BlackRock has launched the BlackRock Strategic Funds (BSF) UK Emerging Companies Absolute Return Fund (the Fund), a long-short equity strategy focussing on opportunities created by emerging companies.
These include small, mid and large capitalisation companies that are at the early stage of their life cycle and/or expected to experience significant growth. The fund also has the remit to invest in international companies, increasing its addressable market.
The fund expands BlackRock’s High Conviction Alpha suite of active equity funds, which provides absolute return exposures to clients seeking pure alpha returns with low correlation to market indexes. This range forms part of the four suites that comprise BlackRock’s Active Equities platform: Systematic Alpha, High Conviction, Specialised Outcomes and Thematics.
The fund is managed by Dan Whitestone, who is supported by portfolio manager Nick Little and the wider UK team. The fund uses a bottom-up, fundamentally-driven investment process, focused on evaluating companies’ real underlying earnings power and identifying emerging structural changes within industries. Ultimately, the managers focus on owning truly differentiated companies that can either disrupt industries and/or are exposed to long-term secular trends, that triumph over macro or economic cycles. The fund seeks to deliver attractive returns with limited correlation to global equity and bond markets.
Dan Whitestone, Lead Portfolio Manager of the BSF UK Emerging Companies Absolute Return Fund, says: “With over 1,600 companies in the UK and over 10,000 globally, there is a wide universe within developed equity markets from which we look to find emerging companies. In the BlackRock UK Emerging Companies Absolute Return Fund, we focus on finding businesses with long runways of growth ahead and analysing industries where change is occurring globally. In doing so, we look to uncover investment opportunities created by the disrupters and combine them in a portfolio which seeks to deliver positive absolute returns irrespective of market conditions.”
Jeremy Roberts (pictured), Head of UK Retail at BlackRock, adds: “The speed of industry change is faster than ever, creating dynamic opportunities for an experienced manager, with a proven philosophy and process, to capitalise on. These new waves of disruption can mean success for businesses but also threaten other business models and industry profit pools. We are at a point in the cycle where absolute returns are an increasingly critical part of an investors’ portfolio and this is a Fund where stock and industry specific outcomes can offer a source of uncorrelated alpha for clients.”
