Kepler Partners LLP has raised $81m via its new UCITS platform, Kepler Liquid Strategies (KLS), for a global equity beta neutral fund. This is the first sub-fund of the KLS ICAV, which is a Dublin domiciled UCITS structure designed to give investors access to high quality managers selected by the team at Kepler Partners.
The fund, KLS Zebra Global Equity Beta Neutral, began trading on June 30th and saw significant interest from investors across Europe, despite the chaos in financial markets around the Brexit referendum.
Kepler has appointed Connecticut based Zebra Capital Management LLC as investment advisor on the fund, who will manage the portfolio based on their established investment process and philosophy. The KLS Zebra Global Equity Beta Neutral fund mirrors a strategy run by Zebra Capital in an existing offshore hedge fund. As a beta neutral strategy, it is designed to avoid the kind of volatility which markets have been experiencing in recent weeks. The new fund targets a net return of 7-8% per annum over a market cycle with a volatility of 5-6% per annum.
The underlying strategy is typically made up of 650 long and 450 short equity positions and uses a unique ‘popularity factor’ developed by the Zebra team which includes former Yale Professor Roger Ibbotson, who set up Zebra Capital in 2001. The core theory revolves around the idea that fundamentally strong but unpopular stocks tend to outperform fundamentally weak but popular companies. Ibbotson was described by the FT this year as the ‘pioneering analyst of the equity risk premium’ and the ‘godfather of smart beta’.
Georg Reutter, head of research at Kepler Partners, said: “Given the current uncertainty in global markets, we feel it is a good moment to be bringing a beta neutral strategy to the market. We are very pleased that our research based approach has led us to partnering with Zebra Capital as the first fund on the KLS platform.”
Laurie Robathan, head of sales, added: “Kepler has raised $1.3bn for UCITS fund clients since 2010 and, after biding our time for some years, it is exciting to have now made the logical step into this space by launching our own dedicated UCITS platform”. “We are very pleased to be working with a group of Zebra’s calibre and their total commitment as a firm to this project has been clear from the outset. Given the turmoil of recent weeks, the success of this launch is a clear signal from the market that this is the right fund at the right time.”
KLS Zebra Global Equity Beta Neutral Fund has an annual fee of 1% and a performance fee of 10%.
For Alicia Miguel Serrano
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