Charlemagne Capital, the London-based specialist emerging markets equity investment management group, predicts that Russian equity success stories are likely to be domestic economy oriente
Charlemagne Capital, the London-based specialist emerging markets equity investment management group, predicts that Russian equity success stories are likely to be domestic economy oriented in 2007.
Charlemagne’s OCCO Eastern European Fund (the Fund), a hedge fund investing in Eastern European equities, has increased its Russian gross exposure to 103%, a record high for the Fund, representing 59% of total gross exposure.
Andrew Wiles, Portfolio Adviser to the Fund commented: “Current market conditions lend themselves very well to our bottom up investment process with markets seemingly more valuation conscious. This supports our confidence in increasing risk levels in the Fund via an increase in gross exposure as opposed to adjusted net market exposure. We continue to see major inefficiencies across Eastern Europe and Russia providing the opportunity for generating alpha.”
Chralemagne stated: “The Fund returned 8.17% in 2007 to end of March versus the Eurekahedge Eastern Europe and Russia Hedge Fund Index which was up 6.48% over the same period (with volatilit y of more than twice that of the Fund). The Fund was up 3.27% in February despite a fall in markets over the month, demonstrating that its stock picking alpha strategy is capable of generating strong returns in down markets. Annualised returns are 16.4% with volatility of circa 8% since launch in 2002. The Fund is currently open to new investors and will close again once it reaches its targeted capacity.”
“The Fund’s star performer in March on the long side was Wimm Bill Dann, a leading producer of dairy and juice products in Russia and the CIS, whose shares rose by 26.2% following well received 2006 financial results. IMSG, the Russian based London-listed advertising company also enjoyed an 18.8% rally in its share price. Both have contributed to the Fund’s recent impressive performance. The short book also generated alpha with average performance below that of respective country indices, all via stock specific shorts.”
Charlemagne Capital’s OCCO funds all employ a long / short equity strategy, investing across global emerging markets with a bottom up value approach and aim to produce consistent absolute and risk-adjusted performance by exploiting inefficiencies in the markets through both long and short positions.
The funds are managed with a maximum standard deviation of 12% per annum. The OCCO Eastern European Fund is non-directional in contrast to most emerging markets hedge funds which tend to have a long bias. The OCCO Eastern European Fund was the first hedge fund which Charlemagne Capital launched in December 2001.
