Thames River Capital has raised an initial EUR 35 million for a European equity long/short fund, Thames River Tybourne Fund, launched on 30 June 2006.
The new Thames River Tybourne Fund raised EUR 35 million at launch with commitments for additional investments of approximately EUR 15m. Tybourne Fund is a European mid-cap equity long/short fund investing in UK and Continental European equities with market capitalisations of between EUR 500 million – EUR 3 billion, enabling investors to benefit from a strategy that has been managed as a sub-set of Thames River Capital’s mainstream European equities long/short fund, Thames River Kingsway Fund.
Chris Wright, Fund Manager of Tybourne Fund, said: ‘We are excited at the prospect of putting our investors’ capital to work. Since the peak of the market on May 10th, the mid-cap indices fell about 14% and many of the better stocks/companies, which had been hedge fund favourites, fell by about 30%. This is a similar magnitude to the crash of 1987 and the reasons are very similar – effectively to do with over gearing and a desire to protect capital once markets started falling.
‘If you had bought at or near the bottom in 1987 you would have made over 50% return in the next two years! Valuations on some stocks that are showing terrific business momentum are now c.20% lower than a month ago… that is a real and significant change in valuation parameters. Many companies are showing fantastic business momentum, very good value and the worst of the negative share price momentum is over with some shorter term indicators looking more positive. In addition, we anticipate a growing number of interesting shorting opportunities over the coming year.’
Since inception in March 2005 to 31 May 2006, Kingsway Fund’s mid-cap portfolio has produced an exceptionally high return per unit of risk taken with a gross return of +58.66 per cent in Euros, no down months and a conservative average net exposure of c. 35 per cent. Since inception in March 1999 to May 31 May 2006, Kingsway Fund has returned +223.17 per cent versus +31.07 per cent for the Eurotop 300 Index. This represents an annualised return of +17.56 per cent vs +3.8 per cent. Over one year to 31 May 2006, Kingsway Fund returned +24.06% versus +21.94% for the Eurotop Index with a maximum drawdown of -2.04% vs -4.33%.
Background note: Thames River Capital was established in 1998 and manages circa USD 8.8bn with 100 staff (at 31.05.06). Thames River Capital manages a range of UCITS III funds, long/short funds and multi manager hedge funds investing in European equities, Japanese equities, Emerging Market equities, Global Credit markets, OECD sovereign bonds, Property and external hedge funds.
