Columbia Threadneedle Investments has launched a new, innovative absolute return strategy in form of the Threadneedle Diversified Alternative Risk Premia Fund, following regulatory approval by the CSSF (Commission de Surveillance du Secteur Financier) in Luxembourg.
The strategy is designed to capture the excess returns arising from exposure to market anomalies (the ‘alternative betas’ or ‘risk premia’) across all major asset classes (equities, fixed income, credit, currencies and commodities) and all major investment factors (value, style, curve, carry, short volatility and liquidity).
The daily liquid, transparent and diversified UCITS fund is managed by Dr William Landes, Marc Khalamayzer and Joshua Kutin, out of Boston, US, who between them have close to 50 years of asset management experience. The fund managers benefit from access to non-traditional sources of returns as well as macro inputs from Columbia Threadneedle’s wider asset allocation team, meaning that liquid risk premia exposures are tactically adjusted where macro events are believed to influence the holdings.
William Landes, Head of Alternative Investments & Deputy Head of Investment Solutions at Columbia Threadneedle Investments, said: “In the search to maximise and diversify their portfolio returns, institutional investors have often turned to multi-strategy or fund of hedge funds. This strategy offers many of the risk premia attributes present in multi-strategy hedge funds at a much lower cost. Now that tools have been developed which allow financial market anomalies to be cost-effectively packaged, alternative risk premia strategies present an attractive investment solution for institutional investors.”
Dominik Kremer, Head of Institutional Distribution in EMEA and Latin America at Columbia Threadneedle Investments, said: “We believe this is a truly unique offering in the marketplace. Our portfolio managers use advanced portfolio construction techniques, invest in a wide array of different risk premia across all major asset classes and combine this with an active, macro-driven tactical approach. In our minds, our strategy is an innovative solution for institutional investors seeking to both enhance portfolio returns and provide true diversification at a time when economic and financial conditions make investing increasingly challenging.”