Halbis, the active management specialist of the HSBC Group, has announced plans to launch a leveraged version of its European Alpha Fund on December 3, with a new share class offering 2.5
Halbis, the active management specialist of the HSBC Group, has announced plans to launch a leveraged version of its European Alpha Fund on December 3, with a new share class offering 2.5 times the gross exposure of the existing fund.
The objective and investment policy of the Halbis European Alpha Fund otherwise remains unchanged as a long/short strategy designed to maintain beta neutrality, but Bill Maldonado, head of Halbis Alternative Investments, says client demand prompted the creation of a leveraged share class.
‘Our team’s track record substantiates their alpha generative skill – a Sharpe ratio of 1.88 coupled with correlation to European equities of a mere 0.04 since inception,’ he says. ‘A number of our investors asked us to amplify the return stream. We believe the levered class should enhance the return while bringing our expected volatility simply back in line with European averages.’
Launched by co-managers Vincent Bourgeois and Michael O’Mara in 2003, the Halbis European Alpha Fund is managed in an active, fundamentally-driven style with 40 to 60 positions and has a solid history of performance amid heightened volatility in the broader market, Halbis says. In August, for example, the team posted a positive net return of 1.20 per cent in the base euro share class.
Using the historic track record to simulate performance, the 2.5 times leverage share class would have had the potential to deliver net annualised returns of up to approximately 16 per cent, with volatility of 6.18 per cent, had it existed since the strategy’s launch. The fund, which is available in euro, yen and dollar share classes, currently has USD332.1m in assets under management and is expected to close to new investors early next year.
Halbis is an active investment manager focused on delivering sustainable value-added performance in selected areas of the global market, specialising in European equities, value-added fixed income, Asian and emerging markets equities and some alternative strategies. Halbis managed assets of USD94.3bn at the end of September, including USD1bn in hedge fund assets.
Halbis is part of HSBC’s group investment businesses, which comprises three separate investment management entities including HSBC Investments and Sinopia and which collectively managed assets of USD364.4bn at the end of September.
