Man launches regulated fund of inhouse funds

Man Group has become the largest investor to launch a fund of onshore alternatives funds, incorporating talents of discretionary management subsidiary GLG and its own computer-driven AHL in an onshore product for the first time.

The world’s largest listed hedge fund investor says Man GLG Multi-Strategy fund already has more than €100m worth of commitments, and takes subscriptions from €1,000.

It holds between 10 and 15 Ucits funds run within Man Group, including products from units GLG, Ore Hill, and AHL, among others.

Investors pay only the fixed and variable fees of the underlying funds, not fund of funds charges on top.

Luke Ellis, chief investment officer of Man’s Multi-Manager division (pictured), said: “This multi-strategy Ucits fund incorporates the best investment talent from both GLG and AHL teams.”

He will oversee a team allocating between the strategies for the new product. In broad terms, equity long/short strategies will comprise between 50% and 80% of its assets, risk-seeking strategies from 10% to 35%, and ‘diversifying strategies’ between 5% and 25%.

In general terms, Man dubbed May “a tough month for many in the hedge fund sector”. The industry fell XX%, according to Hedge Fund Research, as sharp weakening in market sentiment, soft US economic data and concerns over Chinese growth led the MSCI World index to drop 1.7%.

Equity hedged styles – the $2trn industry’s most popular strategy overall – fell 1.1%, but still beat long-only global shares.

The Chinese concerns saw commodities tumble 9.3%, including oil indices off 10%. Precious metals such as silver fell almost twice as far, and commodity-linked currencies also fell. Amid this, Man said, computer-driven managers suffered from long equity and commodity positions.

Short US dollar trades hurt them, too, as the trade-weighted US dollar index climbed 1.3%. By month’s end computer-driven funds were off 4.7%, according to the Newedge CTA Index.

Global macro funds fell 2.6% according to HFR. Man attributed this largely to their holding similar risk positions to those model-driven funds had.

Volatility managers fared well as investor nervousness rose last month and sent the CBOE VIX index – a gauge of near term expected volatility in US shares – spiking from 15 to 18 during the month.

David Walker

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