GAM has launched a fund that will invest across all asset classes to exploit mispricing opportunities.
The GAM Star Tactical Opportunities fund will be run by the firm’s managed portfolios investment team, which is headed by former Wealth Manager cover star Graham Wainer.
It will seek long-term capital appreciation by allocating across equities, fixed income, currencies, and indirectly in property and commodities. It will also employ long and short derivative instruments, which could entail the use of leverage, as well as relative value pair trades.
Although nominally unconstrained, the fund will observe certain caps to its weightings. These include a maximum of 30% in sub-investment grade bonds, 20% in other funds, 20% in convertibles, and 20% in commodities. GAM clarified too that ‘most’ of the fixed income exposure will come from developed market issuers.
The investment team will base its tactical allocations on market sentiment, macroeconomic conditions and corporate earnings estimates.
GAM explained that the team ‘employs a process of fundamental analysis to identify the opportunities and mis-pricing which occur across equity, fixed income and currency markets around the world’, and confirmed that it would draw on ‘a range of external resources as well as the expertise and knowledge of other specialist investment managers within the GAM group’.
The fund has a base annual fee of 0.75% on the institutional share class and 1.5% on retail classes, with a 10% performance fee.