Group's long/short smaller companies portfolio will open for investment on 1 November
Gartmore is to open its internally managed UK smaller companies long/short portfolio for investment on 1 November.
The fund, which has been managed by Gervais Williams and Rob Giles in-house since May, already has some $42m in seed money but the group is looking to raise an additional $50m before hard closing the fund.
Martin Phipps, Gartmore's head of hedge funds, said the portfolio is currently invested in 110 positions and uses a bottom-up analysis in its stock selection. The managers adopt a mixture of longer-term, earnings-oriented and shorter-term tactical positions to take advantage of factors that will influence a firm in the short term, Phipps said. No one stock will occupy more than 10% of fund assets.
The portfolio is currently fairly evenly balanced between long and short positions.
It invests in quoted firms valued at up to £1bn but does not take positions in any unlisted companies, according to Phipps.
Investors in the fund will be charged 1.5% a year and there will be a 20% performance fee with a high water mark.
Although Gartmore has yet to decide where to list the fund, it is expected to be Cayman Islands-domiciled.
Williams manages four Gartmore retail long-only funds, with combined assets under management of around £370m, including the UK long/short small-cap fund which is his first entry into hedge fund management.
The group recruited Giles from private client management at Singer and Friedlander in the first quarter of 2002 to assist Williams. Gartmore is also seeking a Cayman Islands domicile and Dublin listing for its global convertible arbitrage fund, to be managed by Billy Schatten and launched by year's end.
Schatten will build a convertible arbitrage team for the fund through external appointments, Phipps said.
The fund will aim to exploit both volatility in convertible bonds and credit spreads and Gartmore's convertible arbitrage team will have access to the group's wider fixed income analysis team, he added. Gartmore boosted its fixed income research capabilities by hiring Karl Bergqwist in August as head of credit research. Bergqwist worked with Moody's and was at Barclays Global Investors as head of credit investment process before joining Gartmore.
At the start of August, Gartmore appointed Simon Surtees, previously with BNP and HSBC bank, and Alok Basu, formerly at Barclays Capital and Merrill Lynch, to its credit research team.
On 10 September, Nationwide Financial Services, Gartmore's parent company, bought US-based Coda Capital Management, a convertible bond manager that oversees $400m, for an undisclosed amount.
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From 6 April 2019