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Threadneedle: Launch of UK Absolute Alpha Fund strengthens absolute return range

Monday, September 06, 2010
Opalesque Industry Update - A pioneer in absolute return investing, leading manager Threadneedle today announces plans to launch the Threadneedle UK Absolute Alpha Fund, reinforcing the company’s absolute return fund range, anticipating significant reform and responding to client appetite for a UK absolute alpha product. The UCITS III fund will give co-managers Mark Westwood and Chris Kinder increased flexibility in strategy and fund positioning.

Threadneedle has £1.9bn* AUM in absolute return, across a broad range of products and strategies, and has more than nine years’ experience in single strategy hedge funds. Both Mark and Chris have proven long/short experience and have built strong track records of adding alpha under different market conditions. The UK equities investment team is supported by a solid operational infrastructure and independent risk analysis and has access to over 100 investment professionals across all asset classes and regions.

Mark Westwood, co-manager of the Threadneedle UK Absolute Alpha fund, said:
“This is an exciting time to leverage our expertise in delivering absolute returns for our clients. With the dislocations of the past few years still fresh in investors’ minds, the opportunity to add value through fundamental and valuation analysis on a long/short basis remain considerable. The Threadneedle UK Absolute Alpha Fund will use the process and techniques that we have successfully employed over the years in our Cayman-domiciled absolute return fund”.

Chris Kinder, co-manager of the Threadneedle UK Absolute Alpha fund, added:
“This fund enables a broader range of investors to access uncorrelated returns through the cycle. We are looking forward to monetising the significant opportunities that our research has uncovered on both sides of the book, to deliver value to a broader range of investors.”

* As at end of June 2010, includes regulated and non-regulated products

Gary Collins Head of UK Wholesale said:
“Threadneedle has a proven track record for delivering performance via absolute return funds, and we believe that this fund will leverage our existing resources and experience to the next stage of development for absolute return. We have spoken extensively to our clients and they have indicated a great appetite for a product that will capitalise on the UK investment market in this form. The introduction of UCITS III regulation has triggered strong growth in the regulated absolute return sector and the migration of hedge fund strategies to the transparent, liquid and highly regulated UCITS market looks likely to continue to drive investor interest.”

The Threadneedle UK Absolute Alpha Fund is expected to launch in early Q4 2010. Along with the launch of the UK Absolute Alpha fund, Threadneedle is updating certain investment vehicles to refine its absolute return range, as a result of feedback from investors regarding investment vehicles and individual strategies, and in anticipation of reform to the way products can be distributed in Europe. Consistent with this and with the new fund launch, the existing Threadneedle UK Crescendo Fund will close in October.

(press release)

The UK Absolute Alpha Fund will utilise similar process and resources as the Threadneedle UK Crescendo Fund. The portfolio will primarily take long and short positions in UK equities and will aim to generate the majority of performance from stock selection.

 Retail: 3.75% Initial Charge + 1.50% Annual Management Charge (AMC) + 20% performance fee*
 Institutional: 1.00% Annual Management Charge + 20% performance fee*

Other funds in Threadneedle’s UCITS III Absolute Return range include:
 Threaneedle American Absolute Alpha Fund
 Threadneedle Absolute Return Bond Fund
 Threadneedle Target Return Fund
 Threadneede (Lux) Target Return Fund (US$)
 Threadneedle Target Return Core Fund
 Threadneedle Credit Opportunities Fund

* Performance fee is over a cash hurdle rate, 3 month GBP Libor

Threadneedle has been a pioneer in absolute return investing, launching its first fund in 2000. In 2005 it launched its UCITS III Absolute Return Bond Fund to address the needs of everyday investors, drawing on Threadneedle’s expertise across interest rates, currencies, investment grade credit, high yield and emerging markets. Today, Threadneedle has £1.9bn AUM in absolute return, across a broad range of products and strategies including credit opportunities, emerging markets, commodities, UK, American and European equities.

Threadneedle is an international investment manager with a strong track record of out-performance across asset classes. We actively manage £59.7bn of assets, investing on behalf of individual investors, pension schemes, insurers, corporations, mutual funds and affiliate group companies. Threadneedle's distinctive investment approach is based on creative thinking, sharing of ideas and rigorous debate. Established in 1994 in London, Threadneedle operates in 15 countries with customers in over 80 countries. Threadneedle is owned by Ameriprise Financial.


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