London-based Sabre Fund Management is finally close to launching its UCITS III-compliant fund, the Sabre All Weather Fund, having first announced the decision last May. The newcits will track Sabre’s two quantitative equity market neutral funds (Sabre Style Arbitrage Funds), both of which combine multi-factor models with statistical arbitrage and style rotation to generate target returns of 10 per cent to 15 per cent and volatility of 6 per cent to 7 per cent. Given the much greater level of information and paperwork needed to get an onshore Lux-domiciled UCITS up and running, obtaining approval from the Luxembourg authorities has taken time. “The launch has taken slightly longer than we expected, but this seems to be fairly standard,” Sabre’s managing principal, Mellisa Hill, told HedgeWeek. “We’re shooting to launch towards the end of January.” To that end, Sabre is now looking to ramp up its marketing initiative and is believed to already have a potential seed investor allocation of EUR20million to EUR30million. Upon deciding to roll out the UCITS fund, Sabre enlisted the services of Luxembourg Financial Group (LFG). “We decided to outsource the fund’s management company responsibilities, as required by Luxembourg law, to a third party and chose LFG,” confirmed Hill. “By doing so we delegated various regulatory requirements such as risk monitoring, central administration etc.”
The inaugural newcits will rank pari passu with Sabre’s offshore funds with respect to underlying investment strategy. Dan Jelicic, principal architect of Sabre’s Style Arbitrage strategy, will manage both the Cayman offshore funds and the UCITS with his four-man investment team. Commenting on the All Weather Fund’s marketing, Hill was quoted in the press as saying: “It is part of our strategic plan as a business to move to a more hybrid approach and build a multi product asset management company.” Hill told HedgeWeek that the fund’s aim is to generate a similar performance return to the offshore funds and that as far as fund capacity was concerned, it would be relatively small: about USD300million. “We aren’t able to confirm the launch size yet as we’re still in the process,” said Hill. Since they launched in 2002, Sabre’s Cayman Island funds (with the Anaxis Sabre Style Arbitrage Fund running a higher risk/return target) have generated compound annualised returns of 8.5 per cent and 14.2 per cent. Sabre manages a total of USD500million in the Style Arbitrage strategy.