Threadneedle Adds Seventh Hedge Fund; Smaller Cos. Fund Up Over 42%

Jan 11 2007 | 9:42am ET

UK-based Threadneedle Investments last week launched its seventh hedge fund, the European Smaller Companies Crescendo Fund, which is a long/short vehicle portfolio focusing on European small-cap stocks, with $13 million in initial equity.

The fund aims to produce double-digit annualized returns by exploiting the inefficiencies of the European smaller-cap market, with particular focus on a company’s purchasing power, according to the firm. It will seek to capitalize on the volatility of smaller companies, the convergence of European markets and the increasing appetite for leverage.

Dave Dudding, a European equity fund manager who joined Threadneedle in 1999, will manage the new hedge fund and will be assisted by Philip Dicken, who manages the Threadneedle Pan European Smaller Companies Fund.

“The European small-cap market is young and inefficient, throwing up many opportunities for long and short strategies,” said Dudding. “As the widely varied European states continue to converge into a single euro zone, the political and corporate cultural differences remain vast and exploitable. One key investment theme to watch in 2007 is the resurgence of the IPO market with many smaller companies returning to bond and stock markets to raise cash.

“We can expect this trend to play out for at least the next 10 years because the number of markets continues to grow, not shrink and this makes our stock-picking universe less efficient, not more,” he said.

The fund charges fees of 2/20 with a minimum investment requirement of £200,000, $250,000 or euros 250,000.

Small Company Fund Up 42.5% In First Year

In other firm news, the Threadneedle Pan European Smaller Companies Fund ended its first year of performance up 42.5 %. The fund was launched in November 2005 and is currently managing some £27.6 million (US$53.7 million).

“Smaller companies, particularly in continental Europe, are under-researched and therefore conceal value,” said Dicken, who manages the fund. “Thanks to a well-resourced team and a commitment to go out into the market and meet as many as 700 company managements each year, we have been able to unlock a good deal of that potential.”

Going forward, Dickens is bullish on the fund’s potential returns. “As the European economy approaches its late cycle phase, many growth stocks are still trading on unjustifiably low valuations. The small cap arena is well stocked with attractively priced companies with excellent growth potential. I’m looking forward to unearthing many more opportunities in 2007,” he said.

Threadneedle was founded in 1994 and manages more than £70.7 billion (US$132.1 billion) in assets for a wide range of clients including pension schemes, insurance companies, private investors, corporations, mutual funds and affiliate group companies.


In Depth

Q&A: Neil Azous Talks Global Macro Investing

Nov 24 2014 | 12:41pm ET

Neil Azous is the founder and managing member of Rareview Macro, an advisory firm...

Lifestyle

Griffin Selling Chicago Apartment

Nov 26 2014 | 11:40am ET

Citadel Investment Group’s Kenneth Griffin is making clear to his estranged wife...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.