The £109m Henderson UK Opportunities fund has converted to sophisticated Ucits III, following an extraordinary general meeting held two weeks ago. Mileen Rash, the manager of the fund, is now able to use derivatives in addition to other instruments permitted under the Ucits III structure.
Rash has managed the fund, launched in 1987, since October 2005. By converting to sophisticated Ucits III Rash is better able to protect the fund in falling equity markets while increasing opportunities in rising markets, says the group. Volatility is expected to reduce also.
Laurie Jaques, the head of UK wholesale at Henderson, says Rash has proved his ability to manage long/short portfolios, and it is this that prompted the switch in the UK Opportunities fund. Rash already manages hedge funds for Henderson and is manager of its UK Equity Long-Short fund.
“He was adding a lot of value on his shorts,” says Jaques. “On the UK Opportunities fund he had one hand tied behind his back. It’s frustrating to have ideas that you can’t allow your clients to benefit from. This is a way of freeing him up.”
“It makes sense for hedge fund managers to move into the Ucits III space, rather than long-only managers going the other way,” Jaques continues. “It [shorting] is a totally different mindset.”
According to Morningstar the Henderson UK Opportunities fund was fourth quartile in the IMA UK All Companies sector, over both one and three years to October 1. Over one year it produced a fall of 34.41%, compared with a sector average fall of 24.23%. Over three years it fell by 12.78%, compared with a sector drop of 3.79%.