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Alternative Market Briefing

Dacharan’s new quant equity fund up 7.5% in first 6 months thanks to quality of alpha

Thursday, July 31, 2014

Benedicte Gravrand, Opalesque Geneva:

A European fund manager recently launched a systematic equity fund that chases the quality of alpha in the equity space.

Dacharan Capital launched in May 2008 in the UK and subsequently moved to Switzerland, now operating a Jersey/Swiss management company structure. Their new Dacharan Equities Fund is a systematic market neutral equity fund incepted in January 2014; it is up 7.5% YTD (to end-June) net. It invests in a basket of value companies, with a momentum component added to the portfolio to incorporate market sentiment and to diversify.

David Beddington, Managing Partner at Dacharan, told Opalesque that they launched the fund because they are excited about the quality of alpha in the equity space, particularly in Europe. Alpha is the return in excess of the compensation for the risk borne.

"Dacharan’s research has uncovered a number of persistent equity performance drivers that we have a high level of confidence in," he explains. "Because of this, we have no need for beta in the portfolio in order to generate returns."

Recent research has shown that hedge funds are becoming increasing correlated with equity markets, he continues, which suggests that many managers are selling alpha and in fact delivering beta.

Dacharan stays out of the woods by keeping a market neutral portfolio for uncorrelated returns. "We keep a market......................

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