Jupiter Asset Management is to launch a Ucits III fund for investors seeking to capture returns from investing in pan-European equities.
The Jupiter European Absolute Return Sicav, which launches in January, will seek to generate an absolute return independent of market conditions.
In seeking to meet the objective, the manager will aim to limit volatility.
The fund, a sub-fund of the Luxembourg-domiciled Jupiter Global Fund, will be managed by two of Jupiter’s European fund managers – Cédric de Fonclare (pictured) and Stephen Pearson.
This marks the first time that the long/short investment capabilities of Pearson will be made available to investors in a regulated environment and combines his expertise with the long-only skills of de Fonclare.
The managers’ investment process will be based upon fundamental bottom up stock-picking. Capitalising on their own experience of pan-European equity investing, using longstanding relationships with company managements and local brokerages, and exploiting the broader Jupiter infrastructure, they will look to build a portfolio of 50 to 80 long and short positions in individual companies in the European markets.
Directional exposure to the equity markets will be more a function of decisions taken on individual companies rather than top down positioning based on macro economic views. Any residual unintended market or sector risk will be hedged using index derivatives or sector swaps.
The fund will use limited leverage, have daily liquidity and make use of the wider investment powers allowed under Ucits III, for example using exchange-traded futures and options for investment and risk management purposes. In these respects it will retain many of the advantages and flexibility of a hedge fund structure, but offer the additional benefits of daily dealing and a strong regulatory environment, making it more accessible to a wider universe of investors.
A performance fee is payable on the Euro B class of shares which will be subject to a high water mark and be payable only when the fund outperforms its benchmark (Euribor 3 month).
De Fonclare says: “Europe is an exciting place to invest with diverse local and regional trends and variations. It is also home to large number of multi-national and global corporations. We think this variety makes for an ideal universe in which to run a Fund that can take advantage of both success and failure at the company level."
