Old Mutual Global Investors has launched the Old Mutual Arbea Fund, managed by Ian Heslop, Amadeo Alentron and Mike Servant. The Fund shares the same investment process as that of the USD220 million+ Old Mutual Global Equity Absolute Return Fund, a UCITS fund which has been managed by this Team since 1 July 2009 and which has delivered an excellent investment performance track record, returning 15.6% and 10.8% annualised over one and three years respectively.

Domiciled in Cayman, the fund is a global equity market neutral fund with an investable universe covering 3,500 liquid stocks across developed markets, and the emerging markets of Korea, India, Taiwan and China (through Hong Kong).

The objective of the Fund is to target 9% volatility using gross leverage of between 300 and 400% and aim to ensure that the correlation of the Fund’s returns to equity returns is very low.  The Fund is aiming for a return of cash plus 9% annualised.  The Fund is only invested in equities or equity equivalents with all foreign exchange exposure being hedged back to base currency. The Fund will aim to generate its performance from a very diversified investment portfolio of over 700 positions, which will be roughly equally split between long and short positions.

Heslop, Head Portfolio Manager for the Fund, says: “We have calibrated the risk/return profile to seek to meet the needs of Pension Fund and other Institutional Investors who are looking to achieve returns in the order of 9-10% with volatility of less than 9%. The investment process is the same we have successfully executed in the Old Mutual Global Equity Absolute Return Fund over the past four years. We are delighted by the $50 million of seed capital invested by Old Mutual in the Fund. It demonstrates their confidence and belief in our investment strategy.”

Donald Pepper, Managing Director of Alternatives, says: “The block of seed capital from Old Mutual demonstrates the Firm’s commitment to its Hedge Fund business and, more specifically, to the strategy of Ian’s team. Investors are looking for a strong alignment of interest between them and the investment manager. This scale of co-investment very clearly delivers that.”

Julian Ide says: “It is exciting to launch Old Mutual Global Investors’ first new fund. Helping investors achieve good risk adjusted returns is an important goal. We believe this Fund, along with its UCITS counterpart, which now has a four year track record and for which Ian Heslop and co-PM Amadeo Alentorn were recently awarded the AAA for Alternative UCITs by Citywire, will help meet an important need for Investors.”

This brings the number of hedge funds managed by Old Mutual Global Investors to three. Ashton Bradbury manages the UK Specialist Equity fund, an Equity Long/Short fund with a 10 year track record and no down years. Paul Simpson and John Dow manage the Old Mutual Global Statistical Arbitrage Fund which a 6 year track record that included +18.3% return in 2008.