29 Sep 2010
Martin Currie has announced that its three UCITS-III-compliant absolute-alpha funds have been launched and are available to retail and institutional investors.
The three strategies are Japan Absolute Alpha, European Absolute Alpha and Global Resources Absolute Alpha. All three are based on existing absolute-return funds and are managed by the same teams. They are Luxembourg-domiciled Sicav funds, with sterling, euro and dollar share classes, and daily pricing and dealing. The minimum investment for each fund is $10,000. The aim of the funds is to produce consistent returns along with a low degree of correlation to markets. Each fund will have a stockpicking approach and will seek to generate alpha on both the long and short book, while limiting drawdowns and containing volatility through active balance-sheet management and disciplined risk management. Their overriding aim is to protect capital as much as possible through a market downturn and then deliver returns when markets rise. As a rule of thumb, the objective is to absorb no more than one-third of market downturns but to capture two-thirds of market rallies.
Japan Absolute Alpha
This fund is managed by John-Paul Temperley and Keith Donaldson, supported by an experienced and deeply resourced team; together, they have some 89 years of investment experience. The fund invests in long and short Japanese equities, with gross exposure of +60 to +200% and net exposure ranging between -20 and +75%.The long portfolio holds between 25 and 50 stocks, with a normal position size of 2–4% and a maximum of 7%. The short portfolio holds between 25 and 50 stocks, with a normal position size of 2–3% and a maximum of 5%. All net yen exposure is hedged to eliminate the currency risk.
European Absolute Alpha
This fund is managed by Michael Browne and Steve Frost. Both joined Martin Currie in July, following the acquisition of the Sofaer Capital European long/short equity business. Michael and Steve have managed European equities together for over 20 years and have co-managed what is now the Martin Currie European Hedge Fund since 1 January 2001.
A European equity long/short fund with a mid-to-large-cap bias, this fund has a gross exposure of +50 to +200% and a net-exposure range of -30 to +100%. The long portfolio holds between 30 and 70 stocks, with a normal position size of 2–4% and a maximum of 9%. The short portfolio holds between 5 and 30 stocks, with a normal position size of 1–4% and a maximum of 6%.
Global Resources Absolute Alpha
Martin Currie has one of the most experienced and deeply resourced global resources teams in the business. The fund is managed by Chris Butler and Duncan Goodwin, who are supported by five further global-resources sector specialists. Chris has been at Martin Currie for 21 years and has managed the Martin Currie ARF – Global Resources Fund since launch in October 2003. Duncan joined the company in 2005 and became co-manager of the fund in the same year.
A global resources equity long/short fund with a multi-cap approach, the fund has a gross exposure of +60 to +200% and a net exposure range of -20 to +50%.The long portfolio holds between 10 and 40 stocks, with a normal position size of 3–4% and a maximum of 8%. The short portfolio holds between 5 and 35 stocks, with a normal position size of 2–3% and a maximum of 5%.
The three strategies are Japan Absolute Alpha, European Absolute Alpha and Global Resources Absolute Alpha. All three are based on existing absolute-return funds and are managed by the same teams. They are Luxembourg-domiciled Sicav funds, with sterling, euro and dollar share classes, and daily pricing and dealing. The minimum investment for each fund is $10,000. The aim of the funds is to produce consistent returns along with a low degree of correlation to markets. Each fund will have a stockpicking approach and will seek to generate alpha on both the long and short book, while limiting drawdowns and containing volatility through active balance-sheet management and disciplined risk management. Their overriding aim is to protect capital as much as possible through a market downturn and then deliver returns when markets rise. As a rule of thumb, the objective is to absorb no more than one-third of market downturns but to capture two-thirds of market rallies.
Japan Absolute Alpha
This fund is managed by John-Paul Temperley and Keith Donaldson, supported by an experienced and deeply resourced team; together, they have some 89 years of investment experience. The fund invests in long and short Japanese equities, with gross exposure of +60 to +200% and net exposure ranging between -20 and +75%.The long portfolio holds between 25 and 50 stocks, with a normal position size of 2–4% and a maximum of 7%. The short portfolio holds between 25 and 50 stocks, with a normal position size of 2–3% and a maximum of 5%. All net yen exposure is hedged to eliminate the currency risk.
European Absolute Alpha
This fund is managed by Michael Browne and Steve Frost. Both joined Martin Currie in July, following the acquisition of the Sofaer Capital European long/short equity business. Michael and Steve have managed European equities together for over 20 years and have co-managed what is now the Martin Currie European Hedge Fund since 1 January 2001.
A European equity long/short fund with a mid-to-large-cap bias, this fund has a gross exposure of +50 to +200% and a net-exposure range of -30 to +100%. The long portfolio holds between 30 and 70 stocks, with a normal position size of 2–4% and a maximum of 9%. The short portfolio holds between 5 and 30 stocks, with a normal position size of 1–4% and a maximum of 6%.
Global Resources Absolute Alpha
Martin Currie has one of the most experienced and deeply resourced global resources teams in the business. The fund is managed by Chris Butler and Duncan Goodwin, who are supported by five further global-resources sector specialists. Chris has been at Martin Currie for 21 years and has managed the Martin Currie ARF – Global Resources Fund since launch in October 2003. Duncan joined the company in 2005 and became co-manager of the fund in the same year.
A global resources equity long/short fund with a multi-cap approach, the fund has a gross exposure of +60 to +200% and a net exposure range of -20 to +50%.The long portfolio holds between 10 and 40 stocks, with a normal position size of 3–4% and a maximum of 8%. The short portfolio holds between 5 and 35 stocks, with a normal position size of 2–3% and a maximum of 5%.
Andy Sowerby, managing director for sales, marketing and client services at Martin Currie, said: ‘Meeting the needs of our client base, coupled with the developing regulatory agenda, has given us the momentum to translate our successful equity long/short range into funds compliant with the UCITS III regulations.
‘We have been managing absolute-return strategies for a diverse global client base for over 10 years and have invested heavily in the talent required to meet and exceed our clients’ performance goals.
‘The three strategies we are launching are run by fund managers who are highly experienced in long/short equities and who have proven long-term records. For example, had you invested in our Japan strategy at launch, you would have enjoyed an 84% return – against a market loss of over 40%.’
