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Komfie Manalo, Opalesque Asia for New Managers:

Most investors are concerned about a fund's capacity limit, but finding out when a fund could be growing beyond it's optimal size is not that straight-forward and a lot will depend on the strategy. "Being a quant manager, we are able to model capacity", said Oliver Gaunt from Saemor Capital at the latest Opalesque Netherlands Roundtable.

"We are currently managing approximately half a billion dollars. We trade actively and use leverage. Having modeled our capacity, we believe it is up to four times our current asset level. We are a highly liquid strategy, our universe is around 1000 stocks, investing in the most liquid cash equities in Europe, which makes our strategy very scalable."

Transparency is also important, he said. Saemor shows its investors where the funds are invested and discussed with them why they have positions in individual stocks. "We choose factors that have a behavioural or economic rationale to them and rank all our stocks based upon the combination of these factors," he said.

Estimating impact of asset growth on performance is paramount

Gildas Le Treut from ABN AMRO Clearing agrees that estimating fund capacity is key and that estimating the......................

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