Man GLG, the discretionary investing unit of London-listed global alternative investment giant Man Group, has launched a new sustainability-focused long/short equity hedge fund which will trade across regions and sectors with a positive ESG bias.
The Man GLG RI Global Sustainable Growth Alternative UCITS strategy – which is classified as an Article 8 product under the EU’s Sustainable Finance Disclosures Regulation (SFDR) – is targeting absolute returns. It takes a positive ESG bias in global markets, combining a high-conviction long portfolio of 25-45 stocks with a short book designed to hedge market and factor risk. The short portfolio also aims to boost the alpha generation of the long positions.
“In a changing world, we believe the strongest companies will prioritise sustainability, and that customers, talent and shareholders will gravitate to sustainable businesses,” said lead portfolio manager Rory Powe, who currently manages over USD3 billion in European equities, and co-manages Man GLG’s existing global, long-only RI Global Sustainable Growth fund with co-portfolio manager Virginia Nordback.
Powe will run the strategy alongside co-PMs Nordback and Ikitsa Anastasov, and a team of four analysts. The group will tap into Man Group’s broader ESG expertise, taking positions in firms that prioritise sustainability and have a positive impact according to the UN’s Sustainable Development Goals.
“This fund will seek to invest in the best of these companies, wherever they are in the world, leveraging Man Group’s broader ESG expertise, and combined with a short portfolio designed to underpin the fund’s ambition to generate returns in all market conditions,” Powe added.
The long portfolio is split between core positions – long-term investments in the world’s strongest companies with leading ESG companies – and second tier stocks.
The core names will represent 60-100 per cent of the long portfolio and is made up of those companies that meet all five of the team’s investment criteria: formidable competitive leadership and purpose led culture; resilient and growing revenues; robust profitability; attractive cash flow characteristics; and full reporting on greenhouse gas emissions.
The second tier – comprising up to 40 per cent of the long portfolio – includes firms that are on track to improve their sustainability credentials and meet the criteria within five years.
Meanwhile, the short book aims to curb factor risk and reduce drawdown risk, targeting bottom-up single stock shorts, while leaving the idiosyncratic and ESG bias of the long portfolio unhedged.
Established in 1995, later becoming part of Man Group in 2010, Man GLG today manages USD32 billion in assets across various long/short and long-only strategies.
Man Group – a global alpha-focused investment group which runs a broad range of discretionary and quantitative strategies in traditional and alternative sectors, and often seen as a bellwether for the UK hedge fund industry – has more than USD135 billion in assets under management.