Threadneedle Investments has launched a Luxembourg-based absolute alpha fund that will invest in Pan-European equities.
The fund will be managed by Paul Doyle and will utilise the same process and resources as the Threadneedle Apex European Fund, which Doyle also manages, and in which high-conviction stock selection has been the dominant driver of returns with a strong focus on company analysis and valuation.
A top-down overlay will be applied to manage sector exposures while retaining focus on monitoring risk. The portfolio will primarily take long and short positions in European equities and will aim to generate the majority of performance from stock selection.
Commenting on the launch, Doyle said: “We have demonstrated that this particular high-conviction stock picking strategy has been successful in navigating both bear and bull market cycles whilst limiting volatility of returns. We are now pleased to offer investors access to the same strategy in a regulated, liquid and transparent format though the Threadneedle (Lux) European Absolute Alpha fund.
“Despite the negative news flow surrounding Europe recently, we believe that it is an exciting time to look at European equities as we are able to find many companies at compelling valuations. The opportunity to deliver absolute returns through fundamental and valuation analysis with high conviction long and short positions is considerable.”
Doyle, who joined Threadneedle in 1995, has over 20 years’ experience in European equities. As manager of both retail and institutional portfolios Paul has a proven track record of generating alpha under different market conditions. Since launch in 2000, the European long/short strategy generated net pro-forma cumulative performance2 of 82.2% (vs. a performance of -10.8% for the index) whilst limiting annualised volatility to 5.6% (compared to 21.4% for the index).
Campbell Fleming, Head of Distribution at Threadneedle, said: “Our clients have indicated a great appetite for a product that will seize opportunities to capitalise on European equities while interest rates remain at historic lows and Eurozone uncertainty has depressed equity valuations. Our European equities capabilities and the experience of our investment teams mean we are well placed to take advantage of these opportunities within a framework of careful risk management.”
The fund has been approved by the CSSF (Commission de Surveillance du Secteur Financier) for public offer in Luxembourg. Approval is pending in other jurisdictions.
Two global vehicles
'Further plug advice gap'
Must appoint separate CEOs and boards
Advisers do come out well
Will report to Mark Till