Brian BollenThis week has seen a series of new fund launches by specialist investment managers to take advantage of opportunities in long-term trends including Uberisation of the economy.
Candriam Investors Group announced the launch of a new Digital Long Short Equity strategy. This strategy has been designed to invest in companies benefiting from the digital evolution of the economy by tapping into the growth potential of innovative companies and shorting disrupted companies, it says.
New thematic strategy
Candriam is a European multi-specialist asset manager owned by New York Life Investment Management (NYLIM). It describes this Digital Long Short strategy as the latest addition to its range of thematic strategies which already include demography, biotechnology and robotics. Thematic strategies allow investors to capitalise on long-term socio-economic trends, identifying losers as well as winners.
The new fund's investment mandate enables it to invest in digital champions over the long term and short companies which rely on legacy technology and have a negative profit momentum. It also implements opportunistic pair trades, a market-neutral strategy which takes no directional market risk. Stocks are selected from a worldwide equity universe, resulting in a high conviction portfolio with a maximum of 50 companies selected.
“The digital evolution of the economy is affecting all sectors and is pushing legacy firms to choose between transformation and economic death”, says César Zeitouni (pictured below), in charge of the new strategy. “Digital technologies are no longer confined to the technology sector, but are redefining sectors from banking, to retail, to automotive. In the current economy, we believe there is an “Airbnb” hidden in all sectors.
Uberisation of the economy
- technological innovation is happening at a speed that has never been observed before
- the first wave of disruptive technology from 2000 to 2015 saw the proliferation of high-tech devices such as smart phones and PCs
- in the current phase we are witnessing the Uberisation of the economy
Man goes long short standalone
Another long short strategy comes courtesy of Man GLG, the discretionary investment management business of Man Group. It plans to launch its UK Absolute Value Strategy on a standalone basis in June. Run as part of the Man GLG Alpha Select Fund for over two and a half years, it is lead managed by Jack Barrat. The strategy will focus on the mid-cap segment of the UK equity market.
It aims to return around 10% per annum by utilising the data and process behind the Man GLG Undervalued Assets Fund and Man GLG UK Income Fund. Jack Barrat says: “Our work on the UK market naturally identifies companies that we believed to be overvalued, further to the undervalued opportunities we look for. Our analysis shows that pockets of the UK market are expensive and the wide valuation dispersion in the midcap space is offering a compelling opportunity.”
Credit for Eaton Vance
On the same day Eaton Vance Management (International) announced the launch of Eaton Vance International (Ireland) Global High Yield Bond Fund. The Fund invests in US and non-US fixed income securities, primarily in high yield below “investment grade” corporate bonds. This investable universe includes secured and unsecured bonds, bank loans, convertible debt, and preferred stock.
The Fund’s investment strategy aims to
- avoid regional biases
- leverage intensive credit research to help identify investment opportunities
- capitalise on arbitrage opportunities created by an increasing number of multiple currency issuers
This is particularly important today as geographic, economic and political conditions are creating an environment where investors are seeking investmentswhich can offer risk-adjusted returns that are better than traditional equity and bond markets, and have a high diversification potential.
PineBridge launches in European credit
Also focussed on credit is the PineBridge European Secured Credit Fund, co-managed by Julie Bothamley, Portfolio Manager, Evangeline Lim, Portfolio Manager and Steven Oh, Global Head of Credit and Fixed Income.
The investment objective is to provide investors with income returns and capital preservation from a diversified portfolio of European sub-investment grade debt obligations issued by corporations in various industries and geographical regions. It will invest in primarily Senior Secured Obligations.
PineBridge Investments notes that its leveraged loans team has a European presence dating back to 2006 and extensive knowledge of both US and European issuer pools. Senior secured debt, particularly bank loans, carries a higher recovery rate and ranks at the top of the capital structure, it observes.
The Fund
- allows investors to benefit from wider spreads and shorter durations
- will be domiciled and regulated in Luxembourg
- is registered in 17 countries across Europe