Sunday, 29 May 2016
Last updated 1 day ago
Dec 4 2007 | 8:10am ET
After spending the last 12 months researching alternative energy hedge funds, Systematic Absolute Return is ready to roll out a dedicated environmental fund of hedge funds in January. The SAR Environmental Fund is a global and unleveraged vehicle, targeting returns of above 15% net for investors, and is set to launch with assets of between US$25 million and US$50 million.
The firm estimates that the universe of environmental hedge funds now includes approximately 70, with the vast majority having track records of 18 months or less and showing “sustained growth in both the number of players and strategies emerging in the space.”
“We’re kind of the first movers in this space in that a lot of other funds of hedge funds around that are doing more socially-responsible investing,” said Andrew Perry, director of business development Zurich, Switzerland-based SAR. “Those are typically long-only and aren’t hedged against market movements so we’re quite unique in that sense.”
The Environmental Fund will initially invest in 10 underlying managers utilizing a variety of green strategies, including renewable energy, clean technology, carbon finance, water, agricultural and timber projects, as well as ecological microfinance. It will have exposure to European, U.S. and Asian managers. Co-founder Arne Schmidt is the portfolio manager for the fund.
“Some of them are trying to do funky things, like shorting polluters and long environmental companies, which is not the perfect hedge, but it’s interesting that they’re trying it and making money off of it,” said Perry.
The Environmental Fund charges a 2% management fee and a 20% incentive fee with a $500,000 minimum investment requirement.
SAR was founded in 2001 by Schmidt and Michael Ahrndt as a single-manager hedge fund and expanded into funds of hedge funds in 2003. The firm is currently managing $150 million in total assets.