GAM Launches New Retail Hedge Fund
Tuesday, March 30, 2010
Asset management firm GAM and former Bank of England Monetary Policy Committee member Sushil Wadhani have joined forces to launch a new hedge fund for retail investors.
The GAM Star Keynes Quantitative Strategies Fund will be launched in early April. The fund will have a UCITS III structure, and will be domiciled in Ireland. The aim is for the fund to make a net return of around 12%-15% per year.
According to Wadhani, “Human nature gives too much weight to recent events, and clings to beliefs in the face of contrary evidence. Our current economic and market outlook suggests macro uncertainty, which can create a ‘herding’ effect among investors.” By using quantitative models, the fund will look to break away from such “herding” instinct among investors.
“It is important to know when to run with the herd and when to break away before it has a chance to stampede,” said Wadhani. “Our quantitative models enable emotion to be removed from the decision-making process and can therefore exploit mispricings resulting from behavioral biases.”
Wadhani’s own offshore fund, managed by his London-based firm Wadhani Asset Management, has proved successful, posting a 30% gain in 2008 despite overall equity market falls in light of the financial crisis. Over the past five years, the offshore fund has produced average yearly returns of 12%-13%.
However, the fund was open only to institutional investors, with a minimum investment of USD1m. Under the new fund being launched, private European investors can invest a minimum of USD10,000. |
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