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Alternative Market Briefing

Global Return Asset Management ends Q1 up 19%

Wednesday, April 17, 2019

Bailey McCann, Opalesque New York:

New York-based Global Return Asset Management ended March up 1.4% extending its rebound and bringing year-to-date returns to 19.3%, net. The value investor said that it's moving back to cash as market conditions have moved outside of its parameters for investment.

In a letter to investors obtained by Opalesque, CIO Elliot Trexler said that the funds cash exposure was the lowest it had been in four years at the end of 2018. The fund's current cash balance is back up to approximately 18 percent after inflows and the reduction of several positions.

"Some investors, including me, wish we were always fully invested and had no cash balance," Trexler said. "But Q4 2018 and Q1 2019 demonstrate why we'll keep cash when necessary - we believe we can generate higher risk-adjusted returns by waiting to invest until the right opportunities become available."

Trexler's move back into cash and his decision to wait for better opportunities, tracks with sentiments from BlackRock CEO Larry Fink. In an interview today with CNBC, Fink said investors still have a lot of cash left to put to work. Many are viewing the current rally with caution and have maintained defensive positioning despite the rally in equities. Asset flows show a pivot to fixed income as well as significant cash positions. For value investors like Global Return AM, the rally has proven to be a good time to take profits and wait for new oppo......................

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