Empiric Launches MLP-Focused Fund

Aug 16 2012 | 1:53pm ET

New York-based Empiric Asset Management has launched a long/short fund focused on energy Master Limited Partnerships.

The Empiric Strategic Income Fund, with $15 million AUM, was up 10.51% in July, bringing its total returns since its March 2012 inception to 17.32%. It’s managed by Jeff A. Baehr.

The fund hopes to outperform MLP indices while taking “significantly less” exposure than traditional buy and hold strategies in the sector. On average, Baehr expects 50% monthly turnover, 30% average net exposure and 75% average gross exposure.

The Empiric team has worked together since 2004 and launched its flagship Empiric Market Neutral Fund in 2008. That vehicle trades MLPs in a market neutral framework. The new fund will benefit from “models and existing infrastructure” developed for the flagship.

Baehr says the Strategic Income Fund distinguishes itself from the market neutral vehicle in that it takes directional exposure. "It’s based on the premise there are particular inflection points to be involved in MLPs and other times not to be," Baehr told FINalternatives in an e-mail. "Market Neutral was always invested and did not take net exposure."

The Strategic Income Fund strategy “combines qualitative analysis and intuitive quantitative techniques while relying on fundamental-based data to determine the attractiveness of companies in the universe.”

The new fund carries the standard 2 and 20 fees. Minimum investment is $1 million although smaller amounts may be accepted at the manager's discretion. Baehr says the fund, within its current parameters, has a capacity of $400 million.

The auditor is WeiserMazars, administrator is Swiss Financial Services, prime broker Merlin Securities and the custodian is JPMorgan Chase.


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