Tue, 27/11/2007 - 06:00
Old Mutual Asset Managers (UK) has announced that an additional USD190m of capacity is being made available in the Old Mutual UK Dynamic Equity Fund, which was launched in July 2005, soft closing immediately, and now has assets exceeding USD115m.
Since launch the fund has delivered annualised returns of 27.3 per cent with annualised volatility of 9.8 per cent, giving a Sharpe ratio of 2.2. It is managed by Luke Kerr, a member of Old Mutual's UK small and mid-cap team headed by Ashton Bradbury, which manages more than USD4bn in a range of long/short and long-only equity strategies.
Kerr also manages the top-performing Old Mutual (Dublin) UK Select Smaller Companies Fund, which has achieved a return of 409.8 per cent over the past five years, compared with 193.6 per cent for the Hoare Govett Smaller Companies (ex Investment Companies) Index over the same period.
The UK Dynamic Equity Fund aims to generate significant long-term absolute returns by investing in UK equities outside the FTSE 100 Index. The portfolio has a structurally long bias, combining a highly focused best ideas long book with selective short positions taken with the objective of enhancing returns, not for hedging purposes.
The fund is managed using a business cycle approach that combines top-down analysis with bottom-up stock selection. Macroeconomic analysis takes into account growth and interest rate expectations, enabling the manager to determine which areas of the market are expected to outperform or underperform.
Stock selection focuses on detailed company research, taking into account factors such as market positioning, exposure to the economic cycle, financial strength and quality of management.
For inclusion in the long book, companies should display one or more of three characteristics: having consistently above-average rates of profit growth, being likely to be subject to a positive earnings revision, or having the potential for a re-rating, while companies for inclusion in the short book must display the inverse characteristics.
'The Old Mutual UK Dynamic Equity Fund has delivered exceptional returns since launch in July 2005,' says the firm's managing director for fund distribution Matthew Nagele. 'It has been well supported by a broad range of investors and we are pleased to be able to offer additional capacity. Luke Kerr is a very talented manager and is supported by a highly respected investment team and I have every confidence that he will be able to continue to deliver superior returns going forward.'
The fund, which is domiciled in the Cayman Islands and listed on the Irish Stock Exchange, has a minimum investment threshold of 100,000 US dollars, pounds sterling or euros. The annual management fee is 1.5 per cent and the performance fee is 20 per cent. Gross exposure is typically between 60 and 130 per cent and net exposure typically ranges from 30 to 100 per cent. The prime broker is UBS.
Old Mutual Asset Managers (UK) is a specialist investment manager focused on high performance and absolute return products that acts as investment manager to a range of hedge funds, multi-asset funds, structured products, open-ended investment companies and other long-only funds. Its product range encompasses four areas of investment expertise, quantitative strategies, discretionary equities, multistrategy products and fixed interest.
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