Fortis Investment Management Australia is set to launch a retail version of its Australian Long Short Equitised Fund in March this year.
It will be Fortis' third Australian equities retail product in Australia.
The firm already runs two long-only retail funds, the Australian Equity Fund and the Concentrated Australian Equity Fund.
"The long short product is not going to be as large as the other funds - we are going to cap it. By the virtue of its size we will be able to access alpha by more alpha opportunities," Fortis Investments head of Australian equities George Clapham said.
The cap would likely be set at around $500 million, Clapham said.
Fortis, which is owned by French bank BNP Paribas, has already been operating a wholesale version of the long short fund for more than four years.
But this fund is not listed on any platform and the launch of the retail fund will make it available to retail investors for the first time.
"It was purely for institutional and professional investors," Clapham said.
The existing wholesale version of the fund takes the S&P/ASX 200 index as its benchmark and has consistently outperformed the index since its inception.
Over the two years to 31 December 2009 the fund posted a net return of 4.0 per cent, compared to a return of -8.2 per cent by the index.
Last year the fund posted a return of 52.9 per cent, whereas the index returned 37.0 per cent.
"In the worst of the bear market we were up 12 per cent by the virtue of our short positions," Clapham said.
On average the fund will hold two-thirds long positions and one-third short positions on Australian equities.
Clapham said the fund would be different from existing long short funds in the market in that is has a wider range of shorting opportunities to choose from.
The Fortis long-only funds consist of a maximum of 35 stocks, compared to an average of 80 to 100 stocks in traditional funds.
"I'm not compromising my long positions, because I've got a greater field of opportunity on the short side," Clapham said.
.
