GAM has launched the latest addition to its range of funds of hedge funds, GAM Multi-Diversified LV, which aims to deliver strong returns with low volatility and low beta over the longer t
GAM has launched the latest addition to its range of funds of hedge funds, GAM Multi-Diversified LV, which aims to deliver strong returns with low volatility and low beta over the longer term and is managed in the same style and underlying strategies as the firm’s flagship fund of funds, GAM Diversity, but with significantly less direct correlation to equities.
GAM Multi-Diversified LV will be managed by David Smith, chief investment director for GAM Multi-Manager, with support from the firm’s 119-strong multi-manager investment team. The fund is structured as an open-ended investment company domiciled in the British Virgin Islands, with a minimum subscription of GBP15,000, 25,000 US dollars, euros or Swiss francs, or JPY2.75m. Redemptions are available quarterly.
‘GAM Multi-Diversified LV will capitalise on demand for lower volatility multistrategy funds of hedge funds, especially among institutional investors,’ says Alex Shaw, head of UK institutional and northern Europe. ‘The product is also likely to be of interest to asset allocators and investors seeking to preserve capital during difficult equity market conditions.’
The fund will be managed according to GAM Multi-Manager’s investment process, with specialists organised into teams that develop detailed knowledge of the funds within each strategy universe and conduct deep manager research and due diligence into each potential investment.
Each hedge fund manager is evaluated and performance expectations set before construction of the portfolio. Risks are identified and managed at every stage of the investment process by an independent operational risk team.
Says Smith: ‘Whereas GAM Diversity has an approximately 50 per cent weighting to equity hedge and 25 per cent each to trading and arbitrage, Multi-Diversified LV will be weighted more strongly toward arbitrage, approximately 50 per cent, with a 25 per cent allocation to both equity hedge and trading, lowering both volatility and correlation to equities.’
Smith, who is responsible for GAM’s multi-strategy investments and co-manages several single-strategy portfolios, was head of investment research and management at Buck Consultants before he joined GAM in 1998. He joined Buck in 1992 from the actuarial investment consultancy division of a consulting firm.
GAM, which managed some CHF85.8bn of clients’ assets at the end of last year, was acquired by Julius Baer Holding in December 2005 from UBS, which had owned the asset manager since 1999.
