Momentum has launched a fund of hedge funds focusing on technology investing. The Meteor fund aims t...
Momentum has launched a fund of hedge funds focusing on technology investing.
The Meteor fund aims to profit from global technology and communications.
Michael Goldman, managing director of Momentum, said: "The fund will be more aggressive in approach than our Allweather range and will be diversified, covering a number of geographical regions, sectors and styles.
"We are not in the habit of setting up high-volatility vehicles, but this has been launched in response to demand from investors."
In regional terms, there will be exposure to the US, Europe, Asia and to emerging markets such as North Africa and the Middle East.
"Unlike other funds that concentrate on US tech stocks only, we will take a global approach. Emerging markets have produced and continue to produce many gems that operate as privately-run businesses which are as yet unknown to institutional investors in the major markets. This global diversification provides significant upside potential and removes the need to allocate across a number of region-specific funds," Goldman said.
Sub-sectors within the overall remit will include electronics, information processing, telecoms, entertainment and biotech. The strategies used include equity long/short as well as opportunistic trading and private equity investing, aiming to profit from investment in IPO and pre-IPO stage companies. There will be a merger arbitrage equity trading component, as well as pairs trading.
According to Goldman, an important element of the fund is its ability to offer dynamic portfolio protection as a result of a multi-strategy approach to trading. Most unit trusts and mutual funds are unable to short the market.
He said: "As well as being able to short individual stocks, the fund can also short market indices such as the Nasdaq in order to protect its long stock positions. Investing across a mixed and diversified range of traders adds an additional layer of risk reduction."
The core portfolio is likely to include well-known managers with whom Momentum has had long acquaintance.
"One of our favoured managers is US-based Sandler, which invests in entertainment and communications stocks rather than hi-tech. The manager has around 25 years' experience of investing in this area," Goldman said.
Other 'core' managers are likely to be Schwendiman, Galleon and Spinner.
He said the fund had been seeded by a European bank and an Asia-based fund management company. The charges will be 1% annually with a 15% performance fee.
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