Wed Jan 4, 2012 10:26am EST
* Veteran’s boutique RiverCrest rolls out second fund
* Targets absolute returns of 12-15 percent
* Long-short strategy to be run by former M&G managers
By Anjuli Davies
LONDON, Jan 4 (Reuters) – RiverCrest Capital, the
boutique fund manager run by financiers John Beckwith and Rod
Barker, believes it has found the formula to generate equity
returns while minimising macro risk and hopes to tempt wealthy
euro zone investors to play along.
The European Equity Alpha Fund, one month old this week, is
managed by former M&G star managers Giles Worthington and Tim
Short, who developed the long-short, market-neutral product
while working for the asset management arm of insurer Prudential
.
The Dublin-domiciled fund was incubated and internally
tested at M&G for 18 months but when the group decided not to
launch it externally, Worthington and Short were hired by
RiverCrest.
The fund is targeting absolute returns of 12-15 percent with
a target volatility of 5-8 percent. It will charge an annual
management fee of 1.6 percent plus a performance fee of 20
percent. Minimum investment has been set at 100,000 pounds
($156,400).
RiverCrest CEO Rod Barker believes the fund will appeal to
high net worth investors looking for somewhere smart to park
their money in volatile markets, which can deliver potentially
lucrative returns on carefully selected portfolios.
“It’s very, very difficult for stockpickers in the current
environment due to such high degrees of correlation,” Barker
told Reuters. “For example BMW doesn’t trade like BMW, it trades
like Greece or the euro, so stock selection is key.”
More than half of absolute return funds designed to offer
investors a positive return regardless of market conditions
lost investors money in 2011, data from Morningstar shows.
Barker believes that his team’s exceptional track record –
Worthington was in the top quartile of fund managers for 8
consecutive years — will enable the fund to navigate through
current macroeconomic headwinds.
The fund’s initial investor focus is on partners, friends
and families. Once it has been approved for sale across the
European Union, it will target wealth management platforms,
IFAs, institutional investors and offshore fund of funds looking
for more liquid strategies and capital preservation.
“We are focused on very, very liquid stocks with market
capitalisations of at least $20 billion, so eventually we could
run $2-3 billion of assets under management quite easily,”
Barker said.
This is the second fund launch for RiverCrest Capital since
its formation a year ago when Beckwith’s private investment
vehicle Pacific Investments went into business with Barker, a
former partner at International Standard Asset Management.
Minority partners include Michael Spencer, CEO of ICAP, the
world’s largest interdealer broker and Jim Pettigrew,
non-executive director of Hermes, Aberdeen Asset Management and
RBC Europe.
John Beckwith has a long history in the asset management
business, with ventures including the Lion Trust, River &
Mercantile, Nevsky Capital and most recently Thames River
Capital, which was sold to F&C for 33 million pounds in
2010.
In October, RiverCrest launched a Cayman-domiciled global
equity fund managed by Alastair MacLeod and Peter Simon,
formerly of Landsdowne Partners.
Barker said over the next few years the fund planned to add
3 or 4 more teams with a proven performance track record.
