James Williams, news editor, Hedgeweek

Fund launches for Hermes Fund Managers, Stratton Street, TT International, Barclays introduces quant-based M&A fund…

TT International, one of Europe’s oldest hedge fund management companies, has teamed up with Deutsche Bank to launch the UCITS-compliant DB Platinum TT International Fund.

The fund is managed by Tim Tacchi, who founded the firm way back in 1988. It follows a global macro mandate, combining investments in a portfolio of largely European equities with a macro overlay of fixed income securities and FX positions. 

Tarun Nagpal, Deutsche Bank’s European Head of Fund Derivatives, commented that Tacchi’s twenty years’ plus experience managing global macro strategies was an “invaluable addition to our UCITS platform that aims to provide UCITS strategies from the world’s leading hedge fund managers”. Added Nagpal: “The product delivers a much sought after investment strategy for clients looking for diversification and opportunities to benefit from the ever changing geo-political environment.”
 
Said Tacchi: “We are confident that the launch of the fund, which gives investors access to TT International’s investment management experience and strategies in the form of a UCITS fund, on Deutsche Bank’s dbalternatives platform will provide an investment solution suitable for these challenging times.”
 
TT International currently managed more than USD9billion across macro, high-conviction long/short equity and long-only equity strategies.
 
Barclays has launched a UCITS fund to take advantage of large mergers and acquisitions in the US market reported FTAdviser this week. The premise behind the launch is that US companies are sitting on strong balance sheets and are waiting for an upturn in the economy to start deploying cash into takeover deals; something that Europe is beginning to see early signs of with the recent USD540 Publicis deal for LBi.
 
The Dublin-domiciled Barclays Quantitative Merger Arbitrage (Q-MA) US fund, managed by Amundi Investment Solutions, will buy into the targets of M&A deals worth more than USD500million. The stock price in target companies tend to trade at discounts (whilst the acquiring company’s stock tends to trade at a premium) ahead of any proposed M&A deal. Barclays will therefore look to generate returns by exploiting the “deal spread”.
 
Only US stocks will be targeted and each position will be built using strict position sizing and pre-defined entry and exit points. The fund will also buy S&P 500 index futures to hedge against market volatility.     
 
Commenting on the fund’s launch, Lisa Chaudhuri, a member of the Barclays UK Investor Solutions team, said: “Many [firms] are looking at acquisitions as a way to grow their businesses and this trend led us to launch the US Q-MA index in 2010. This fund is based on the index, which has significantly outperformed its benchmark since inception.” The Barclays US Q-MA index has returned 9.61 per cent since it launched in January 2010, compared to 4.18 per cent returned in the HFRX Merger Arbitrage index.
 
It seems to be a popular week for launching new funds. Also announced this week was the decision by London-based hedge fund manager Stratton Street to launch a UCITS version of its Renminbi Bond fund, reported Wealth Manager. This is in anticipation of what the firm believes will be a huge appreciation in the value of its currency – something that many, certainly in the US, will no doubt welcome. Romney included.
 
The fund is still subject to regulatory approval but Stratton Street’s head of sales Andrew Clarke says he expects it to attract assets in excess of USD1billion. “It’s very popular to say the renminbi is fully valued. But China is a creditor and creditor currencies are going up,” Clarke was quoted as saying. Stratton’s offshore Renminbi Bond fund launched in 2007 and has returned 28.03 per cent since December 2010.    
 
And just to round things off, Hermes Fund Managers has launched the Emerging Asia UCITS fund for Jonathan Pines, reported Wealth Manager. The new fund, unveiled to investors on 1 November 2012, is aimed at discretionary wealth managers and multi-managers in the UK. The fund has an Asia remit but will focus mainly on China, Korea, India, and Taiwan. Pines, who has led Hermes’ contrarian emerging Asia strategy since its inception in 2009, will not be allocating to Japan.
 
It’s the structural and rapid change of growth in the emerging Asia region, rather than the growth itself, that presents stock selection opportunities according to Pines, who added: China is a case in point – recently, rapidly changing expectations about the structure and resilience of its economy have depressed valuations. We are finding many stock picking opportunities in China, particularly among quality cyclical companies that are strong enough to weather the current challenging environment.”  
 
Finally, latest statistics released by the Malta Financial Services Authority show that the number of funds choosing to domicile there continues to grow, reported Hedgeweek. The island has seen a four per cent growth in authorised funds over the first six months of 2012. According to the MFSA, 65 new Collective Investment Scheme licenses have been issued, of which 59 were Professional Investor Funds (PIFs), five were UCITS, and one was a retail non-UCITS fund. With respect to UCITS funds, net assets in these funds stood at EUR2.3billion at the end of July 2012; an impressive 40 per cent higher than at the end of 2011.
 
Kenneth Farrugia, Chairman of the Malta Funds Industry Association (MFIA), said: “The management committee of the Association and its members remain committed to sustain and ensure the future growth of the industry and clearly the results achieved so far augur well for the continued development of this fast growing sector.”   

Further reading



Upcoming events

17 hours 59 min from now - New York
17 hours 59 min from now - Toronto
17 hours 59 min from now - Barcelona
1 day 17 hours from now - London

Upcoming training

Mon, 29/09/2014 (All day) - London
Thu, 02/10/2014 (All day) - London