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Opalesque Exclusive: A good season for stock picking in the UK - Legal & General`s one-year old small cap fund returns 14% so far By Benedicte Gravrand, Opalesque London: Legal & General managers remain cautious on UK economy prospects and see opportunities for shorts in consumer-related stocks and longs in stock-picking.

Legal & General is a household name in England as the group has been providing financial services to the retail and corporate worlds for a long time - since 1836 in fact. And the group now runs a couple of hedge funds; the LGIM Japan Alpha Fund and the LGIM UK Smaller Companies Alpha Fund. The latter has consistently outperformed the FTSE Small Cap (ex IT) index since its July 2007 launch.

The LGIM UK Smaller Companies Alpha Fund, run from Legal & General Investment Management Ltd's offices in the City, is a long-short equity fund focusing largely on UK listed companies with a market capitalisation of under $2 billion. The fund uses a bottom up approach where stocks are selected on the basis of fundamental analysis, both qualitative and valuation. It manages $46m, has returned +7.23% YTD (to June), +13.99% since inception and the portfolio manager is Rod Oscroft.

Great stock picking and sensible sector bias The returns have come from great stock picking and sensible sector bias with a low net exposure which has remained close to zero, said L&G manager Steve Leach, in ......................

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