Old Mutual Global Investors is to launch a new UK Specialist Equity fund later this month.
Subject to regulatory approval, the Ireland-domiciled fund will be registered for sale in a number of European countries and in Singapore on April 28, the UK-based asset management arm of Old Mutual Group said.
The fund will be managed by Tim Service, with support from deputy fund manager Luke Kerr. An absolute return fund, it will invest in long and short positions in UK equities, primarily outside the FTSE 100 Index, maintaining “low net exposure to underlying equity markets”, OMGI said in a statment.
The fund will mirror the strategy of an existing Cayman Islands-domiciled vehicle, also managed by Service since 2014, which has a track record dating back to 2003.
The new UK Specialist Equity fund will be well diversified, holding between 80 and 110 long and short positions. It will typically have a net exposure of between -20% and +20% of NAV, making use of individual single-stock short positions and index baskets to control the net exposure to equity markets, OMGI said.
In a statement, Service said that recent market volatility had highlighted “the potential value of alternative investments within a portfolio”, suggesting that this might be an area he plans to pursue.
“This fund offers access to this expertise, with low net exposure to underlying equity markets, and the ability to deliver a return from falling as well as rising individual share prices,” he added.