Opalesque Industry Update - The independent asset management company, Zadig Gestion (Luxembourg) S.A. has launched a new Luxembourg-based UCITS fund on 4 September 2013 called the Active Risk Parity Fund. It is a new sub-fund within Zadig’s already successful Memnon Fund in Luxembourg and will be advised by Zadig Asset Management LLP in London.|
The Active Risk Parity fund was launched with EUR 16 million of internal capital and will open to institutional and retail investors on 18 September 2013. It comes in addition to the already successful Memnon European Fund launched in 2011 under the Memnon Fund umbrella and which has EUR 258 million AUM.
Laven Legal Services, the boutique law firm in London and Luxembourg specialised in setting up investment funds, advised Zadig Gestion on the structuring and launch of the fund. The Luxembourg regulator (CSSF) approved the fund on 21 August 2013.
The Active Risk Parity Fund is a medium risk vehicle with the objective of providing positive medium to longer term capital growth, in all market conditions, by following systematic asset allocation process. Active Risk Parity is a proprietary all-weather process aiming at generating a high single-digit return over the medium term with no or low correlation with equities and government bonds. Risk is monitored with the aim of achieving a realized volatility below 8%. It dynamically allocates within a large span of market premiums covering equity indices, government bonds, commodities and credit through a fully-framed process. Risk Parity is first employed to define a neutral allocation between asset classes and to harvest efficiently market risk premiums over the long run. Active Modulation is then employed, and based on several hundreds of variables, market trends and valuations are monitored and result in tactically shifting weights toward the most promising assets while preserving capital from assets with poor outlooks.
Sébastien Maillard CFA, Head of Systematic Asset Allocation at Zadig Asset Management, and former Lxyor fund manager, is the creator of the Active Risk Parity strategy. Maillard says: “At Zadig I have found a great platform to pursue the development of the Active Risk Parity investment process initiated 7 years ago. I am glad to be part of a team of entrepreneurs and talented people and delighted to bring to the firm strong and reliable global macro views useful to navigate current markets.”
Kaltrine Balaj, Manager at Laven Legal Services, says: “This fund is an exciting addition to Zadig’s existing range of funds. We have worked closely with Zadig and the CSSF to help its launch at an exciting time when funds using derivative instruments linked to, amongst other things, commodity indices are proving popular with the market despite new ESMA and CSSF rules and regulations.”