Man GLG launches UK absolute value strategy

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Man GLG announced the launch of its UK absolute value strategy. Lead managed by Jack Barrat, the strategy will focus on the mid-cap segment of the UK equity market.

Launching in June, the long/short equity strategy, which has been run as part of the Man GLG Alpha select fund for over two and a half years, intends to return around 10% per annum by utilising the data and process behind the Man GLG undervalued assets fund and Man GLG UK income fud.

Jack Barrat, who is also co-manager of the Man GLG undervalued assets fund, will aim to monetise the entirety of the team’s absolute value-based framework, which identifies stocks with undervalued assets and undervalued profit streams. The framework, which has been employed since 2008 by Henry Dixon, co-manager of the Man GLG undervalued assets fund and lead manager of the Man GLG UK Income Fund, has been modified to correspondingly identify companies whose asset base or profit streams are materially overvalued, and whose prospects are deteriorating.

Furthermore, Man GLG also announces the appointment of James Houlden to the UK equity team. Houlden, who will be joining Man GLG from UBS, will support Dixon, Barrat, analyst Alice Owen, and the broader UK equity team in their work across all the UK funds.

Commenting on the launch of the strategy, Jack Barrat says: “Our work on the UK market naturally identifies companies that we believed to be overvalued, further to the undervalued opportunities we look for. We were confident that we could effectively monetise this within an absolute return strategy, and have been successfully doing so within Man GLG alpha select alternative. We are excited to launch the strategy on a standalone basis as an extension of this. Our analysis shows that pockets of the UK market are expensive and the wide valuation dispersion in the midcap space is offering a compelling opportunity.”

Teun Johnston, CEO of Man GLG, says: “The long/short strategy is a natural extension of the team’s existing approach and it has shown it can profit from extreme events such as the shock general election result in 2015 and the Brexit vote. The team’s long-established absolute value framework lends itself to a strategy of this nature and we believe it will be a valuable addition to our existing UK equity proposition.”

Henry Dixon, says: “We are happy to have James Houlden to the UK team. He will work closely with us as we seek to deliver value, income and absolute returns from the UK equity market.”