Sarasin exploits Ucits III changes through product launches

Sarasin Chiswell has unveiled a range of investment products designed to take advantage of the enhanced powers available under Ucits III.

Two funds, GlobalSar IIID and EquiSar IIID, have been available since May 2 and May 8 respectively. Both are Ucits III-enabled versions of existing portfolios.

“Ucits III is a much bigger change than people think,” says Guy Monson, chief investment officer at Sarasin. “The toolkit available is at least 75% as good as the offshore hedge fund industry and the ability to use these new powers is a major step forward.

“We are the first house to introduce Ucits III products alongside our traditional range.”

GlobalSar IIID is co-managed by Monson and Daniel Briggs, head of global balanced funds. “We have run multi-asset portfolios for more than 20 years and are now able to manage the downside as well as the upside,” says Briggs. “We have the flexibility to hold up to 100% in cash and a maximum of 35% in third-party specialist funds.”

In addition to these two asset classes, GlobalSar IIID invests in global equities, real estate investment trusts, derivatives and government and corporate bonds.

The portfolio’s target asset allocation is primarily to shares and bonds, with 65% in equities and 20% in fixed interest.

EquiSar IIID, co-managed by Monson and Harry Talbot Rice, is a long-short equity fund using the same processes. The fund’s investment themes are corporate restructuring, efficiency and automation, global convergence, global pricing power and intellectual property and innovation.

The funds are run against a benchmark of the retail price index plus 3.5%. According to Sarasin, this is the level above which investors consider a return to be “real”.

The firm points to in-house research from 2005 that showed that, of a group of 500 investors, more than two-thirds estimated inflation at more than 5%, well above the RPI.

Both funds charge a performance fee of 20% of above-benchmark returns. Annual management charges of 1% and 1.25% are also applied to GlobalSar IIID and EquiSar IIID respectively. The minimum investment for both funds is 1,000, or 100 in a regular savings plan.