James Williams, Hedgeweek

UCITS attract EUR44billion in net inflows for February… two US managers join Alceda UCITS Platform…

This week Alceda Fund Management SA announced that two US fund managers had joined the Alceda UCITS Platform (AUP). The two managers in question are Miller/Howard Investments, a New York-based equities specialist and Clark Capital Management Group, a Philadelphia-based investment firm.

Miller/Howard has been focusing on high-quality, income-producing equities since 1991 and has allowed the firm to grow to over USD5.3billion in AuM. Commenting on the decision to join the Alceda platform Lowell Miller, President and CIO, said: “Today we’re excited about being able to offer our strategy in a UCITS format for international investors. Given the uncertain economic world, we’re confident that international investors will appreciate our long track record and will view this strategy, in a UCITS vehicle, as a welcome investment alternative. We chose Alceda for their independent leading position, Luxembourg domicile, and access to global distribution.”

Harry Clark, Chairman and CEO of Clark Capital Management Group
, commented that with fixed income investors are faced with a challenge given that interest rates remain near record lows and that they may benefit from a “tactical fixed income approach that seeks to capitalise on opportunities to deliver higher yield while attempting to control the risk associated with today’s interest rate environment. We have found this strategy to be successful in the United States,” said Clark, adding that the firm was thrilled to partner with Alceda to take the strategy global.

Michael Sanders, Chairman of Alceda
said: “We are seeing an increasing demand from the US for Luxembourg-domiciled structuring solutions as US managers look to extend their investor base into Europe, Asia and Latin America, by offering investment solutions in a UCITS format.We are delighted to welcome Miller/Howard and Clark Capital, two well established and experienced US fund managers, to the Alceda UCITS Platform. These new additions are further testament to the growing recognition of our structuring expertise and distribution capabilities.”

Paris-based quantitative asset manager TOBAM this week announced that it had launched its existing Anti-Benchmark Canadian Equity strategy in a UCITS IV fund format
with seeding from a major Canadian institutional investor.

The fund seeks to maximise
diversification across the investment universe, as represented by the S&P/TSX Composite Equity index, by applying TOBAM’s patented Maximum Diversification approach, bypassing sector, country and style biases that more traditional allocation methods such as market-cap weighting indices can lead to.

The fund aims to outperform the S&P/TSX equity cap-weighted benchmark by 4-6 per cent per annum over a market cycle, while at the same time delivering significantly less volatility. It will mirror the Anti-Benchmark Canada equity strategy that TOBAM has run since April 2011. As of end Q1 2013 the Anti-Benchmark Canada Equity strategy has returned +13.7 per cent since inception, outperforming the index (-5.6 per cent) by close to 10 per cent on an annualized basis.

Christophe Roehri, Head of Business Development with TOBAM
, commented: “TOBAM has been working extensively with leading Canadian institutional investors who are invested in the Anti-Benchmark strategy for global and emerging market equities. We have launched this fund in response to demand from both Canadian clients seeking an alternative to investing in their domestic market cap-weighted index, and international clients seeking to improve the efficiency of their exposure to Canadian equities, often invested passively.”

“The Anti-Benchmark approach makes particular sense in the Canadian market, as it allocates across risk factors and expands – meaningfully - the amount of diversification captured compared to a traditional index,” added
Yves Choueifaty, President of TOBAM.

In its latest quarterly European research on alternative UCITS Geneva-based Alix Capital has revealed that total assets in this space advanced by 11.6 per cent in Q1 2013
to EUR154billion. That’s an impressive 28.9 per cent increase on the same period last year. Total assets managed in UCITS absolute return strategies now account for more than 30 per cent of all assets managed in absolute return strategies in Europe, including hedge funds.

The latest research shows that equity long/short funds delivered the best performance in Q1, gaining 3.05 per cent, followed by CTAs up 2.28 per cent. Fund of funds also posted encouraging returns of 2.25 per cent.

The best performing single manager last quarter was the CTA DUNN WMA Fund, up 20.68 per cent, followed by the ML Pegasus UCITS Fund, up 18.68 per cent and the Jupiter International Financials Fund, up 15.54 per cent. The largest UCITS platform, with 18 funds, is the Morgan Stanley FundLogic Alternatives platform, while Deutsche Bank’s DB Platinum platform is the largest from an AuM perspective.

Commenting on the Q1 results Louis Zanolin, CEO of Alix Capital, said:
“The requirement for regulated and tax efficient vehicles coupled to the uncertainties about the final draft of the AIFM Directive are pushing more and more funds to choose the UCITS framework for their absolute return funds. The portion of UCITS funds versus non-UCITS will therefore continue to increase in the coming years.”

Finally, UCITS funds continued to attract strong net inflows of EUR44billion in February this year
, according to the latest investment fund industry fact sheet published by the European Fund and Asset Management Association (EFAMA). Although slightly down on the EUR49billion in net inflows recorded for January, this is still an encouraging sign of continued investor interest.

Net sales of equity funds were EUR14billion compared to EUR21billion in January, while bond funds attracted net inflows of EUR13billion (down from EUR20billion in January). Total assets of UCITS rose 2.4 per cent month-on-month at the end of February to EUR6.547trillion. Combined with EUR2.595trillion in non-UCITS, total net assets of the European investment fund industry now stand at EUR9.142trillion. 

Commenting on the latest figures,
Bernard Delbecque, Director of Economics and Research at EFAMA, said:“Improvements in financial markets continued to boost investor sentiment in February which contributed to strong net inflows into UCITS and pushed net assets of European investment funds above the EUR9trillion mark for the first time.”

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