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Revealed: multi-strategy managers with the biggest Q3 inflows

Citywire Investment Research uncovers the Alt Ucits investors being backed heavily in the last three months.

Inflows in focus

The Alternative Ucits – Multi Strategy sector remains one of the most popular of the Alternative Ucits sectors we cover at Citywire. Funds active in the sector have taken in net inflows of €2 billion over the past quarter. In this gallery, Citywire Investment Research take a closer look at the managers taking in the most flows over the third quarter in the Alternative Ucits – Multi Strategy sector.

3. Aviva AIMS Target Return

In third position for estimated net inflows over the third quarter are Aviva Investors’ Daniel James, Ian Pizer,Brendan Walsh and Peter Fitzgerald. They co-manage the Aviva Investors Multi-Strategy Target Return fund which has taken in €281 million over the past three months.

The quartet invest in a wide range of strategies which combine to diversify risk and aim to be less than half as volatile as global equities over a rolling three year period. At the end of September their investments in a range of strategies benefiting from a reflationary environment made gains in the fund.

Strategies that anticipated gains in equities and a rise in US inflation did particularly well for positive contribution, as well as strategies benefitting from rising UK and US bond yields.

No major changes were made to their portfolio in September, while the team added a modest amount to EM equity and debt in Mexico and removed a strategy that aimed to benefit from the depreciation of the South Korean won. They also adjusted their strategy anticipating long-term US government bond yield rising relative to short-term yields.

Over the past year to the end of September the managers lost 0.43% in the Alternative Ucits – Multi Strategy sector. In comparison the average manager in the sector returned 2.14% in euro terms.

2. Deutsche Concept Kaldemorgen

Sitting in second position for net inflows over Q3 in the Alternative Ucits – Multi Strategy sector is the Deutsche Concept Kaldemorgen LC fund managed by Klaus Kaldemorgen. The fund took in net flows of €354.9 million over the quarter.

Kaldemorgan’s main strategy is to invest in different markets and instruments depending on the overall economic cycle and he builds up long and synthetic short positions in order to gain profits from over- and under-valuation of various asset classes.

At the end of September, Kaldemorgen’s largest individual holdings were Gold Bullion Securities, Italian BTPs and Deutsche Floating Rate Notes IC. Equity positions made up 24.6% of the fund, with the main country allocations being in Germany, US and France.

Against the backdrop of strong equity markets, hedging was further increased and the equity price gains amounting to 1.1% were the main performance drivers in September. Bonds also added 0.16% in local currency including derivatives to the fund’s performance. Bond positions in the portfolio were at 23.3%, with the main country allocations being in the US, Italy and Luxembourg.

Over the past year to the end of September, the Deutsche Concept Kaldemorgen LC share class of the fund returned 5.09%, while the average manager in the Alternative Ucits – Multi Strategy sector returned 2.14% in euro terms

1. Invesco Global Targeted Returns

The fund taking in the most net inflows in the third quarter in the Alternative Ucits - Multi Strategy sector is the Invesco Global Targeted Returns fund. The fund, which is managed by David Millar, David Jubb and Richard Batty, took in estimated net flows of €371.8 million.

The managers aim to achieve a positive total return in all market conditions over a rolling three-year period and generally have between 20-to-30 investment ideas in its portfolio at any time. They invest around 60% of its assets in other strategies managed by Invesco Perpetual and the wider group and 40% in cash-like instruments for derivative exposure.

At the end of the second quarter the trio closed out their long- sterling currency position, which derived income from selling options. This implementation looked less attractive after an appreciation in the UK pound and lower volatility.

Over the past year to the end of September, the Invesco Global Targeted Returns A Acc EUR share class of the fund returned 0.55%, while the average manager in the Alternative Ucits – Multi Strategy sector returned 2.14% in euro terms.

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