocations to equity capital markets and index rebalancing.
Investor Interest and Market Outlook
Prime Capital has observed broad investor interest in 2024, particularly from family offices and pension funds, who are seeking hedge fund investments with very low beta to equity markets. During the year, the team successfully grew assets under management in their strategies from USD 1.2 billion to over USD 1.5 billion. The outlook for 2025 remains positive, with continued investor demand for uncorrelated investment strategies while the equity market is generally considered to be highly valued.
On the investment side the portfolio is positioned for continued success given its diverse sources of alpha, coupled with agile risk management.
Strategic Initiatives and Future Plans
The Absolute Return team has completed several initiatives to further enhance efficiency in data collection and processing. With that Prime Capital continues to innovate and adapt to the evolving market landscape. New systems have been implemented to streamline more granular quantitative analysis, particularly in measuring alpha generation. Additionally, the team has had the highest number of manager interactions and has travelled more for research and due diligence globally than ever before. Continuous improvement is essential in the investment business, which is why Prime Capital is constantly looking for ways to improve its processes and methods.
About Prime Capital:
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Founded in 2006, Prime Capital AG is an independent asset management firm and financial services provider, owned by management and employees. The company takes a holistic, cross-divisional approach and specializes in Alternative Investments, in particular in Absolute Return, Energy Infrastructure, and Private Debt. Furthermore, the company provides Access Solutions for the access to Alternative Investments through securitizations and fund structures. Prime Capital currently employs about 120 people in Frankfurt and Luxembourg and is regulated by BaFin and CSSF.
As of December 2024, Prime Capital has approximately EUR 4.4bn Assets under Management as well as EUR 9.1bn Assets under Administration.
For additional information, quotes or requests please contact:
Prime Capital AG
Andreas Kalusche, CEO
Andreas.Kalusche@primecapital-ag.com
Questions regarding the content please contact Tilo Wendorff
Tel: 0049 69 9686 984 378
Tilo.Wendorff@primecapital-ag.com
www.primecapital-ag.com