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Project 750: SLI's plan for a high-octane Gars

Project 750: SLI's plan for a high-octane Gars

Wealth Manager can reveal Standard Life Investments is set to launch a more aggressive version of its giant Global Absolute Return Strategies (Gars) fund with an annualised target return of 750 basis points.  

It is understood the fund will be named Project 750 and will launch at the end of summer, with the departure of multi-asset investment head Euan Munro to Aviva Investors not impacting the schedule. 

SLI is believed to have been running a model portfolio for a number of months to test how the strategy will stand up in a range of market conditions.  

While the asset manager would not comment on the precise nature of the product, it indicated it was looking at launching a number of new strategies.  

‘Standard Life Investments has a broad innovation agenda across all asset classes and is continually carrying out research and product development targeted at meeting a wide range of client needs,' a spokesperson said.

‘We currently have a number of projects in the pipeline and [are] likely to launch, subject to regulatory approval, over the next couple of quarters. There are no delays to our current programme.’

Gars has been one of the biggest success stories in UK fund management history.

The strategy was originally created by Munro to help Standard Life manage its pension liabilities and its success in doing so prompted the group to repackage the vehicle as an investment fund, which launched in May 2008.

As it gathered momentum investors flocked to the strategy, which has become the UK’s biggest fund with a massive £18 billion in assets under management.

While this has raised concern about liquidity in some quarters, performance has been impressive.

According to Lipper, in the five years to the end of June the fund has returned 49.2% versus a 7% rise in Libor GBP three months and an average fund return of 30.7% in the Citywire Alternative Ucits GBP RFS UK: Multi Strategy sector.

It also holds its own on key risk measures with a maximum drawdown of 6.3% and a standard deviation of 1.74.  Both metrics rank it the best in the peer group.

Moreover, these returns have held steady despite SLI’s 32-strong multi-asset team undergoing some upheaval over the last 12 months.

Last autumn Richard Batty, David Jubb and David Miller quit the firm to set up a multi-asset arm at Invesco Perpetual.

This was followed by last week’s news that Munro had agreed to become chief executive of Aviva Investors. SLI moved swiftly to appoint Citywire A-rated Guy Stern - who joined the firm in 2008 - as its new MAI head.

In a conference call yesterday Stern said SLI was reviewing its staff incentivisation scheme following Munro’s departure. He also believes the multi-asset investing team is more than equipped to deal with the exit.

'We have a very deep bench,’ he said.   

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8/11 in Alternative UCITS - Multi Strategy (Performance over 3 years) Average Total Return: 19.71%
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