Old Mutual Global Investors to launch style premia fund
Old Mutual Global Investors (OMGI), part of Old Mutual Wealth, has today announced its intentions to launch the Old Mutual Style Premia Absolute Return Fund (“STAR”) at the beginning of December.
The Ireland-domiciled UCITS fund will be the latest addition to the business’s suite of systematic liquid alternatives products, addressing demand from investors for portfolio-diversifying products that invest in strategies with uncorrelated returns to traditional markets. OMGI has significant experience in this space, currently managing £7bn in hedge fund strategies.¹
STAR will have a volatility target of 8% and aims to deliver positive total returns on a rolling twelve month basis, uncorrelated to bond and equity markets.
The strategy seeks to capture returns via exposure to a range of systematic investment styles, or style premia, generating long-term results across markets and asset classes. The core underlying styles are value, quality, momentum and carry, across equities, fixed income and currency asset classes.
In addition STAR utilises OMGI’s proprietary statistical arbitrage strategy, seeking to provide additional diversification benefits and downside protection during ‘risk-off’ environments.
The inclusion of this functionality is a significant differentiator to existing products, as its returns can exhibit low correlation to other style premia during drawdown markets. This should appeal to investors that are concerned about the crowding risk often associated with style premia products.
STAR’s lead manager, Leif Cussen, has worked on OMGI’s systematic alternative products since joining the business in 2005, including co-developing OMGI’s statistical arbitrage strategy. Leif will be supported on the fund by Paul Simpson and John Dow as portfolio managers, both of whom have significant experience in developing and managing liquid alternatives products.
In addition to the management team, a style premia investment committee will provide an additional level of support, oversight and governance to ensure that the fund remains in line with customer expectations.
Leif Cussen, comments:
“STAR is designed to meet a growing demand for cost-effective systematic strategies. The fund gives investors access to the diversifying benefits of four core systematic styles across multiple asset classes. In addition, it utilises our proven proprietary statistical arbitrage capability to further enhance diversification and mitigate crowding risks typically associated with style premia exposures”
Donald Pepper, managing director of alternatives, adds:
“Old Mutual Global Investors has a strong heritage in managing low correlation alternatives, having launched its first quantitative equity market neutral hedge fund in December 2001. STAR is designed to have a very low correlation to traditional assets. We believe the strategy will be a good diversifier to market driven exposures in clients’ portfolios. Further, given its long/short orientation, we see the strategy as a complement to hedge fund strategies, but at a significantly reduced cost.”
¹ As at 30 September 2016
Leif Cussen joined Old Mutual in 2005 and is a portfolio manager in the alternatives unit. In 2008 Leif became a portfolio manager in the Quantitative Strategies Group where he co-managed a range of systematic global equity market neutral and long-only funds. In this role he was involved in a number of key successful product launches including the Old Mutual Global Equity Absolute Return Fund, the team’s first market neutral UCITS fund, and a European 130-30 fund. Prior to joining the alternatives team he co-managed the Global Statistical Arbitrage Fund. Leif has a BSc in Computer Science from Royal Holloway College, University of London and is a CFA Charterholder.
Paul is a veteran of capital markets. Starting initially in risk management with a focus on fixed income products he switched to equity proprietary trading in the early 1990s. Paul spent many years gaining experience in major houses such as Deutsche Bank and UBS, trading a wide range of equity market neutral and arbitrage strategies. At HSBC he ran the program trading desk in addition to multi-strategy proprietary trading, gaining exposure to algorithmic trading and advanced execution technology. Switching to investment management he was portfolio manager on a successful merger arbitrage fund at DPFM, later concentrating on statistical arbitrage, with two years as a portfolio manager at Millennium Partners. He joined Old Mutual in 2006, opening first the European Statistical Arbitrage Fund, and then in 2007 its successor the Global Statistical Arbitrage Fund. He was appointed head of alternatives at OMGI in 2009, having managerial responsibility for quantitative multi-factor investment processes in addition to statistical arbitrage, with investment activities spanning hedge funds, alternative and long only UCITS funds. He was appointed director of investments in January 2015. Paul is chair of OMGI’s Investment Committee (InCo), and co-chair of OMGI’s Quarterly Investment Committee (QIC). He is also a member of OMGI’s Executive Committee, and sits on the Boards for the firm’s Cayman, UK, and Irish funds. Paul has a BA in economics from Cambridge University (1980) and an MBA from the University of Bradford Management Centre (1986).
John has held senior positions in the proprietary trading groups of a number of major European banks including UBS and HSBC and was a fund manager at two leading hedge funds prior to joining Old Mutual in 2006. At Old Mutual he was co-manager on the European Statistical Arbitrage fund (launched 2006) and Global Statistical Arbitrage fund (launched 2007). John is a specialist in statistical arbitrage trading, has designed and implemented automated trading strategies, and has extensive knowledge of algorithmic trading and execution. John has a BSc in Physics from the University of Sussex and an MBA in Finance from Cass Business School.
Donald joined Old Mutual Global Investors in December 2012. He is managing director of alternatives and a member of the Style Premia Absolute Return Investment Committee. Donald began his career at Goldman Sachs in 1987, initially in the fixed income, currencies & commodities division, where he was head of European money market sales, before moving to prime brokerage, specialising in equity relative value, global macro and credit strategies. In 2003 Donald joined Merrill Lynch as managing director of prime brokerage for EMEA. From 2008-10 Donald was head of hedge funds at New Star Asset Management and Henderson Global Investors, where his role included being co-portfolio manager of a fund of hedge funds, where he allocated to strategies including quantitative equity market neutral and quantitative global FX. From 2010-12 Donald was investment director at TT International. Donald is a graduate of the Queen’s College Oxford, where he read philosophy, politics and economics, and is a CFA charterholder.
Notes to editors:
Old Mutual Global Investors:
Old Mutual Global Investors has grown strongly since its creation in August 2012 and now has assets under management of £29 billion (as at 30 September 2016). The team consists of 273 industry professionals, including a team of 69 investment professionals. As part of Old Mutual Group it has a strong financial parent to support the activation of its business strategy. Old Mutual Global Investors is the asset management division of Old Mutual Wealth. To find out more information please go to: www.omglobalinvestors.com
Old Mutual Wealth
Old Mutual Wealth is a leading wealth management business in the UK and internationally, helping to create prosperity for the generations of today and tomorrow.
It has an adviser and customer offering spanning:
- Financial advice delivered by the Intrinsic network in the UK and AAM Advisory in Singapore
- Platform based wealth management and protection products delivered by Old Mutual Wealth in the UK & Italy* and Old Mutual International globally
- Asset management solutions delivered by Old Mutual Global Investors
- Discretionary investment management delivered by Quilter Cheviot.
Old Mutual Wealth oversees £119 billion in customer investments (as at 30 September 2016).
Old Mutual Wealth is part of Old Mutual plc a FTSE 100 group that provides life assurance, asset management, banking and general insurance. Old Mutual is trusted by more than 19.4 million customers across the world and has a total of £342.7 billion assets under management (as at 30 June 2016).
*Old Mutual Wealth announced the sale of Old Mutual Wealth Italy to Ergo Italia on 9 August 2016. The transaction is pending completion.
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