The fund, managed by Ben Wallace, aims to produce a positive absolute return over the long-term regardless of market conditions by investing in companies based in the UK. By utilising the powers of UCITs III the mandate of the fund allows investments in different securities and money market instruments including the use of shorting to make profits in falling markets. The fund can invest across the capitalisation spectrum, although there will be a bias towards FTSE 250 companies.
The fund will follow a similar investment style to the offshore hedge fund, Alphagen Octanis, that Wallace has been running since 2005. The portfolio will be comprised of both core and tactical positions with tactical positions occupying roughly 2/3 of the gross portfolio.
The fund will typically range from -30% net short to +75% net long, although it is expected that positions at these extremes will not be held for long periods. The gross (total % of longs + total % of shorts) exposure is typically expected to be within 50% to 200% with a maximum of 300%. Historically, volatility has been relatively low compared with the index, as the manager has effectively added value through his shorts during falling markets as well as making money in rising markets.
5 stars awarded