Context Asset Management has launched the Context Macro Opportunities Fund, which seeks to deliver long-term, risk-adjusted returns with low correlations to the financial markets and is part of Context’s drive to ‘democratise’ hedge fund strategies by offering them in alternative mutual funds.
"As alternative investment products continue to rise in popularity and investors brace for the upcoming interest-rate increase, we are dedicated to rolling out innovative strategies that bring the potential benefits of alternative mutual funds, including low correlation to traditional asset classes, higher-quality return streams and lower volatility, to a wider audience of retail and institutional investors," says John Culbertson (pictured), Managing Director and Chief Investment Officer of Context. "The Context Macro Opportunities Fund demonstrates how we democratise sophisticated hedge fund strategies by enabling the overall investment community to access them through alternative mutual funds managed by proven, experienced and knowledgeable Subadvisers."
The Fund seeks to obtain total returns with low correlation to the broad financial markets by using arbitrage and alternative investment strategies, such as break-even inflation trading, hedged mortgage-backed securities trading, capital structure arbitrage, volatility spread trading and opportunistic investing. The Fund may invest in a broad range of debt securities and derivative instruments from issuers in the U.S. and other countries, including emerging markets, to meet its goal, as well as equity securities and equity-linked derivatives. It has the flexibility to hold long and short positions across all of its asset classes, and to invest in securities of all issuers regardless of market capitalisation or industry.
The Fund's Subadviser, First Principles Capital Management, LLC (FPCM), is responsible for the day-to-day management of the portfolio, and is subject to the general oversight of Context Advisers II, LP, which serves as Investment Adviser. New York-based FPCM is a Registered Investment Adviser with a team of more than 40 professionals and USD10 billion in assets under management as of 30 June, 2015. FPCM is a wholly-owned subsidiary of American International Group, Inc. (AIG).
FPCM was founded in 2003 and its team possesses expertise spanning the global fixed-income securities and derivatives markets. The firm evaluates prospective investments by comparing their relative return potential to their expected risks, including drawdown risk and possible volatility. FPCM also considers broad economic and market factors, technical data, and proprietary research and analysis when making decisions about prospective investments.
"First Principles Capital Management's strategy draws on a wide variety of criteria to identify promising opportunities for investors seeking positive risk-adjusted returns over the long term," says Andrew Wert, Managing Director, Investments at Context. "The firm's thorough approach is the driving force behind its track record as a successful institutional manager, and makes it an ideal partner for us as we prepare for the next wave of investor allocations to alternative mutual funds."
"Context shares our belief that effective managers must possess expertise across many areas in order to determine an investment's relative value," says Mark G Alexandridis, Chief Investment Officer at FPCM, who is the lead portfolio manager for the Fund. "We look forward to working with Context to create the ideal combination of arbitrage and alternative strategies to pursue long-term, risk-managed returns."
The Fund's Portfolio Managers include Lead Portfolio Manager, Mr. Alexandridis, who is in charge of corporate credit-related assets in the portfolio; David Ho, Managing Director of Asset Management at FPCM, who oversees the portfolio's U.S. rates and municipal assets; Prasad Kadiyala, Managing Director of Asset Management at FPCM, who is responsible for corporate credit and derivatives strategies; and Mattan Horowitz, Vice President of Asset Management at FPCM, who is responsible for the Fund's mortgage assets.