The world of alternative investments is at a crossroads. As markets defy expectations and liquidity concerns take centre stage, investors find themselves forced to rethink how they deploy capital in an increasingly complex environment.
An imminent big-milestone birthday has the Brilliant Investment Group (BIG) executive chair thinking about what he’d like to see this year.
UK’s Atlantic House spots income gap, brings uncorrelated fund to local market
UK boutique investment manager Atlantic House is putting its strategy where its long-held conviction is.
After highlighting the need for proactive allocation strategies to give investors real and robust diversification just a few weeks ago, the $A7.5 billon manager has made the move to open its Uncorrelated Strategies Fund to Australian investors.
According to a release put out by the Atlantic House investment team, its Uncorrelated Strategies Fund aims to deliver positive returns in both regular and stressed market conditions by maintaining a low correlation to traditional asset classes. On a more granular level, the fund invests “systematically” into multi-asset derivatives strategies, “providing investors with a diverse and highly differentiated source of return”.
The focus on derivatives strategies is an important point of separation for Atlantic House, and one that has helped its UK team build the home fund to its current levels in just three years. Drill down further into the fund’s strategic allocation, and there are three key focus areas.
- Tail Strategies: Insurance-like strategies designed to generate significant returns during steep market downturns, while keeping holding costs low to minimise the impact on the fund’s performance in stable markets.
- Trend Strategies: Following trends across equities, bonds, FX and commodities markets that are capable of producing positive returns in both rising and declining markets.
- Diversifiers: Utilising long-standing structural mispricing in derivatives markets, these strategies aim to provide consistent returns throughout the market cycle.
The tail and trend strategies are essentially linked together under a long volatility strategy umbrella. These long volatility strategies aim to profit from extreme market moves.
On the diversifier side, the strategies tend to include volatility carry, dispersion and non-directional carry strategies.
For investors across the spectrum – but especially sophisticated investors with broader portfolios – direct uncorrelated strategies funds like this are becoming increasingly common allocation. As they’ve gotten more sophisticated, these strategies have gotten better at achieving their goal of protecting portfolios while still achieving benchmark-or-better returns.
According to Atlantic House co-founder Andrew Lakeman, investors just want the surety of “substantial” returns during turbulent times and steady gains during stable periods.
“The Uncorrelated Strategies Fund is designed to meet these requirements through a transparent, repeatable and predictable investment process,” Lakeman said. “All within a daily liquidity framework.”
