Opalesque Industry Updates - Aramid Asset Management and Thomas Funds have joined forces to launch the Aramid All Asset Capital Preservation Fund.
This long/short multi-asset Fund seeks to offer investors the ability to participate in market gains whilst protecting investors from market corrections. |
The long portfolio seeks to participate in global economic growth whilst diversifying equity risk and deflation risk by exposure to sovereign debt. Additionally the long portfolio seeks to provide an inflation hedge by investing in real assets such as a diversified pool of commodities and inflation protected securities. The long portfolio allocates across asset classes, diversifies across countries and regions and weights allocations to different asset classes based on the perceived risk in the market.
The Fund seeks to protect capital from market shocks and corrections by having in place at all times a short portfolio. By not market timing the short portfolio, the Fund has constant protection from market corrections. In addition to commonly used hedging techniques, such as put options and covered calls, Thomas Funds, the Investment Manager of the Fund, seeks to use innovative hedging techniques which will seek to enhance the risk management process and also provide relative value.
The lead sponsor of the Fund is Aramid Asset Management, an investment and corporate financial and structuring advisory company, which provides corporate infrastructure and investor services.
The Aramid All Asset Capital Preservation Fund has been set up as a master-feeder structure and institutional and funds of hedge fund investors can access it via a Cayman Islands feeder fund: Aramid/Thomas All Asset Capital Preservation Fund Limited (“Cayman Fund”). This will be an open end exempted company incorporated in the Cayman Islands which will offer investors liquidity and a SIPPs Share Class.
Sean Flanagan, Co-Founder of Aramid Asset Management, comments: "We believe this is the first fund of this type to be launched in the UK market. The Fund has been almost a year in development and has been driven investor demand for a new alternative to capital protection.”
""The fund is able to offer investors liquidity, full transparency and two levels of capital protection."
Thomas Funds' Glen Cremer is the CIO of the Aramid All Asset Capital Preservation Fund.
Glen Cremer outlines his investment process: "Our approach to asset allocation is based on the ratio of expected drawdown risk versus expected gain. Our first step is to set up a target for maximum loss we can tolerate in the next 30 to 60 days on which we base our allocation to each asset class and the level of hedges. We do not believe in the argument that asset classes are uncorrelated – we assume during times of risk aversion all risky assets tend to fall together and so we hedge each asset class. We also hedge at all times – market timing is almost impossible to achieve. There is no free lunch – you can only make money by taking residual market, credit or liquidity risk. The key is to identify that residual risk and minimise it using risk management overlay.”
"A successful asset manager is the one who identifies the right asset allocation theme, effectively manages the drawdowns and stays in the game at all times."
Aramid is also launching another feeder product aimed at the retail investor – the Aramid All Asset Capital Preservation Fund Limited (“Jersey Fund”), which has been set up as closed-ended fund established in Jersey as an unregulated exchange-traded fund. The fund will close on 27th November.
Aramid Asset Management is an asset management, investment and corporate financial and structuring advisory company. Aramid’s business is focused on the following key areas: asset management; hedge fund advisory/ management/incubation; family office, private wealth management and institutional investor advisory; capital introduction; corporate financial structuring and advisory. It is the lead sponsor the All Asset Fund and additionally is responsible for providing corporate infrastructure and investor services.
Thomas Funds is a specialist risk management and hedging company with offices in New York, London and Zug, that was founded by Manit Rye and Glen Cremer. Its aim is to offer investors truly “hedged” funds that focus on capital preservation. Thomas is the Investment Manager of the All Asset Fund and is responsible for risk management and for the hedging overlay. Manit Rye has 25 years of experience in developing, structuring and trading derivative strategies on equities, currencies and credit instruments, with a special emphasis in emerging markets. Glen Cremer has over 12 years experience in derivatives and investment management and additionally has expertise in direct collateralised lending and structured products. http://thomaslimited.com/