Cazenove Capital's alternative fund range is to be boosted by the arrival of a new hedge fund, the Cazenove UK Dynamic Absolute Return Fund, on 1 June.
The fund, which will be managed by Neil Pegrum, will follow a more aggressive long/short approach and is likely to have a higher risk/return profile than the company's core hedge funds, which follow a business cycle approach.
Pegrum has delivered significant performance in managing special situations and concentrated long portfolios during his 15 years' investment experience. Despite being a pragmatic investor in identifying undervalued stocks, he has tended to tilt towards small to mid-cap positions. It is Cazenove Capital's intention to hard close the new fund for six months following the first dealing date.
Cazenove Capital Management Limited launched its first UK Absolute Return Fund, managed by Tim Russell, in October 2003, quickly followed by the European Equity Absolute Return Fund, managed by Chris Rice and Steve Cordell. Since then assets have since grown significantly with those funds achieving growth of GBP 282m and EUR 66m respectively.
The UK Absolute Return Fund, which has been soft closed since October 2004, will reopen to new investors on 2 May, before soft closing again until October 2005. The fund has achieved annualised returns of 13.9 per cent coupled with low volatility against the FT-SE All Share index, resulting in a Sharpe ratio of 3.9.
"Our initial strategy in 2003, to offer genuine asset diversifying funds in the UK and Europe, has been vindicated in the main by achieving consistent monthly returns alongside low volatility," says Robin Minter-Kemp, Cazenove's head of institutional marketing. "The money inflows have been extensive. Neil Pegrum's valuable addition to the team enables us to offer a more 'dynamic' UK long/short fund. He has achieved formidable recognition in identifying underrated stocks and successfully executing price target trades."
Background notes: Cazenove Capital Management Limited provides specialist investment management and high quality advice, centred on excellence in UK and European equities and fixed income to professional advisers, institutions, charities and private individuals. The company is a wholly owned subsidiary of Cazenove Group Limited.