Man GLG To Launch New Long/Short Absolute Return Fund

Man Group’s Man GLG unit is prepping a new long/short mid-cap equity fund for launch in June.

Named the U.K. Absolute Return Fund, the new vehicle will be managed by value specialist Jack Barrat, according to a Citywire article, and will utilize the same investment process as the firm’s £650 million Undervalued Assets fund.  

The new fund is reportedly targeting an annual return of 10% and will concentrate on the mid-cap segment of the U.K. equity market. On the short side, it will target companies with overstretched valuations and hedge the portfolio from extreme market events such as electoral shocks, the article added. 

Management fees will be 90 basis points, with a 20% performance fee over a LIBOR hurdle, assuming regulatory approval for the structure. 

The fund’s genesis comes from the value team naturally finding overvalued companies in their search for undervalued ones, and needed a vehicle to monetize both within an absolute return approach. To this end, mid-cap stocks – which typically have a wide dispersion between under- and overvalued companies – are an attractive segment. 

Man GLG is the $28.8 billion discretionary investment management business of Man Group PLC, which traces its roots back to the 1783 founding of a sugar coop and brokerage company. The London-based company managed $80.9 billion as of December 31, 2016 through its five investment management businesses: Man AHL; Man Numeric; Man GLG; Man FRM and Man Global Private Markets. It is the largest listed hedge fund manager in the world.