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Schroders to launch US long/short equity fund
by Matthew Goodburn on Jan 28, 2013 at 10:14
Schroders will launch a US long/short equity fund on its Ucits investment platform GAIA next month.
The fund, Schroder GAIA Sirios US Equity, will be managed by Boston-based boutique Sirios Capital Partners and headed up by the firm's co-founder and managing director John Brennan (pictured).
Brennan told our sister publication Citywire Global that the fund would invest predominantly in US mid and large caps with potential exposure to Asia and Europe, but also had the flexibility to invest in fixed income under its Ucits remit.
The new fund will replicate the portfolio of the US boutique's existing Sirios US equity long/short hedge fund, and will be the third externally-managed fund on the GAIA (Global Alternative Investor Access) platform following funds launched for multi-strategy boutique CQS and Egerton Capital in the past three years.
He feels the timing of the launch, which will take place on 27 February, is fortuitous as the market is showing strong signs of returning to a focus on stock fundamentals and lower correlations between stocks.
He told said: 'After the crisis of 2008/9 a lot of long/short funds had a hard time because the dispersion in valuations was so narrow but since the last quarter of 2011 there has been a gradual return to focus on company fundamentals which is when a long short strategy can excel.'
'In an environment of a moderate economic recovery and low interest rates we are starting to gain traction with bets in autos and housing stocks. Our three biggest long overweights are to financials, consumer stocks and tech and telecom stocks.'
In terms of the short book, Brennan said many of the bets were in banks which had unsustainable margins, selective US education and luxury goods stocks, as well as telco and tech stocks dealing with legacy issues as the world moved towards more digital and mobile technology.
The Schroder GAIA platform was launched in November 2009, and has a total of $1.53 billion in assets. Along with the two externally managed funds, Schroder GAIA CQS Credit and Schroder GAIA Egerton Equity , the platform also has two internally managed funds,Schroder GAIA QEP Global Absolute and Schroder GAIA Global Macro Bond .
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