Preservation a top priority for Pegaso

Carlo Gallina of Cramer Asset Management believes current market conditions require him to stay light on his feet, ready to move when the market does.

It comes as no surprise in these ­difficult times that capital preservation should be placed top among the demands investors make of their fund managers.

Carlo Gallina (pictured), managing director of Cramer Asset Management, based in Lugano, gives pride of place on his website to a quote from the sage Warren Buffett, who once said: “The first rule is not to lose. The second rule is not to forget the first rule.”

Cramer AM’s flagship fund is the Pegaso Capital Strategic Trend fund, domiciled in Luxembourg. The fund has assets of €140.27m (as of 3 April), after year-to-date growth of 2.66% and 8.24% over three years.

Pegaso was launched in October 2010, but the three-year performance includes that of Gallina’s previous fund, which closed due to heavy redemptions when he resigned.

When he launched a new fund – continuing the strategy under the Pegaso name – rating agencies gave him a track record ­extension, enabling him to use the three-year statistic. A second fund, the Pegaso Capital Strategic Bond fund, was launched last October and has assets of €42m. The Strategic Trend fund is a ­flexible, long-only Sicav that uses futures for hedging purposes.

The investment aim of Pegaso is to restrict losses in downward markets, while retaining enough ­flexibility to participate in rallies.

It is an indication of current market sentiment that investors are more concerned about preserving the assets they have than taking on risk to seek out improved returns.

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