H2O launched Fidelio, a long–short equity fund which aims to generate an absolute return of 5% p.a. over a recommended 3-year investment horizon. The fund’s objective is to keep volatility below that of global equity markets within this timeframe. It will also seek to exhibit a low correlation to the major global equity market indices. It will take both long and short positions, mainly on economic sectors and listed companies.
The fund benefits from the long-standing global macro expertise of the H2O management team. This “top-down” component is critical to seize the shifts in paradigm, the swings in market fashions and the correlation rotations that impact the equity asset class as a whole. It enables the team to focus solely on those strategies that are relevant to the on-going environment.
H2O Fidelio also relies on a “bottom-up” process managed by Gonzague Legoff who has been running global macro funds since 2003.
Gonzague Legoff and Christophe Chappuis, the fund’s co-managers commented, “Investors’ constraints generate the best sources of performance. As most asset management companies organise their equity research & management teams along geographical lines, they breed regional arbitrage opportunities between stocks belonging to the same sectors and exposed to the same markets.”
The positive side of this multi-strategies approach is that it does not necessitate the comprehensive and systematic coverage of an excessively large security investment universe by means of a crowd of equity analysts. It requires the opportunistic singling out of a few specific themes and their blending with the strategic positions.
Since its inception on October 25, 2016, the $-denominated I share class of H2O Fidelio has delivered a +3.9% positive return as at February 13, 2017.