Man Group’s GLG Partners is to launch the GLG European Equity Alternative (the fund), a UCITS version of its successful GLG European long-short strategy.
Managed by Pierre Lagrange (pictured), partner and co-founder of GLG, Simon Savage, a specialist in active risk management, and Darren Hodges, an expert in options trading, the Fund for the first time offers retail investors access to the team behind the GLG European Long-Short strategy, which has a track record since 2000.
The GLG European Long-Short (ELS) strategy combines two key objectives. The first objective is aiming to deliver sustainable capital growth. Emphasising stock selection both on the long and short side, Pierre and Simon allocate capital to an internal team of specialist book managers – encompassing a wide range of investment styles and sector/regional expertise – via a risk budgeting allocation process. The second objective is to protect capital through effective risk management. In addition to independently monitored risk constraints, Simon works in partnership with the underlying book managers to ensure alignment of risk usage with investment conviction and mandate objectives. Leverage and market exposure is determined by Pierre and Simon at fund level, who ensure the Fund is genuinely market neutral by limiting mandate exposure to +/- 5% at all times.
While each book is run autonomously, the ethos behind the strategy is that the whole is greater than the sum of its parts and book managers actively share information and ideas. This philosophy, places a premium on understanding all factors driving a stock’s movements, not only the fundamentals affecting a company, an approach which can adapt to continuously evolving market conditions.
Lagrange says: “The mixed outlook for recovery in Europe offers multiple opportunities for this strategy and we are pleased to be able to offer it more widely. Equity long-short can confer greater alpha, lower market beta and more consistent returns than traditional long-only disciplines. However, manager selection is also key and this is where GLG excels. Based on allocation to multiple underlying managers, who cover a wide variety of sectors and regions, the fund captures the culture of expertise and collaboration which makes GLG unique. With someone as experienced as Simon overseeing risk, the overall strategy meets the dual objective of capital growth and capital protection.”
Savage says: “We see effective risk management as being an essential component of delivering an absolute return mandate. This isn’t only done through balancing risk and return in the market, but also looking at human behavioural risk. We view fund management as a skilled activity and as such work hard at understanding the strengths and weaknesses of our decision making. This focus on improving self-awareness keeps up performance over time, as our decade-long record has proven. We look forward to delivering strong, risk-adjusted, market neutral returns to an even wider range of investors.”
The fund will be the 10th absolute return UCITS fund launched by GLG since July 2009 and will complement its existing strategies offering exposure to the UK, Europe and Emerging Markets.
Richard Phillips, Head of UK Retail at Man, says: “Demand has been strong for a UCITS version of this strategy. This is the first time that retail investors will be able to access the skills of Pierre, Simon and the underlying European team and we look forward to adding the fund to our expanding range of absolute return UCITS funds.”
The fund will be a sub-fund of GLG Investments VI plc, incorporated in Ireland and authorised by the Central Bank of Ireland for listing on the Irish Stock Exchange.
