Omni Partners, the alternatives specialist set up by trading veteran Steve Clark in 2004, is preparing to launch its fourth product, Omni European ELS, to external investors.
Omni European ELS follows a low net European equity long/short strategy by pursuing opportunities in liquid large-cap equities in developed Europe identified via a dynamic valuation and factor process.
Omni European ELS is managed by Howard Spooner and Hugh Selby-Smith.
Spooner serves as chief investment officer and has more than 30 years of trading experience. He was most recently head of European equity trading at Barclays and previously spent time at UBS, Deutsche Bank and Goldman Sachs.
Selby-Smith is the portfolio manager of Omni European ELS and has spent nearly 15 years working in research roles across a variety of sectors on both the sell and buy side, at Dresdner Kleinwort, Goldman Sachs and most recently TT International.
Omni European ELS consists of three discrete portfolios: Base, Trading and Opportunistic. The base portfolio is constructed to be market and sector neutral. Stock selection for the base portfolio is initially driven by a fundamental factor screen and then narrowed via a discretionary portfolio construction process. This results in a limited number of positions (40 to 50 stocks) across a limited number of sectors (nine to 11). Positions within the base portfolio can be sized up or down in the trading book, which is where any desired market or sector exposure is expressed. The trading book is actively traded in an attempt to enhance returns, take market delta and manage overall risk. The opportunistic portfolio may include no more than three single-stock, sector-specific or thematic views at any given time.
Omni European ELS has been running as an internal managed account since January and has delivered an equivalent net return of +6 per cent year to date. Net exposure for the strategy is generally within +/-25 per cent of NAV.
Spooner says: “A shared philosophy about preservation of capital and strict risk management is what originally attracted me to Omni. Alongside this came the rare opportunity to join a firm where I was provided a blank sheet of paper to design my ideal product, from both a process and risk perspective. Omni is an environment where I am surrounded by individuals who are as passionate about equity markets as I am and where I can focus on generating compound returns.”
Selby-Smith says: “My preferred model of working has always been to partner with a trader who understands that risk is about sizing opportunities and that risk should serve as an enabler, a lesson that was ingrained in Howard and me during our time at Goldman Sachs. Omni European ELS seeks to marry a robust stock selection process with active trading; we believe that following a process-driven approach provides a repeatable framework for narrowing the investment universe to those stocks expected to outperform or underperform over time.”
