Specialist emerging markets manager Argo Group has announced plans to launch the Argo Multi-Strategy Fund, a diversified multi-asset class portfolio that will enable investors to participa
Specialist emerging markets manager Argo Group has announced plans to launch the Argo Multi-Strategy Fund, a diversified multi-asset class portfolio that will enable investors to participate in all Argo’s funds as well as capitalise on its best ideas through direct investments.
Argo MSF, which will launch on August 1, aims to offer investors risk-adjusted returns exceeding 10 per cent per annum with a volatility of less than 5 per cent. It will invest the majority of its assets in Argo’s portfolio of proprietary funds, including the Argo Global Special Situations Fund and the Argo Fund, both of which have annualised double-digit returns on a risk-adjusted basis since launch.
The fund will also be able to invest in the closed-ended AIM-listed Argo Real Estate Opportunities Fund and Argo’s private equity funds. To offer investors further diversification and greater exposure to the firm’s best ideas, Argo MSF has the added flexibility to invest directly in specific trades sourced by the investment team.
With the current market environment giving rise to new investment opportunities, Argo expects to launch a range of new funds in the near future focusing on sovereign and corporate debt, relative value, foreign exchange and interest rates, as well as in the stressed and distressed credit space. Argo MSF will be able to invest in all the new fund launches.
‘Given the heightened levels of volatility across asset classes and the dislocation created by the credit crunch, giving investors access to a flexible allocation strategy is extremely beneficial,’ says Argo Capital Management chief investment officer Andreas Rialas.
‘Argo MSF will allow the investment team swiftly to allocate and reallocate capital tactically and strategically, allowing the portfolio to capitalise on opportunities as they arise. The portfolio is a logical addition given Argo’s multistrategy investment focus and provides the ideal platform to capture our best investment ideas. It also removes the allocation dilemma our investors sometimes face when selecting funds from the Argo stable.’
Argo MSF is structured as an umbrella fund domiciled in the Cayman Islands and will have share classes denominated in euros and US dollars. The minimum investment is USD100,000 or EUR100,000 with quarterly redemption subject to 120 days notice. Management fees are 2 per cent of net asset value per annum and the performance fee is 20 per cent of net realised gains subject to meeting a hurdle rate. Fees will be waived on assets invested in underlying Argo funds to avoid duplication of fees.
Formed in 2000, Argo is an independent alternative investment management company offering a multi-strategy investment platform in global emerging markets. It was acquired by Absolute Capital Management in January 2007, but shareholders in the combined group, headed by Andreas Rialas and his brother Kyriakos, approved a demerger of the two businesses last month.
According to the firm, Argo is a fundamental value investor that aims to deliver low volatility, double-digit absolute returns by utilising an array of strategies including fixed income relative value, special situations, local currencies and rates, private equity, real estate, high yield corporate credit and distressed debt. The firm currently manages four funds with assets under management exceeding USD1bn.
The Argo Fund, launched in October 2000, is a long/short emerging market debt fund that principally invests in sovereign and corporate bonds in both hard and local currencies, and makes opportunistic investments in special situations and distressed debt.
The Argo Global Special Situations Fund, launched in August 2004, follows a similar strategy to the Argo Fund but has greater flexibility in its use of instruments and products and participates in more illiquid situations. It invests in financial instruments including convertible debt, equity, senior and subordinated loans, bonds, guarantees, credit default swaps and options to extract absolute returns from stressed/distressed and deep value situations.
The company also manages the Argo Capital Partners Fund, a private equity fund currently closed to new investment, and plans to expand its private equity platform with the launch of new funds in the near future. Argo Capital Management Property, an affiliated company, manages the Argo Real Estate Opportunities Fund.
Argo’s investment team is headed by Andreas Rialas with investment oversight carried out by a five-member investment committee comprising Andreas and Kyriakos Rialas, Stephen Rothwell, Nathan Chua and Demetris Efstathiou, supported by an investment team based in the UK, Cyprus, Singapore, Brazil and Argentina.
