Forward Management has launched the Forward Endurance Fund (FENIX), an equity mutual fund that seeks growth and positive absolute returns by investing both long and short in companies affected by disruptive technologies.
The fund invests with a strategy similar to that employed by the Forward Endurance limited partnership launched in March of 2011. The fund focuses on transformative, global growth opportunities, identifying what Foward believes to be ‘winners’ and ‘losers’ across a variety of industry sectors. Currently, these sectors include: technologies across mobile, Internet and cloud computing; energy and related areas such as clean tech and energy efficiency; and international emerging markets. The fund is authorised to invest in publicly traded equities globally, including initial public offerings (IPOs).
Portfolio manager for the fund is David Readerman, CFA, a 28-year industry veteran who has been immersed in the worlds of equity research, investment banking, and venture funding since the early days of Microsoft and Apple. He is supported by a dedicated senior analyst and draws on the resources of other specialised Forward portfolio teams in areas such as infrastructure and small-cap equity as he identifies and researches investment themes.
"Globalisation has dramatically compressed the time period between introduction and mass adoption of new technologies. Moreover, this process of technology adoption appears to be occurring independent of macroeconomic events," says Readerman. "What’s often overlooked is that this process not only creates enterprise value, but also destroys it, so change is expressed in both long and short investment opportunities. During the dot-com run-up between 1998 and 2000, most investors missed the opportunity in business models that were superseded by others and simply went away."
The Endurance team’s investment process blends deep, fundamental analysis of companies, including face-to-face meetings with management, with modelling of product performance and stock valuation. In researching trends, analysing stocks, and seeking access to IPOs, the team draws on Readerman’s extensive network of contacts in the venture capital and investment banking communities.
The Endurance fund launch advances the continuing expansion of Forward’s alternative fund lineup. Over the past three years Forward has built a set of 16 alternative mutual funds, separate account strategies and private funds representing more than USD3.1 billion out of Forward’s total of USD5.1 billion in assets under management (as of 31 December, 2011). Under the heading of "alternative," Forward includes products that either provide exposure to alternative asset classes, such as real estate, commodities, and frontier markets, or apply alternative techniques, such as hedging and long/short investing, to equity and fixed-income strategies. Forward ranked among the top 20 US asset managers in terms of alternative asset flows between 1 January and 30 November, 2011, according to Strategic Insight.
"Many of Forward’s alternative funds are designed to help investors dampen volatility, cope with high correlations, and find new income sources in a low-yield environment. With its focus on transformational technology trends, the Endurance fund reminds us that growth opportunities still abound in this era of accelerating global change," says J Alan Reid, Jr (pictured), CEO of Forward. "The fund’s long/short strategy lets investors take advantage of those opportunities while keeping a lid on volatility."
Readerman joined Forward after a seven-year tenure at Marsico Capital Management, where he was a senior investment analyst with research responsibilities in global equity portfolios spanning technology, energy, consumer, and industrial sectors. He was previously a founding partner with Thomas Weisel Partners Group, Inc, and earlier led the software and Internet teams at Montgomery Securities. His twenty years of sell-side experience included stints with Shearson Lehman Hutton and Smith Barney. He is a Chartered Financial Analyst and holds an MBA in Finance from New York University’s Leonard N Stern School of Business. He is a member of the San Francisco Society of Security Analysts.