LRI Group, Luxembourg-based investment services company, has partnered with M17 Capital Management, a Swiss based investment company, to launch its European Market Neutral Ucits fund.
The fund is aimed at institutional investors, pension funds, family offices and high-net worth individuals (HNWI) predominantly in Germany, Switzerland, UK and Scandinavia. To date, it has obtained investor commitments of close to €191m.
The fund invests with a fundamental approach in a market neutral concentrated portfolio of 30-60 positions with a European bias and targets a return of 10-15% p.a. net of fees while maintaining an annualised volatility below 10%. While traditional market neutral funds have a high number of pair trades to limit any exposure and the diversification effect reduces risk and volatility, its risk/reward profile is juicier than most market neutral equity long/short products as it captures alpha with individual, sized-up “best ideas” positions while risk exposures are managed tightly for positions and the portfolio as a whole.
The Ucits fund will be launched with share classes denominated in USD, EUR, CHF and GBP (all hedged). The initial subscription period for the founders’ share class with discounted fees will commence 14 February 2018. It will be first registered for public distribution in Germany, UK and Luxembourg and will also be available to qualified investors in Switzerland as well as shortly thereafter in other countries.