Sagitta Asset Management has launched a long/short US hedge fund, the Mariner fund, run by former J...
Sagitta Asset Management has launched a long/short US hedge fund, the Mariner fund, run by former Jupiter fund manager Eduardo Tomacelli.
Tomacelli said: "On the long side I trade the strongest shares in the strongest sectors. If there is a definite direction in markets, as there was last year, I will hold positions for extended periods of time.
"Clearly this year has been different. As soon as there is any inflection point in the market I generally go completely to cash, or trade short-term movements."
The fund was set up in early 1999 at the request of a single client. It has been run on an exclusive basis until recently when the decision was taken to open it to a wider market. The fund was up 54.09% last year net of fees, and from launch to the end of May 2000 is up 27.43% net of fees. The fund focuses on US stocks, from the very largest down to the $500m-$1bn market cap range.
Tomacelli said: "We tend to stick to the larger stocks in practice because there is more liquidity there."
The overall risk profile of the fund is conservative, Tomacelli said. "I aim for 2% per month, which compounded comes to 28% pa. Last year, I made that amount by July and spent the rest of the year trading and effectively just defending those gains."
The fund has never used leverage, and according to Tomacelli is only likely to on an intra-day basis.
He said: "I have not been more than 73% net long at any one time. As a tilted non-leveraged equity fund the range tends to be between 75% long and 100% cash."
Before joining Jupiter Tomacelli ran hedge fund portfolios for Jacob Rothschild. Prior to that he ran money at Mercury from 1985 to 1994.
The long-only fund focuses particularly on the mid-cap area in the US, looking most at companies below the $250bn market capitalisation level.
The charging structure for the Mariner fund is 1% pa with a 20% performance fee.
Goldman Sachs is the fund's prime broker and administrator.
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