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View the article online at http://citywire.co.uk/wealth-manager/article/a751225

GLG in double Europe and emerging markets fund launch

by Robert St George on May 20, 2014 at 10:26

GLG in double Europe and emerging markets fund launch

GLG has launched a leveraged European equity fund and an emerging markets macro strategy.

The GLG European Alpha Alternative Enhanced fund will offer 200% exposure to the existing £570 million GLG European Alpha strategy, a long/short market neutral portfolio of European equities.

Managed by Philippe Isvy and Pierre Valade, the strategy builds a portfolio of typically 100 high conviction positions based on valuation anomalies and expressed through pair trades.

As an example of a recent such trade, the managers went short Danone and long France’s CAC index on the basis that Danone has outperformed for the past decade but now faces several specific challenges including higher milk costs and an elevated valuation.

Over the past 10 years the European Alpha Alternative strategy has returned 111% compared with 84% from the MSCI Europe index. According to a GLG simulation, the enhanced version would have returned 233% through the same period.

The new fund is targeting annualised returns above 10% with a volatility range of 6-8%, and it will have an annual management charge of up to 2% with a 20% performance fee.

The group has also unveiled the GLG Global Emerging Markets Macro Alternative fund, which will take a multi-asset approach to emerging markets. It will invest across equities, bonds, commodities and currencies through long and short directional, arbitrage, relative value, carry and volatility trades.

The fund will be managed by Kumaran Damodaran, a 13-year veteran in emerging-market investing. It will also have an annual management charge of up to 2% with a 20% performance fee.

The launch follows the closure of two of Damodaran’s other funds, Emerging Markets Currency & Fixed Income Alternative in January and Emerging Markets Diversified Alternative last month. Both had fallen below £15 million of assets under management.

According to Citywire data, Emerging Markets Diversified Alternative had lost 19.7% over the past three years compared with an average loss of 2.1% from its Citywire Alternative Ucits Emerging Market Equity including Asia category.

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  • Pierre Valade
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