Schroders is today launching a hedge fund product via its GAIA Ucits platform, which will invest across thousands of equities and hundreds of macro markets.
The Schroder GAIA Two Sigma Diversified fund is sub-advised by data-driven investment manager Two Sigma Advisers.
It becomes the ninth fund between the Schroder GAIA and Schroder GAIA II platforms, with all but one of these funds managed by external hedge fund managers.
The liquid alternative strategy will apply a “scientific and algorithmic approach” to invest in “thousands” of equities and “hundreds” of macro markets, with the majority of the fund allocated to an equity market-neutral strategy.
The fund aims to avoid correlation with traditional equity and bond markets.
Head of Schroders GAIA Eric Bertrand says it is seeing strong demand for alternative liquid strategies from investors seeking to diversify their portfolio.
“Two Sigma has a strong reputation in the field due to its leading technology expertise and creative, research-driven approach, which allows the firm to design and evolve intelligent systematic strategies.”
Chief Investment Officer of Two Sigma Advisers Geoff Duncombe says: “Two Sigma’s platform approach leverages data and technology expertise to create solutions that meet the needs of diverse investor groups.”
The investment manager, which launched in 2009, uses computing power and data management in its process, with 150 of its 1,000 staff being educated to PhD level.
Schroders’ GAIA (Global Alternative Investor Access) platform offers investors portfolio diversifiers that seek to deliver controlled volatility, low correlation to markets, and attractive risk-adjusted returns, Duncombe says.
The Schroder GAIA Cat Bond is the only product in the range that the investment manager runs in-house. Other strategies in the range include fundamental equity long short, merger arbitrage, US focused credit long short and liquid distressed funds.