Old Mutual Asset Managers (UK) is to launch two new Dublin-domiciled offshore funds, one of which will be a global equity absolute return fund.
The other, known as the Old Mutual UK Dynamic Equity Fund, will be a so-called “short extension fund”, which aims to outperform in both rising and falling markets by combining long and short positions. It will make use of the same strategy as an existing OMAM dynamic equity hedge fund and be run by the same team.
OMAM managing director of distribution Matthew Nagele said the two new funds would “exploit OMAM’s expertise and experience in long and short investing”.
Both will be launched as sub-funds of Old Mutual Dublin Funds plc, an Ireland-licensed, UCITS-compliant OEIC. They are expected to be available to investors sometime later this year, according to an OMAM spokesman.
Minimum investment for both funds in the retail share class will be £1,000, with the absolute return fund also available in dollar and euro denominated versions, for which the minimum will be $1,000 or €1,000. The annual fee will be 1.5% and there will be a performance fee of 20%.
An institutional share class, with a minimum investment of 100,000 in each of the three currencies, is also planned.
The absolute return fund will be benchmarked against the relevant central bank base rate, while the other will take its bearings from the FTSE 250 index, minus the investment companies component.
Neither fund is yet authorised for sale anywhere, but regulatory approvals are currently being sought in Ireland, the UK, France, Sweden and Switzerland, the OMAM spokesman said.
“Cash-plus returns over the longer term in all market conditions”, through a global equity market-neutral portfolio designed to have low correlation to underlying markets, will be the target of the new Old Mutual Global Equity Absolute Return Fund, OMAM said.
It will be managed by OMAM’s Quantitative Strategies team, which has been managing market-neutral funds since 2001.
Luke Kerr, currently the manager of Old Mutual’s UK Dynamic Equity hedge fund, will head up the team running the new UK Dynamic Equity fund. Like that hedge fund, ideas will be sourced mainly from UK equities outside the FTSE 100 Index.
Eventually, OMAM plans to replace the existing UK Dynamic Equity hedge fund with the new, Ucits-compliant version, in response to market demand.
Until December Kerr was also manager of OMAM’s Old Mutual UK Select Smaller Companies Fund, which is now handled by Dan Nickol.
Further information on OMAM is at www.omam.co.uk.
OMAM is an arm of the London-based, South Africa-founded Old Mutual financial group.
