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B. G., Opalesque Geneva:
Amid the current market turmoil, this is our regular report on hedge funds and alternative asset managers who are bucking the trend.
Positive developments in TMT
Schroder GAIA Contour Tech Equity is up +10.8% YTD after returning +3.3% in March and +0.6% in April. A strong Q1 for the equity long/short fund was driven by the short book, returning 27%, with eight of the top ten contributors being shorts and all of the top ten detractors were longs.
The fund invests in both long and short positions in equity and equity-related securities issued by companies in or connected to the technology, media and telecommunications sectors. The fund runs with low net exposure, generally between +/- 25%, with exposure directed by bottom-up research and not via market calls, though during extreme times, the PM is more willing to actively manage the net (e.g. Q1-2020, moving from net long 20% to flat, brought down gross exposure and top 10 concentrations). The portfolio is traditionally built of more idiosyncratic and under-owned names, and not reliant on FANG stocks, helping to maintain a low beta compared to peers.
Moving out of the current environment, the PM believes this experience will meaningfully shape both consumer and corporate behaviour with many pre-existing trends likely to be accelerated, but also some new themes spawned, with areas on the radar being the retail and online consumer landscape, entertainment & content consumption, plus also a fresh corporate focus on fixed cost minimisation.
New York-based Contour Asset Management was founded in October 2010 when partner Brummer & Partners granted the mandate of the Tech equity long/short strategy (launched in December 2017) exclusively to Contour, which now has approximately $1.5bn AuM within the strategy. The PM (David Meyer) has over 20 years of buy-side experience, starting his career at Morgan Stanley covering software and IT companies, from which he became a technology analyst at Brummer and soon after becoming a PM for the Manticore Fund, which is now solely managed by Contour.
Market neutral in emissions
The Trium ESG Emissions Impact Fund is up +7.8% YTD after returning +9.4% in March and -2.4% in April. Launched in September 2019, this new fund returned almost 1% in 2019.
The fund is a discretionary equity market neutral strategy that seeks to deliver alpha with low correlation to other asset classes and existing ESG products. Portfolio manager Joe Mares proactively engages with companies on proposals as to how they can make measurable, meaningful reductions in their carbon emissions. Investments are made in the companies which have the potential to significantly improve their environmental footprint relative to both their peers and the broader European.
London-based alternative asset manager Trium Capital bought Sabre Fund Management, a boutique investment management firm also based in London, to expand its existing quantitative offerings and "create a new force in the quantitative alternatives world," Trium's co-head Donald Pepper said in a statement.
Inefficiencies in European small and mid-caps
The CS Small and Mid Cap Alpha Long/ Short Fund is up +7% YTD after returning -0.4% in March and +4% in April.
The equity long/short fund seeks to exploit the inefficiencies of the small and mid-cap markets in Europe with a focus on German-speaking countries. The portfolio aims to have lower volatility, less correlation with the equity markets, and better risk-adjusted performance than a long-only fund. Launched in July 2010, the fund is managed by Felix Meier at Credit Suisse Asset Management Ltd.
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Last issue of The Corona Fighters Report: Report 36.
Opalesque's Corona Fighters reports are open articles. To see all past reports, type Corona Fighters in our search engine: www.opalesque.com/index.php
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Disclaimer: This is not investment advice. Opalesque has not verified this information and gives no warranty of accuracy or completeness. Past performance is not indicative of future results. See our Terms & Conditions for more information.
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