Threadneedle launches European equities absolute return fund

A pioneer in the regulated absolute return space, leading international asset manager Threadneedle Investments (Threadneedle) has today launched the Threadneedle (Lux) European Absolute Alpha Fund responding to client appetite for a UCITS European equities absolute alpha product.

The fund will be invested in Pan-European equities and is managed by Paul Doyle.

Threadneedle has been managing absolute return strategies for more than 10 years and currently manages in excess of €1.6 billion (as at 31 Dec. 2011) across a broad range of strategies. The Threadneedle (Lux) European Absolute Alpha Fund utilises the same successful process and resources as the Threadneedle Apex European Fund (and previously the Threadneedle European Crescendo fund), in which high-conviction stock selection has been the dominant driver of returns with a strong focus on company analysis and valuation. This is combined with a top-down overlay to manage sector exposures while retaining focus on monitoring risk. The portfolio will primarily take long and short positions in European equities and will aim to generate the majority of performance from stock selection.

Paul Doyle, who joined Threadneedle in 1995, has over 20 years' experience in European equities. As manager of both retail and institutional portfolios and of the Threadneedle Apex European fund (and previously the Threadneedle European Crescendo fund), Paul has a proven track record of generating alpha under different market conditions. Since launch in 2000, the European long/short strategy generated net pro-forma cumulative performance of 82.2% (vs. a performance of -10.8% for the index) whilst limiting annualised volatility to 5.6% (compared to 21.4% for the index).

Threadneedle's 23-strong European equities team has an excellent long-term track record of outperformance and manages close to €28.0bn AUM across portfolios. 73% of Threadneedle's European Equity funds outperformed in 2011 and  100% outperformed over 3, 5 and 10 years. The team works closely with Threadneedle's 120 investment professionals across all asset classes and regions.

Paul Doyle, manager of the Threadneedle (Lux) European Absolute Alpha fund, said: "Since we first launched the Threadneedle European Crescendo fund in 2000 and the European Apex fund in 2010, we have demonstrated that this particular high-conviction stock picking strategy has been successful in navigating both bear and bull market cycles whilst limiting volatility of returns. We are now pleased to offer investors access to the same strategy in a regulated, liquid and transparent format though the Threadneedle (Lux) European Absolute Alpha fund.

"Despite the negative news flow surrounding Europe recently, we believe that it is an exciting time to look at European equities as we are able to find many companies at compelling valuations.  The opportunity to deliver absolute returns through fundamental and valuation analysis with high conviction long and short positions is considerable."

Campbell Fleming, Head of Distribution at Threadneedle, said: "With over 10 years managing absolute return funds, Threadneedle has a strong reputation and a proven track record for delivering outperformance.  Our clients have indicated a great appetite for a product that will seize opportunities to capitalise on European equities while interest rates remain at historic lows and Eurozone uncertainty has depressed equity valuations.  Our European equities capabilities and the experience of our investment teams mean we are well placed to take advantage of these opportunities within a framework of careful risk management."