Fund Analytics Investment Management LLP (FAIM) has launched the FAIM European Conservative Fund, a multi-manager European equity hedge fund.
The new absolute return fund focuses on delivering consistent returns with low risk. The aim of the fund is to generate annual absolute returns of 10-12% with a low volatility of 4-6% and a low correlation to the European equity markets.
The fund is managed by Amir Sajjadi who has over 15 years experience in European equity markets. Prior to setting up Fund Analytics in October 2003, Sajjadi worked at GLG Partners in London, where he was responsible for risk analysis of the European equity long/short fund (EUR 1bn AUM) and the fund management of a European equity long/short book. In 1996, he joined Fidelity Investments in London, where he worked with senior institutional fund managers to develop bespoke portfolio solutions. Sajjadi's educational background is in theoretical physics with a PhD in superconductors from University College London.
FAIM was set up by Sajjadi in January 2006 to meet the needs of institutional clients that require consistent risk adjusted absolute returns. FAIM is being supported in this mission by Fund Analytics Limited, an independent consulting company that specialises in portfolio analysis, fund manager selection and risk management.
According to FAIM, the fund 'is managed using in-depth fund manager research and a state-of-the-art risk management system. The fund manager selection model used in the investment process is based on several critical factors that in combination create a unique profile of each fund manager. The model was extensively tested in the long only environment between 1999 and 2002 with impressive results before being applied to long/short strategies'.
Over 190 hedge funds in the European equity long/short category go through a monthly quantitative proprietary fund profiling process and receive a rating. Those with a buy rating are selected for the next stage of meeting hedge fund managers in order to understand their investment process and factors that could influence their future returns. Hedge funds that consistently outperform expectations are then short listed for investments in the fund.
The fund is continuously monitored through the FAIM risk management system, which allows the fund manager to have an insight into different aspects of the fund such as exposure to various segments of the market as well as to perform risk critical analysis including scenario analysis and stress testing.
The fund is a Euro class Cayman Islands registered open-ended segregated portfolio. Proforma returns between June 2002 and April 2006 show an annualised return of 12.92% with a volatility of 5.25%. Between February 2005 and April 2006 HSBC Fund Services independently monitored the performance of the fund. During this period the fund produced cumulative returns of 20.31%, placing it amongst the top performing funds within its peer group.