Man has announced the launch of a new UCITS III long/short equity fund, Man Long/Short Europe. The fund will be managed by Man’s long/short equity team led by Robin Lowe, and offers investors access to a number of leading offshore European long/short equity managers in a UCITS III compliant format for the first time.

Man Long/Short Europe is a fund of funds with a focused portfolio of between 8 and 12 managers. A rigorous due diligence process comprising top down and bottom up research is employed to ensure that only the highest calibre managers are selected. Managers are selected from the full European long/short universe of over 300 funds, as opposed to the far smaller UCITS III universe. This offers investors access to a broader range of offshore European long/short funds and offers a combination of balanced, active and thematic investment approaches.

Mark Chambers, Head of Sales Management Europe, comments: “As one of the largest investors in hedge funds globally through our USD14bn multi-manager business, Man has long-standing relationships across the entire hedge fund community. This means that we are uniquely placed in terms of bringing forward top long/short talent in Europe, offering investors access to a breadth of funds which would be unavailable in the UCITS III universe alone.”

According to Robin Lowe, Head of Equities at Man’s Multi-Manager business, the current outlook for European equity markets remains uncertain. ”While there is broadly negative economic data, an unclear outlook for corporate profits and the threat of disinflation, we’re also seeing increasing M&A activity, strong corporate balance sheets and moderate valuations, which offer interesting opportunities. While long-only managers can suffer in this environment, long short managers can capture dispersion in sideways markets, participate significantly in equity upside and protect on the downside through short-selling and active portfolio and risk management.”

“While the appetite for equity-like returns remains, investors have been left questioning the equity risk premium,” comments Mark Chambers. “With equity long/short investors can have the best of both worlds, with high participation in equity rallies and increased insulation when markets decline, generating better risk adjusted returns over a full cycle.”

The Man Long/Short Europe portfolio is constructed using these three styles, combining the risk/return characteristics of each to create a robust return stream. “By including different investment approaches within the European long/short universe, we are able to capture alpha wherever it occurs throughout market cycles,” adds Robin Lowe, “But you need a highly experienced team of alternative investment experts to effectively navigate the opportunities this space provides.”