European nations fund uses bottom-up approach to select liquid, large-cap stocks using the FTSE world europe benchmark
Thames River Capital has launched two new funds ' a long-only fund that invests in pan-European equities and a fund of distressed hedge funds.
The Thames River European Nations fund is a sub-fund of the Dublin-domiciled Thames River Traditional portfolio. It is benchmarked to the FTSE World Europe and has an initial charge of 5%. Commission is 3%, while management fees are 1.75%.
This fund was launched because of the new opportunities in Europe following the level playing field created by the development of the EU.
Stock market levels are currently reflecting the slower economic growth and lower corporate earnings that the world has experienced over the past few years. While Thames River is not expecting growth to soar away immediately, there are clear signs that financial risk premiums are falling, which indicate better times ahead.
The European economy is expected to be going through substantial change over the next few years. As the EU expands to include many of the Central European economies, there will be winners and losers. M&A activity will undoubtedly increase and will provide companies with the opportunity to improve shareholder returns.
Portfolio construction is based on a bottom-up stock picking approach and is focused towards well researched, liquid, large capitalisation stocks. The portfolio will include both growth and value stocks.
Risk controls used for the portfolio include a strong sell discipline that ensures holdings that become too large due to strong relative performance are trimmed. The 20 largest holdings will not exceed 50% of the portfolio. There will be around 100 stocks in the portfolio with the maximum weighting being around 5% and the average being around 1%.
Geographic weightings of major countries will be kept to 50% plus or minus benchmark weighting.
Meanwhile, the Thames River Distressed Focus fund will initially invest in four different distressed portfolios. These include two hedge style strategies as well as a multi-strategy with a passive focus and a multi-strategy with an active focus.
The balance of the portfolio will be invested in a number of special situations and/or start-up managers as well as established funds.
Thames River Capital has launched a distressed fund because the recession combined with the overhang of the excessive leverage of the late 1990s has created an abundant supply of distressed opportunities.
£300bn of liabilities
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