Absolute Return Partners to launch inaugural UCITS
London-based independent fund manager, Absolute Return Partners, is due to make its debut in the UCITS space with the launch of its ARP Global Equity Alpha Fund in the next four or five weeks. The announcement is significant on two fronts – being ARP’s first ever equity product as well as its first ever UCITS-III fund. The Dublin-domiciled fund is currently awaiting approval by the Irish regulator. ARP, who currently have USD300 million in AUM, specialise in non-correlated alternative investment strategies with a particular penchant for niche markets. To date, ARP has only made its investment strategy (devised by Peter Anderson, ex-CEO Stockrate AM with ARP providing the volatility overlay) available to two family offices, but strong portfolio performance over the last five years has convinced ARP that they should open it to a wider audience. Anderson uses a fundamental approach to select 50 companies, globally, from a pool of 100,000 company reports, and crucially ignores earnings forecasts and valuations, as well as dispensing with sell-side research and company visits; it is this approach that ARP hopes will set it apart from its competitors. The UCITS fund portfolio will be re-balanced every June, with stock changes restricted to 15 – 20 per cent of the total. In terms of investment performance the portfolio is up 17.5 per cent since June this year, relative to 11.6 per cent for the MSCI World Index. Transparency, liquidity and generating alpha will be the three key themes of the fund. According to ARP’s marketing collateral, the fund will be long 80 per cent equity and long 20 per cent volatility instruments. Speaking to Hedgeweek, ARP Partner Nick Rees said: “We’re very excited about the launch. We’re currently holding talks with a number of large institutions interested in investing north of EUR100 million. Initially the fund will be EUR25 million but I’ll be disappointed if we haven’t reached EUR100 million within twelve months.” BNY Mellon will be custodian, with Capita Financial acting as the fund’s administrator. Ernst and Young will audit, with Matheson Ormsby & Prentice providing legal counsel.
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