Kames launches equity absolute return funds

Kames Capital has doubled its absolute return range with the launch of two market neutral equity funds.

Managed by David Griffiths, David Pringle and Malcolm McPartlin, the Kames Equity Market Neutral fund targets cash plus 4 per cent over all market conditions in a three-year rolling period.

It is an offshore version of the £346m Kames UK Equity Absolute Return fund which invests in pair-trades, best ideas and thematic plays.

Both funds hold between 50 and 100 stocks with a “high degree of commonality”, Griffiths says.

Its sister fund – the newly unveiled Kames Equity Market Neutral Plus fund – will run a similar strategy under the same management team, although looking for a greater return by doubling the size of the bets it takes.

Its volatility is likely to be double that of the standard strategy.

Both of the new funds are Dublin-domiciled. The funds were announced in October.

The existing £498.5m Kames Absolute Return Bond fund is a long-short unconstrained fixed income strategy.

Both new funds are registered in Dublin and available in Sterling, Swiss Franc, Euro and US dollar share classes. The funds will be registered for sale in the UK and the Channel Islands following launch in Ireland.

Kames Capital chief investment officer Stephen Jones says the two new funds build on the existing capability of the firm’s absolute return team.

“Our genuine market neutral returns are appreciated by investors in both the UK and Europe and they are now asking for us to replicate these strategies, but with the potential for greater returns on their capital,” he explains.

“We believe these two funds meet this demand whilst remaining true to our absolute philosophy of providing real market neutral returns.”