Speaking to InvestorDaily, Bennelong chief executive Jarrod Brown said the ASX100 strategy was ‘soft closed’ when it reached $200 million in funds under management (FUM) and has since reached $400 million due to market performance and additions from existing investors.
The new ASX200 strategy was launched this month and will only be open to wholesale investors with $500,000 and above, said Mr Brown.
But somewhat surprisingly, not all of the investors in the ASX100 market neutral fund are institutions, he said.
“If you look at the existing strategy we have a heap of individual SMSF investors and they’ve come through financial planners – it’s just that that they’re ‘sophisticated’ and they meet the wholesale investor test,” he said.
Since the existing strategy was closed to new investors there have been investors ‘knocking on the door’, said Mr Brown.
There is a “good pipeline” of investors interested in the new fund, and $4 million came in on 1 January 2014, he said.
“I don’t expect people to flood through the doors, but people haven’t had access to the capacity for a number of years, so hopefully there’s some appetite,” said Mr Brown.
The new ASX200 fund will have lower leverage than the ASX100 fund, he said.
The existing fund can be levered up to five times, and has averaged about 4.2 times over its lifetime. The ASX200 fund will only be levered up to a maximum of three times – probably 2.5. You’d expect higher volatility, but that will be offset by the lower leverage,” said Mr Brown.
The new fund will be managed by Bennelong Long/Short Equity director Richard Fish and senior portfolio managers Sam Shepherd and Tim Hall (the latter having made the move from Acorn Capital last November).
Market neutral strategies take equivalent long and short positions in companies in the investable universe to effectively negate the effect of the market. The manager can then take either long or short positions on selected stocks.
Bennelong Long/Short Equity is one of the four boutiques within the Bennelong Funds Management stable. Bennelong currently has $5.75 billion in funds under management.
