Columbia Threadneedle Investments Launches Multi-Strategy Absolute Return Fund

Jul 20 2016 | 10:51pm ET

Columbia Threadneedle has launched a new UCITS-compliant multi-asset absolute return strategy.

The new fund, named Threadneedle (Lux) Diversified Alternative Risk Premia Fund, is designed to capture the excess returns arising from exposure to market anomalies, otherwise known as alternative betas or risk premia, across equities, fixed income, credit, currencies and commodities, according to the company.

In addition, it will seek to engage all major investment factors - value, style, curve, carry, short volatility and liquidity.

The fund’s launch comes after regulatory approval in by the CSSF in Luxembourg, where the fund is domiciled in Columbia Threadneedle’s liquid alternative SICAV. It will be managed by head of alternatives William Landes and portfolio managers Marc Khalamayzer and Joshua Kutin, and run out of the firm’s Boston offices. 

The fund’s liquid risk premia exposures will be tactically adjusted where macro events are believed to influence the holdings, the company’s statement continued. By not being market directional, the portfolio will seek a low correlated to major asset classes such as equities and bonds, a volatility target of 7.5% and target outperformance of 7 to 10% per annum gross over rolling three-year cycles. 

“This strategy offers many of the risk premia attributes present in multi-strategy hedge funds at a much lower cost,” said Landes, who is also deputy head of investment solutions for Columbia Threadneedle Investments. “Now that tools have been developed which allow financial market anomalies to be cost-effectively packaged, alternative risk premia strategies present an attractive investment solution for institutional investors.”

Initially available to institutional investors, high net worth individuals, private banks and family offices in Luxembourg, the company plans to register the fund in the UK, Austria, Belgium, Finland, France, Germany, Italy, the Netherlands, Singapore, Spain, Sweden and Switzerland, pending regulatory approval in each nation.

London-based Columbia Threadneedle Investments is a global asset management group providing a broad range of actively managed investment strategies and solutions for individual, institutional and corporate clients around the world. Owned by Ameriprise Financial, the company manages $464 billion of assets across developed and emerging market equities, fixed income, asset allocation solutions and alternatives as of March 31, 2016. 

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