RWC Partners Speeds Launch of New Allwright-Frost Fund

Jan 18 2011 | 8:47am ET

London-based RWC Partners has pushed up the launch of Peter Allwright and Stuart Frost’s fixed-income and currency fund to February 2011. The UCITS III RWC Enhanced ARC Fund had been scheduled to launch at the end of Q1 2011.

Said Dan Mannix, head of business development at RWC Partners:

“Given the yield environment we have had a number of requests from our investors to accelerate the launch timetable for Peter and Stuart’s new fund. Investors are both seeking higher returns from their fixed-income portfolios and are fearful that we are entering the start of a rate-rising environment. Peter and Stuart’s approach allows returns to be made from the fixed income and currency markets in a yield tightening environment.”

Allwright and Frost joined RWC Partners in October 2010 from Threadneedle where they were the joint portfolio managers of the Threadneedle Target Return Fund, Absolute Return Bond Fund and the hedge fund, Macro Crescendo Trading Fund.

RWC Enhanced ARC will be managed to target cash +6% on an annualized basis. The managers have historically managed both unconstrained macro funds and more conservative funds targeting cash +3%. To target cash +6% in the new fund, the managers anticipate using approximately twice the risk budget used in the more cautious funds.

In October 2010, Allwright and Frost assumed responsibility for the UCITS III RWC Cautious ARC fund which has a target return of 3% over cash rate on an annualized basis.

Allwright and Frost’s approach involves core allocations to short duration, high-grade fixed income securities, supplemented by alpha strategies that take advantage of investment opportunities in the fixed income and currency markets. As well as the investing in the currency markets, these alpha strategies are able to take long and short positions in the bond markets. This allows the overall strategy to make positive returns through the market cycle, including yield tightening environments.

The Enhanced ARC Fund will be a UCITS III fund with daily dealing, offering retail and institutional share classes in EUR, GBP and USD.  The fees will be 1.5% for the retail share class and 0.8% for the institutional share class. Both share classes with carry a performance fee of 15% on returns over LIBOR or equivalent. RWC Partners will seek to have the fund locally registered across Europe including Italy, Germany, Luxembourg, the United Kingdom and Switzerland.

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