Pictet has launched a market neutral European equity long/short fund for its total return team.
The Pictet Total Return Agora fund invests with a long/short approach that is intended to be market neutral. It targets long-term capital growth in absolute terms, with a focus on capital preservation, and with a mandate spanning European equities.
It will be managed by Elif Aktuğ and Benoît Capiod, alumni of Goldman Sachs and Lansdowne Partners respectively, alongside Vincent Ijaouane.
The fund managers aim to identify catalysts, including corporate restructurings and M&A activity, that will have an impact on the share prices of European large-cap companies. The fund will invest in approximately 35 core investment strategies, each expressed through a combination of long and short positions.
The team also runs a similar strategy domiciled in the Cayman Islands, which has returned 15.5% since inception in March 2012 with 5.2% volatility and a Sharpe ratio of 1.19.
'In our view, a long/short equity fund is the best way for investors to capitalise on the multiple opportunities arising in the areas of restructuring and M&A,' argued Aktuğ.
'We believe the availability and cost of financing, the strength of European corporate balance sheets, the search for non-organic sources of growth and the growing stability of the economic environment, all point to a continued pick-up in M&A activity.'
On the current market environment, the managers recently commented: ‘We continue to remain supportive of the European recovery and restructuring stories, and expect the recent weakening of the euro versus the dollar to provide a boost to the European economy if it maintains its current downward trend.
‘However, we remain wary of the fact that European equities seem to be still impacted by changes in investors’ top-down view on sectors and are driven mostly by positioning, a trend we have witnessed since the end of March.’
The fund’s management fee is 1.1%, with a 20% performance fee.