The reopened Cazenove Absolute UK Dynamic fund has started trading round the edges of the portfolio after John Warren, the new co-manager, joined from UBS.
Warren was an equity salesperson at the investment bank and has been helping to contribute trading ideas as a satellite part of the portfolio alongside its central investment ideas.
In their latest commentary, he and co-manager Paul Marriage (pictured) acknowledge their shorts have been a headwind, given that the British smaller companies universe in which they typically invest has been rising sharply.
Towards the end of December, they removed their short FTSE 100 British large cap future position and shorted British mid caps, as investors are paying a premium for mid cap stocks.
However, they say their longs have benefited “as the market continues to look down the market cap spectrum for opportunities”. (article continues below)
They have taken new positions in Entertainment One, the film company behind Peppa the Pig and the Twilight series, in Flybe, the recently listed airline, and in larger stock Aggreko, the manufacturer of portable power generators.
Overall, the fund is 52.4% net long, with gross long positions of 105.2% and gross shorts of 52.8%.