Prime Capital AG’s (“Prime Capital”) absolute return UCITS Fund receives a strategic investment from NewAlpha Asset Management (“NewAlpha”), the Paris-based global emerging manager acceleration specialist.
With close to a decade experience in managing alternative investment portfolios, Prime Capital launched the Gateway Target Beta UCITS Fund in September 2015, with the aim to offer investors a liquid, regulated, cost efficient and reliable absolute return strategy.
NewAlpha will invest a significant amount of capital into this strategy, via a dedicated fund, structured and managed on behalf of large European institutional investors that are committed to increasing their strategic allocation to innovative investment strategies.
The Gateway Target Beta UCITS Fund pursues a systematic strategy to generate absolute return, relying on two pillars: a long traditional risk premia portfolio with a focus on tail risk management and a tactical long/short portfolio. It targets an annual return of cash + 5% with a volatility averaging 6% and a positive equity beta in the range of 0.2 – 0.4, while offering daily liquidity.
Commenting on the strategy, Vincent Weber (Prime Capital’s head of research) said, “Developing the strategy, we leveraged the unique perspective offered by our hedge fund investing activities. When focusing on very liquid, high capacity strategies, you find that there are two broad approaches which produce consistent returns. The first one consists of being long risky assets while limiting tail risks and where you tactically allocate between cash and risky assets as your expectations of risk vary. The second approach consists of taking multiple diversified positions across asset classes by exploiting momentum effects while also considering the yield of holding a particular asset, which is often referred to as carry. Due to their correlation characteristics both approaches complement each other nicely from a risk and return standpoint.”
The fund implements its strategy using a broad spectrum of exchange traded futures on equity indices, fixed income securities and currencies as well as swaps on major credit indices. Moreover, the fund does not use derivative structures to overcome particular UCITS related restrictions, such as the trading of commodities. “We did not simply want to have a UCITS stamp on the fund’s fact sheet, but rather be fully compliant with the spirit of this regulatory framework”, adds Werner Goricki, CIO of Prime Capital.
Commenting on the strategic deal, Werner Goricki adds, “I am glad that our R&D efforts to apply our investment expertise in a highly liquid format succeeded in the development of the Target Beta strategy. The Gateway Target Beta UCITS Fund is an innovative addition to our existing offering of classical hedge fund strategies and we view having on board an experienced investor like NewAlpha as an independent seal of approval regarding the thoroughness of our investment process and operations. Furthermore, the seed capital will increase the attractiveness of the fund and accelerate the growth with future investors.”
Antoine Rolland, CEO of NewAlpha, added: “More and more investors are showing an appetite for UCITS funds that follow a quantitatively driven absolute return strategy. The Target Beta strategy offers many benefits, including diversification and the fund has performed well, even more so given recent market volatility. Prime Capital and NewAlpha share common values and both organizations have an entrepreneurial corporate culture. We are very enthusiastic about this new investment with Prime Capital.”
Originally seeded by Clay Asset Management, an independent Paris-based private wealth manager, the fund is a sub-fund of Société Générale Securities Services’ (SGSS) Gateway UCITS Funds PLC umbrella structure. Prime Capital in their role as Sub-Investment Manager provides discretionary investment management for the fund.
About NewAlpha Asset Management
NewAlpha Asset Management provides qualified investors with a privileged access to the most innovative and dynamic firms of the financial industry thanks to a full range of products and services.
On behalf of its clients, NewAlpha selects, finances and accompanies innovative entrepreneurial projects, mainly in asset management but also in sectors that are closely related, such as financial technologies or services for investment managers.
Europe’s leading specialist in emerging manager seeding for institutional investors, NewAlpha has concluded more than 60 strategic partnerships and invested more than 1 billion euros in French and international investment management boutiques. NewAlpha has been one of the world’s most active allocators in this space with more than $500 million allocated through 17 partnerships since 2012.
NewAlpha was awarded many times, directly and indirectly through its affiliated managers.
NewAlpha Asset Management is regulated by the Autorité des Marchés Financiers (AMF) and is a subsidiary of La Française Group and OFI AM.
About Prime Capital
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Prime Capital AG is an independent financial services provider and asset management firm, focusing on institutional clients. The company specializes in Alternative Investments, in particular in Absolute Return, Infrastructure Investments and Private Debt. Prime Capital was founded in 2006 and currently employs 55 people in Frankfurt, London and Luxembourg. The company’s regulators are BaFin in Germany, CSSF in Luxembourg and FCA in the UK. As per 30th of June 2016, Prime Capital has around EUR 5.1 billion Assets under Management, managed on various platforms.
For further information, quotes or interview requests please contact:
Prime Capital AG
Andreas Kalusche, Board of Directors
Tel: 0049 69 9686 984 36
andreas.kalusche@primecapital-ag.com