Fund Focus: RBR Capital Adds UCITS Twist To Rhine Alpha Fund

Mar 26 2012 | 2:44pm ET

Swiss-based RBR Capital’s Rhine Alpha and Rhine Alpha Stars funds have returned over 10% per annum since 2005—including returns of 44% and 63%, respectively, in 2009.

RBR’s chief risk officer, Chris Gibson, told FINalternatives the two funds employ “pretty much the same” European equity long/short strategy.

“[T]hey both generally have a little bit more of a core on the German-speaking nations, I’d say somewhere about 40-50% of all holdings would be in…Switzerland, Germany and Austria,” Gibson said during a recent interview. “[T]he Rhine Alpha Stars…has a slightly more concentrated profile.”

And there is at least one other difference between the two funds—the Rhine Alpha is becoming a UCITS vehicle while the Rhine Alpha Stars fund remains Cayman-based.

“It’s in the process,” said Gibson, “in the next couple of weeks we should be finalizing the foundation of the umbrella structure [of] which Rhine Alpha will be a sub-fund…[Rhine Alpha Stars is] going to remain in the Cayman…[I]n the end, we’re going to run them very closely on a similar strategy, similar leverage and the only real differentiator between the two will be the fact that one will be offshore and one will be onshore.”

RBR Capital and the Rhine Alpha Fund were launched in 2003 by Rudolf Bohli, the former head of equities research for the boutique broker Bank am Bellevue (part of the Swiss Bellevue Group). In 2005, in response to “popular demand and desire for greater returns,” RBR launched the more “robust” Rhine Alpha Stars.

RBR runs CHF 25 million in the Rhine Alpha Fund and CHF 75 million in the Rhine Alpha Stars. At any given time, the funds hold 35 to 45 positions, although Gibson says they’d “rather stick around the lower band.” Roughly two-thirds of those positions are on the long book. The firm, he says, is sector agnostic.

Gibson says the shift to the UCITS framework poses little problem for the Rhine Alpha Fund “because actually we are running it at the moment as if it were UCITS.” The aim of the shift, he says, is “to get out there and have a good offering to, let’s say, pension funds and what have you who are more interested in having that liquidity.” The two funds currently offer 30-day liquidity, as a UCITS fund, the Rhine Alpha will offer weekly liquidity.

Both funds are off to a good start in 2012, after posting losses in 2011. The Rhine Alpha Fund, which ended 2011 down 12%, is up 16.5% YTD in February while the Rhine Alpha Stars Fund, which ended 2011 down 11.7% was up 12.5% YTD in February.

“[Some] of our biggest positions, which have worked incredibly well this year, have been the banks,” said Gibson. “We’ve managed to have something like 3% attribution due to our bank holdings.”

The funds offer U.S. dollar, euro and Swiss Franc share classes and carry a minimum investment of 250,000 in the applicable currency. Both carry the standard 2 and 20 fees. The Rhine Alpha Fund is administered by Credit Suisse Fund Services and audited by Deloitte S.A.. The Rhine Alpha Stars Fund is administered by Citco Fund Services and audited by Deloitte & Touche.


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