The F&C Group is to launch a UCITS III fund which will bring together its scale and 143-year pedigree in emerging market investments with the absolute return expertise of Thames River, the boutique asset manager acquired by F&C in 2010.
The Thames River Global Emerging Markets Absolute Return Fund ("the Fund") will have daily liquidity, access to the full range of UCITS III investment powers and will contain a mix of long and short positions.
The Fund, which is planned to launch on 1 June, will be managed by Kristof Bulkai and Hugo Rogers, co-managers of the award winning* Thames River Water & Agriculture Absolute Return Fund and Thames River Isis Fund, a global emerging markets long/short fund. Bulkai and Rogers will join the F&C Emerging Equities team led by Jeff Chowdhry. They will leverage the research and resources of the existing 11 strong team which manage $5.6 billion of Emerging and Asia ex Japan equity assets (at 31/12/10).
Bulkai joined Thames River in 2009 and has managed the Thames River Water & Agriculture Absolute Return Fund since launch. Prior to this Bulkai was a portfolio manager specialising in emerging markets at Griffin Capital, where he delivered low-volatility mid-teen returns with no negative years from 2003 to 2008. Rogers joined Thames River in 2009 from Copenhagen Capital, where he was a senior analyst, and has also worked as an analyst at Odey Asset Management. Following its launch in March 2009, the Thames River Water & Agriculture Absolute Return Fund has consistently succeeded in meeting its twin targets of mid-teen returns with single digit volatility. Bulkai and Rogers generated a 12.8% return with annualised volatility of 6% from March to December in 2009, in addition to a 13.4% return with an annualised volatility of 7.6% in 2010 (for the US dollar share class. The sterling share class generated at 13.5% return with annualised volatility of 7.55% in 2010).
The Thames River Global Emerging Markets Absolute Return Fund will target annual returns in the high teens net of fees, aiming to protect capital in tough market conditions. Starting with a top-down macro view to drive the core investment ideas, the managers will adopt a value-driven approach to long and short stock selection, and will run an active short book with strict risk controls.
Each position in the Fund is expected to stand on its own merits, based on particular investment fundamentals. In rising markets, the managers expect both long and short stocks to make positive contributions to returns. In falling markets, their aim is for any negative performance from long positions to be offset by the short and hedged positions.
Lead manager Kristof Bulkai said: "In the past decade the rising tide in emerging markets has lifted all boats. But there is an increasing divergence in performance between sectors, which makes an absolute return approach more appropriate going forward. But while many supposedly ‘absolute return' funds oscillate between being fully invested in equities and having a high cash weighting, this Fund will be as active on the short side as it is in its long portfolio. That approach has enabled us to make a positive return on the Water & Agriculture Absolute Return Fund over the last 2 years in spite of the challenging market backdrop."
Jeff Chowdhry, Head of Emerging Equities at F&C, commented: "We are delighted that Kristof and Hugo are joining the team which has recently been strengthened by the addition of Mike Sell from Nevsky Capital. Emerging equities is part of F&C's DNA and the build-out of our product set into the absolute return space is a landmark development."
Note: The Thames River Global Emerging Markets Absolute Return Fund will be structured as a sub fund of Traditional Funds plc, a Dublin-domiciled OEIC, with shares listed on the Irish Stock Exchange. The Fund will offer accumulation shares denominated in US dollars, euro, sterling and Norwegian krone, and a sterling-denominated distribution share class. The minimum investment is £/$/€10,000 or NOK100,000. The Fund will have an annual management charge of 1.75%, with a 15% performance fee for performance in excess of LIBOR + 2%, with a high water mark.
Hugo Rogers, co-manager of the Fund, will provide more details on the investment strategy at a press briefing at 10am on Wednesday 18th May at F&C Investments, Exchange House, Primrose Street, London EC2A 2NY. To register to attend please contact the F&C press office.
|
