OMGI Adds New Style Premia Fund To Liquid Alts Stable

Nov 28 2016 | 7:47pm ET

Old Mutual Global Investors (OMGI) is prepping the launch of a new liquid alternative style premia fund.

The new UCITS-compliant vehicle will launch in December and be named the Old Mutual Style Premia Absolute Return Fund, according to the company. It will be domiciled in Ireland as part of OMGI’s existing liquid alternative lineup, which includes a wide suite of systematic products aimed at addressing demand from investors for products that invest in uncorrelated strategies. OMGI has significant experience in this space, currently managing £7 billion in hedge fund strategies.

The new long/short fund will have a volatility target of 8% and aim to deliver uncorrelated, positive total returns on a rolling twelve-month basis, the company said. It will invest across a range of systematic investment styles, or style premia, including core underlying styles of value, quality, momentum and carry, across equities, fixed income and currency asset classes. 

The fund will also use OMGI’s proprietary statistical arbitrage strategy, seeking to provide additional diversification benefits and downside protection during ‘risk-off’ environments. This functionality allows for low correlations to other style premia during drawdown markets, OMGI said, which should appeal to investors concerned about the crowding risk often associated with style premia products.

Leif Cussen, who has worked on OMGI’s systematic alternative products since joining the business in 2005, will be the fund’s manager. Cussen was also involved in developing the company’s statistical arbitrage strategy. He will be supported by portfolio managers Paul Simpson and John Dow both of whom have significant experience in developing and managing liquid alternatives products, OMGI said. 

“The fund gives investors access to the diversifying benefits of four core systematic styles across multiple asset classes,” said Cussen in a statement. “In addition, it utilizes our proven proprietary statistical arbitrage capability to further enhance diversification and mitigate crowding risks typically associated with style premia exposures”

Founded in 2012, OMGI is the asset management unit of £119 billion London-based manager Old Mutual Wealth, which is in turn part of financial services conglomerate Old Mutual Group. The firm managed approximately £29 billion in liquid and illiquid investment strategies of September 30, 2016.

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