Multi-asset fund manager Fulcrum seizes on “fertile” market environment with two new hedge fund launches

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Fulcrum Asset Management, the USD4.4 billion London-based multi-asset manager, is preparing to launch two new hedge fund strategies – an equity diversifier fund and a market neutral offering.

The two funds, Fulcrum Equity Dispersion and Fulcrum Thematic Equity Market Neutral, are existing strategies carved out of the firm’s Diversified Absolute Return Fund.

Fulcrum Equity Dispersion will launch as a separate fund after three years within the DAR strategy, having generated strong performance during volatile periods.

The strategy – which rolls out with USD110 million on 31 July, managed by Stephen Crewe – is positioned as a portfolio diversifier, with positive carry characteristics and long volatility exposure to large cap global equity. During its three years, it has had a correlation of around 10 per cent to equity and zero to fixed income.

Meanwhile, the USD120 million Fulcrum Equity Market Neutral Fund, which is managed by Fawaz Chaudhry, will begin trading on 3 August, according to an announcement by the firm.

The beta-neutral fund is built around 20-30, long-term global themes, with exposure managed to create minimal stock-specific or factor risk. The strategy has had a 15 per cent correlation to global equities in the two years it has run in the DAR fund.

Each strategy is launched as a standalone fund following growing investor demand, said Fulcrum co-founder and CEO Andrew Stevens.

The Diversified Absolute Return Fund, from which the new two strategies are launched, generated a 6.7 per cent gain during March’s turmoil, as other hedge fund strategies faltered.

“The current and future market environment will be fertile for these strategies,” Stevens added.

Established in 2004 with a multi-layered investment approach, Fulcrum’s funds span macroeconomic trading strategies, thematic equity investing, CTAs, carry investing, short volatility, behavioural finance and alternative risk premia, with more than USD4 billion managed across a range of discretionary, systematic and alternative funds.

In an interview with Hedgeweek earlier this year, Suhail Shaikh, partner and CIO at Fulcrum, explained how the firm has tended to shun the traditional 50/50 equity/bond balanced return portfolio, instead positioning itself with a 0.2 to 0.25 beta sensitivity to stocks for a more diversified, non-correlated trading approach.