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FundLogic Alternatives to grow equity sector-focused managers throughout 2011

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Since being launched last August, FundLogic Alternatives plc, the dedicated UCITS III-compliant hedge fund platform run by Morgan Stanley in parallel with its Fund

Since being launched last August, FundLogic Alternatives plc, the dedicated UCITS III-compliant hedge fund platform run by Morgan Stanley in parallel with its FundLogic Platform, has hit the ground running. Following the onboarding of two funds in September (Psam, Indus), and the addition of the Algebris Global Financials sector-specific newcits last week, a further two funds, Indus PacifiChoice Asia Fund and Alkeon UCITS Fund, are due to join. In terms of AUM, this equates to USD150million and as David Armstrong, Managing Director and Global Head of Fund-linked business at Morgan Stanley, told Hedgeweek via phone interview: “Currently, the platform has a pipeline of 10 managers. We feel the market is very good and expect to have about 20 managers on board (including existing ones) by year-end. It’ll take time for each fund to reach a decent size but we think an AUM of USD2billion by year-end will be achievable.” Strategically, the platform is keen to develop its stable of equity managers across different sectors: Algebris, with its focus on global financial services, being the latest example. “We will be looking at other equity l/s managers in the technology, healthcare and real estate sectors,” said Armstrong.

What characterises FundLogic Alternatives is both its commitment to equity l/s strategies and a slight bias towards US managers, many of who are now responding to the advantages of running a newcits fund. “We think the market is responsive, there’s a lot of demand in the UCITS space to accommodate more US managers, although we will have some European managers as well,” said Armstrong. A few CTA products, in addition to equity-focused products, would also be added to the platform this year. The reason for the bias towards equity managers was, said Armstrong, twofold: “Firstly, Morgan Stanley is a real leader in the equity space. Secondly, equity strategies can be easily crossed over into UCITS.” Identifying the right managers is, in Armstrong’s view, easier in the US because its hedge fund industry is that much more evolved. Nevertheless, in addition to supporting US equity l/s managers, Armstrong confirmed that he was in discussions with a few potential Asia-based managers: “We haven’t signed any Asian managers (although Indus and Algebris both have Asia offices) but we’re looking into it and we expect to see more propositions.”
 

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