JP Morgan Alternative Asset Management (JPMAAM) has announced the $100m launch of its multi-manager sustainable long/short fund, an alternative strategy designed to allocate capital to companies that lead their peer groups in sustainable performance and will benefit from long-term sustainable trends.
Utilizing long/short equity managers and high conviction single trades, the fund's long positions will focus primarily on companies screened using JPMAAM's proprietary ESG ratings framework.
The strategy will emphasise sustainable alpha opportunities emerging from long-term global sustainability themes, such as energy transition, resource efficiency, empowerment, health & wellness, and technology for sustainability. JPMAM believes these sustainable investment themes will lead to considerable structural changes that will result in winners and losers, which present opportunities to also benefit from shorting sustainability laggards within the strategy.
"Sustainable alpha can be generated where the impact of structural changes is under appreciated and incorrectly priced," said Jamie Kramer, global head of JP Morgan Asset Management's Alternatives Solutions Group and co-portfolio manager of the Multi-Manager Sustainable Long/Short fund.
"The long/short equity managers we work with have already embraced ESG as part of their risk management. They're now focused on capturing sustainable alpha opportunities. They, like us, believe it's possible to generate sustainable alpha and have a positive impact at the same time. They're actually further ahead in their thinking than many of their peers. There's still a lot of educating to do when it comes to hedge funds and ESG; something we remain focused on and are doing something about."
The fund leverages JPMAAM's 25-year track record in manager selection. It seeks to deliver equity-like returns but with less than two thirds the volatility of global equities.