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Edinburgh’s SVM says long/short funds buck downward trend in 2008

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Edinburgh-based independent fund management group SVM Asset Management has reported that the its Highlander long/short fund has returned 18.1 per cent over the first 10 months of 2008 and

Edinburgh-based independent fund management group SVM Asset Management has reported that the its Highlander long/short fund has returned 18.1 per cent over the first 10 months of 2008 and has achieved an annualised return of 14.6 per cent since launch.

The SVM Highlander Fund is a EUR30m pan-European focused long/short fund employing a variable bias strategy, with an emphasis on stock alpha on both the long and short sides. The fund employs a fundamental research-driven investment approach and draws on the stock selection skills of SVM’s entire investment team.

SVM Asset Management managing director Colin McLean, who has 15 years experience in managing long/short portfolios, is the lead manager. He says: ‘During the month, we maintained a net short position of around 25 per cent, so were not overly exposed to general market movement.

‘Our long positions focused mainly on defensive sectors such as pharmaceuticals and tobacco stocks. The short side of the portfolio mainly comprised stocks in capital goods, consumer services, technology and property.

‘This performance has been achieved against a backdrop of extreme market volatility and is a testament to the rigorous risk control and stock selection processes that we apply to our investments.’

So far this year the SVM Saltire Fund, a long/short fund co-managed by McLean and Margaret Lawson that focuses principally on UK mid- and small cap equities, has achieved a return of 17.9 per cent. Like Highlander, the fund’s emphasis is on long and short stock alpha generation and is also variably biased.

Founded in 1990, SVM Asset Management is a privately-owned boutique investment manager specialising in UK and European equities and multi-asset fund of funds. The firm manages assets for both retail and institutional clients in investment trusts, pension funds, open-ended investment companies and hedge funds.

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