Old Mutual Global Investor is to launch the Style Premia Absolute Return (STAR) fund as it boosts its liquid alternatives offering.
The Ucits fund, which is planned for launch at the beginning of December, will have a volatility target of 8 per cent and aim to deliver positive total returns on a rolling 12-month basis, with no correlation to the bond and equity markets.
The styles the fund will use are value, quality, momentum and carry, across equities, fixed income and currency.
Leif Cussen will be lead manager with Paul Simpson and John Dow as portfolio managers. Additionally, the firm has created a style premia investment committee to provide extra support to the trio.
Cussen says: “STAR is designed to meet a growing demand for cost-effective systematic strategies. The fund gives investors access to the diversifying benefits of four core systematic styles across multiple asset classes. In addition, it utilises our proven proprietary statistical arbitrage capability to further enhance diversification and mitigate crowding risks typically associated with style premia exposures.”
OMGI manages £7bn in hedge fund strategies, as at 30 September and launched its first quantitative equity market neutral hedge fund in December 2001.
OMGI managing director of alternatives Donald Pepper says: “STAR is designed to have a very low correlation to traditional assets. We believe the strategy will be a good diversifier to market driven exposures in clients’ portfolios. Further, given its long/short orientation, we see the strategy as a complement to hedge fund strategies, but at a significantly reduced cost.”