Aberdeen Asset Management has launched the Aberdeen Alternative Diversified Equity Fund (AADE) which aims to generate capital appreciation with limited correlation to traditional equity markets by blending a portfolio of equity-related alternative strategies.
The fund offers investors access to high quality alternative investment talent in a liquid and regulated vehicle.
With its focus on generating returns through stock selection rather than market exposure, AADE is designed to provide a source of equity-related returns that are not dependent on the overall direction of the equity markets. This style of investment is becoming more popular among investors concerned about the current levels of equity and fixed income markets and the potential for more correlation between asset classes in the future.
The fund was seeded by a German institutional investor.
The fund’s launch follows on from the launch of the USD502 million Aberdeen Alternative Strategies Fund (AASF) in August 2015. Both funds are domiciled in Dublin.
Historically the most compelling opportunities in alternative investments were only available through less liquid, lightly regulated, offshore investment vehicles that are inaccessible to many investors. But funds such as AADE and AASF provide investors with daily liquidity through a UCITS regulated investment structure, making it far more accessible to a wider range of investors.
The Aberdeen hedge funds team has constructed the portfolio with a select pool of high quality alternative investment managers running dedicated mandates within the fund. This approach allows the team to access a broader array of investment management talent than can be found solely within the existing universe of alternative UCITS strategies. It also provides increased control and transparency over the assets, leading to more granular risk analysis and investor liquidity.
Led by Russell Barlow, the 25-strong team has been researching and investing in hedge fund and liquid alternative strategies for clients for over 20 years and manage around USD10 billion of assets.
The minimum investment into the fund is USD1 million and the annual management fee is 0.6 per cent.
Barlow says: “Finding ways to generate good returns with limited exposure to broad market movements has become a priority for many investors. Political and economic uncertainty has been causing notable market turbulence; and the risks look to be increasing rather than decreasing. The Aberdeen Alternative Diversified Equity Fund blends together some of our highest conviction alternative strategies, focused on managers employing an equity market neutral style of investing. We have been able to allocate to a range of managers that are otherwise unavailable within the alternative UCITS space.”
