James Williams, Hedgeweek

Global Macro still king says ML Capital in latest Barometer report… Standard Life Investments plans beefed up version of GARS fund…

Sun, 28/07/2013 - 17:45

Morgan Stanley this week launched a new UCITS fund giving investors exposure to Dalton Investment LLC’s Asia strategy. The MS Dalton Asia Pacific UCITS Fund is the latest UCITS fund to join Morgan Stanley’s FundLogic Alternatives plc umbrella. The fund invests across the Asia Pacific region using an equity long/short strategy. Longchamp Asset Management has been appointed as the sole distributor of the fund.

Stephane Berthet, Head of the FundLogic Alternatives platform, said: “We are excited to provide UCITS investors access to Dalton’s expertise in Asian equities. Dalton complements our existing offering by extending our coverage of the Asia Pacific Region.”
 
Dalton Investments LLC was established by James Rosenwald and is a recognised authority in Pacific Rim investing, with over 30 years of investment experience. It currently has over USD1.2billion in assets under management within Asia.Rosenwald commented: “The FundLogic Platform aligns with Dalton’s interests – providing a first class service with its stringent risk management and operational expertise. We are delighted by this opportunity to partner with Morgan Stanley, in launching the MS Dalton Asia Pacific UCITS Fund.”
 
David Armstrong, President and Founder of Longchamp Asset Management, added: “Dalton has an exceptional strength in the Asian markets. Their experienced, multi-cultural, on the-ground investment team gives them an edge in alpha generation.”
 
ML Capital Asset Management has released the 11th edition of its quarterly ML Capital Alternative UCITS Barometer. Three key findings in the report included: bullish sentiment on US long/short equities; bearish sentiment towards emerging markets; and global macro is still king. On US equities, the report found that 48 per cent of respondents are planning to increase their exposure to US long/short equities this quarter. In contrast, significant concerns among investors continue over economic woes in Europe, with only 30 per cent planning to increase their exposure. In the UK, that figure was just 13 per cent. ML Capital wrote that this might indicate an opportunistic time to launch products that combine the US and European themes: i.e. long US equities, short Europe equities.
 
The report noted that with respect to emerging market equity hedge strategies, the outlook was one of the lowest since the Barometer started in 2011. Currently, 30 per cent of respondents plan to increase their allocations next quarter. Reduced conviction in emerging markets could well be due to Chinese economic woes, which has made investors nervous. The report found that global macro-discretionary retains strong appeal among investors and maintains its positions as the most consistently popular strategy, with 48 per cent of respondents planning to increase exposure levels.
 
Commenting on the report, John Lowry, Founder and Co-CEO of ML Capital said: “Whilst the next few months should tell which direction the world is going – our results confirm that we may already be at a major point of change. While investors are very bullish on the outlook for the US Long/Short and Global Macro sectors, sentiment has turned negative towards two of the previously most popular strategies over the past three years – emerging markets equity and government bond funds.”
 
Latin American advisory and investment firm AFINA Holdings has signed an agreement with Luxembourg-based Alceda Fund Management to gain access to its UCITS platform reported Citywire Global this week. The partnership agreement will allow Philadelphia-based AFINA to hone in and select investment strategies that will appeal to its clients in Latin America. Michael Sanders, Chairman of the Board at Alceda Fund Management, was quoted as saying: “For many Latin American investors, their key investment concerns are the transparency of the manager and that manager’s investment strategy, liquidity and ease of access to their investments. We will work with AFINA to provide the right fund vehicle for Latin American strategies and distribute them to international investors.”
 
Standard Life Investments plans to launch a more aggressive version of its Global Absolute Return Strategies (GARS) fund by targeting a higher annualised return, reported moneymarketing.co.uk this week. The new version of the UCITS-compliant fund, the largest in the UK with approximately GBP17.8billion in AuM (EUR24.7billion across all share classes), will target returns of UK six-month Libor plus 750 basis points; the existing strategy targets 500 basis points over six-month Libor. The fund will be aimed squarely at the institutional market and has apparently been mulled over by SLI for at least the last 12 months. 
 
An analyst presentation in July 2012 noted that there is an opportunity for a higher return and higher volatility version of the strategy. The precise date for when this new version of GARS is not known, but a statement released by SLI said: “We currently have a number of projects in the pipeline and likely to launch, subject to regulatory approval, over the next couple of quarters.”   


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