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hedgeweek hugh leask captioned.jpg Man GLG this week unveiled a new ESG-focused long/short global equities hedge fund strategy, which taps into the booming allocator demand for sustainable investing.

The USD32 billion long/short and long-only discretionary investing unit of Man Group will trade across regions and sectors, with the UCITS compliant fund building high-conviction longs in firms prioritising sustainability, while the short portfolio hedges market and factor risk.

Lead portfolio manager Rory Powe said the fund – which is classified as an Article 8 product under the EU’s Sustainable Finance Disclosures Regulation (SFDR) – will look to generate absolute returns in all market conditions.

Meanwhile, the recent surge in natural gas prices globally has boosted long-running US trend-following hedge fund Drury Capital. The firm’s flagship strategy, the Diversified Trend-Following Program, has generated a striking 30 per cent return so far this year on the back of the commodity price rebound and rising interest rates.

Founder and CEO Bernard Drury said every sector traded by strategy has proved profitable for the firm in 2021, with long bets in aluminium, natural gas, grains, copper, as well as equities indices and selected fixed income trades all yielding profits for the long-running strategy, which launched in 1997.

Elsewhere, high-net-worth investors in the southern US are pouring money into an assortment of niche credit strategies, Dallas-based investment advisor View Capital Advisors says.

US non-agency mortgages, US bank trust preferred securities, high-yield bonds, bank loans, emerging market debt, and structured credit are all finding favour among clients, View Capital managing director and CIO Ken Shoji told Hedgeweek.

View Capital – which advises on USD1.4 billion for a small group of multi-generational families based mainly in Texas and Louisiana, and certain international markets such as Mexico – currently makes its hedge fund allocations mainly through multi-strategy and multi-manager companies, such as Millennium Management, Point72, and Elliott Management.

The ongoing hedge fund renaissance among allocators is again underlined in new data published this week by BarclayHedge showing hedge fund managers raked in more than USD18 billion during July. Coupled with a USD7.3 billion trading profit for the month, total global industry assets have now mushroomed to a record USD4.4 trillion, as hedge funds posted a fifth consecutive month of positive investor inflows.

With equities and bonds showing greater correlation in recent months, yield-hungry allocators are understood to be turning to hedge funds and other alternative investments to help boost portfolio returns amid the shifting economic backdrop.

Ben Crawford, head of research at BarclayHedge, said: “Strong economic signals from the US, China and Europe, surging equity markets, increasing business activity and plummeting jobless figures all contributed to investors’ enthusiasm for hedge fund opportunities.”

Hugh Leask 
Editor, Hedgeweek


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