Groupama Asset Managment has "not abandoned" long/short hedge fund strategies although it has shifted towards equity market neutral, said Henri Chabadel, the firm's head of Sigma Fund Management.
Groupama AM invested initial seed capital of €15m in the fund. Chabadel is waiting for the fund’s first birthday before commencing the marketing process across Europe so investors can see it has a track record.
Since the fund’s launch it has delivered near flat performance, down slightly by 0.15%. He expects to see most interest in the fund come from France and Italy, Northern Europe and Spain. Management fees are 0.9% for the institutional share class and 1.5% for the retail share class.
The group opted for an equity market neutral Ucits product as Chabadel believes it has “fantastic commercial potential”. The strategy was not as market neutral as some investors would have liked last year, but it did outperform the majority of hedge funds with the HFRX EH: Equity Market Neutral Index down just 2.92% in 2011. Chabadel accepted the fund could lose money in such a scenario, but said this would be “very disappointing”.
He added that there are many ways in which equity market neutral funds can function, but the focus of this fund will be on active management and regular repositioning. “The first year of management is very important – you need to invest calmly,” he added. He believes the fund’s manager will be capable of delivering this given his previous 15 years of experience in the financial industry. Boughalem joined Groupama AM from D Bench Alternative Investments, a young French company specialising in absolute return Ucits funds.