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Five selectors name their top L/S equity picks

Citywire Selector collates the best L/S equity funds chosen by investment professionals.

Selector snapshot – Long/Short Equity

In our third and final instalment assessing the funds that top selectors backed in our 'Selector Snapshot' series over the first half of the year, Citywire Selector collates the fund’s investment professionals have been favouring in long/short equity over the past six months.

In this gallery, we look at five funds investors have championed for their outright performance and impressive track records. To find out the funds named in European small & mid-caps, please click here. While the rundown of top GEM equities fund can be found here.

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Fund: Henderson Gartmore UK Absolute Return

Selector: Lucas Strojny, Advenis

In preparation for the UK’s decision to leave the EU, Strojny took a significant position in the Henderson Gartmore UK Absolute Return fund.

He viewed this as an adequate way to counteract political chaos. ‘We have increased our long/short equity exposure to benefit from the dispersion caused by the series of political events in Europe.’

Fund facts

The fund is run by Citywire A-rated duo Luke Newman and Ben Wallace, and, as of the end of May 2017, had €4.23 billion (£3.74 billion) in asset under management.

Top ten holdings of the fund include UK insurance companies such as Legal & General Group (3.5%) and Aviva (3.4%). The fund also has substantial positions in security company G4S (1.4%) and infrastructure group Balfour Beatty (1.5%).

Over the three years to the end of May 2017, the fund returned 13.4% in euro terms in the long/short equity category. This compares with a 5.4% sector average over the same time period.

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Fund: BlackRock European Opportunities

Selector: Florian Rainer, Matejka & Partner Asset Management

Rainer looks at a wide range of asset classes and in the alternatives space he is currently focused on European equity. Within that sector, Rainer currently manages its own European equity strategies as well as investing in the BlackRock European Opportunities fund.

‘It’s one of our favourite products and we like it a lot. It’s had really stellar performance over the past few years and David Tovey is really doing something different compared to other benchmark huggers, which is something that we value.’

Fund facts

The fund is currently managed by Citywire AAA-rated David Tovey and, as at the end of May 2017, it had €1.1 billion in assets under management. The fund was soft-closed earlier this year after a brief reopening period which saw it gain €400 million in net new money.

Tovey currently holds companies such as British American Tobacco (4.24%), hydraulic vibration dampener company Stabilus (3.70%) and technology consulting and engineering company Alten (3.69%). The fund also has overweight positions in Switzerland (17.39%), Denmark (12.79%) and Sweden (11.47%).

Over the three years to the end of May 2017, the fund returned 77.6% in euro terms, in the long/short equity category. This compares with a 5.4% sector average over the same time period.

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Fund: Liontrust GF European Strategic Equity

Selector: Florian Gröschl, Absolute Return Consulting

Despite long/short equity managers having suffered in 2016, Groschl said there had been a lot of hype around quant-backed and systematics areas. However, Gröschl said he was able to find stand-out managers in the L/S equity space.

‘We moved into the Liontrust fund in October, so it is relatively new. But, the timing has been good, as markets have decorrelated and the short book is working well. That is the benefit of being a smaller player, such as ourselves, in that you can say: “Is the timing okay?” and if you think so, you act immediately and lock it in, rather than waiting for sign-offs and the opportunity may have passed.’

Fund facts

The fund is currently managed by Citywire A-rated duo, James Inglis-Jones and Samantha Gleave and has €103.9 million in assets under management.

At present, the fund holds net short positions in countries such as the US, the Netherlands, Canada, Belgium and Norway. Top sector allocations include materials (23.8%), industrials (25.3%) and consumer discretionary (20.0%).

Over the three years to the end of May 2017, the fund returned 21.6% in euro terms in the long/short equity category. This compares with a 5.4% sector average over the same time period.

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Fund: CF Odey Absolute Return & Threadneedle UK Absolute Alpha

Selector: Miranda Ademaj, Skenderbeg

Ademaj said the landscape for L/S equity is challenging but added that her team favours the sector. With the Odey Absolute Return fund, Ademaj said the team is impressed by its strong track record even in times of market weakness.

Meanwhile, with the Colombia Threadneedle fund, Ademaj and her team like the fund mangers’ views on the stock market, as they believe it is influenced by short-term factors which create opportunities for investors with a clear view of a business’s worth.

Fund facts

The Odey Absolute Return fund is currently managed by Jamie Grimston and James Hanbury and has €950.5 million in assets under management. Over the three years to the end of May 2017, the fund lost 5.8% in euro terms, this compares with a 5.4% rise by the sector average.

The Threadneedle UK Absolute Alpha fund is run by Citywire A-rated Chris Kinder and Mark Westwood, with €795.80 million in assets under management. Over the three years to the end of May 2017 the fund returned 1.7% in euro terms, this compares with a 5.4% sector average.

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Fund: Schroder ISF European Alpha Absolute Return

Selector: Markus Bamert, Lenox Capital

Despite having previously mentioned that the team at Lenox Capital favour boutique bets in its portfolios, Bamert said the team is looking to Schroders’ long/short offering to provide diversity.

‘With such diversification, our allocation in Europe remains stable in spite of intermediate changes in the market environment,’ the Switzerland-based investor said.

Fund facts

The fund is currently managed by Citywire + rated Lionel Rayon and as of the end of May 2017 had €1.3 billion in assets under management.

Top allocations include long positions in industrials, financials and oil and gas. For country allocations, Rayon currently favours France, Italy, Sweden and Switzerland.

Over the three years to the end of May 2017 the fund returned 12.9% in euro terms which compares with a 5.4% sector average over the same time period.

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Related Fund Managers

Luke Newman
Luke Newman
32/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: 13.19%
Ben Wallace
Ben Wallace
31/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: 13.19%
David Tovey
David Tovey
1/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: 75.01%
James Inglis-Jones
James Inglis-Jones
16/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: 19.21%
Samantha Gleave
Samantha Gleave
17/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: 19.21%
Jamie Grimston
Jamie Grimston
124/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: -2.38%
James Hanbury
James Hanbury
123/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: -2.38%
Chris Kinder
Chris Kinder
121/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: -0.99%
Mark Westwood
Mark Westwood
120/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: -0.99%
Lionel Rayon
Lionel Rayon
49/138 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: 10.38%
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