Janus Henderson Investors launches diversified alternatives global multi-strategy fund

From

Matt Gaden

Janus Henderson Investors (ASX / NYSE: JHG) has announced the launch of a global multi-strategy fund investing in diversified alternative assets.

The fund, named the Janus Henderson Global Multi-Strategy Fund, is co-managed by David Elms and Stephen Cain, based in London and Denver respectively, and supported by a global team of specialist portfolio managers based in Australia, the UK and US. It will draw upon Janus Henderson’s heritage and experience in multi-strategy investing, with the team managing over $11.6bn (USD) in assets globally. Currently run as a hedge fund domiciled in the Cayman Islands it will now be available in an Australian managed investment scheme structure, the fund will be available in Australia to wholesale retail and institutional investors. Today’s launch makes the strategy more accessible to investors across the world.

The fund offers investors diversified exposure to alternative assets, while seeking to minimise risk through separate portfolio protection strategies. It has minimal correlation with the performance of the major asset classes, offering investors diversified protection as part of a balanced portfolio.

The fund invests in a range of asset classes including equities, fixed income, their associated derivatives and commodities – across a complementary set of investment strategies. The Fund also uses a portfolio protection strategy, which seeks to generate uncorrelated positive returns during periods of market stress and enables the other strategies to weather short-term market stresses. The six investment strategies are:

  1. Convertible arbitrage: aims to capitalise on mispricing of convertible bonds
  2. Event driven: looks to exploit pricing inefficiencies around corporate events or capital structures
  3. Equity market neutral: seeks to deliver alpha by investing long and short across pan-European equities
  4. Price pressure: aims to generate returns through the provision of capital to liquidity opportunities
  5. Risk transfer: looks to capitalise on supply/demand-driven imbalances in the derivatives market
  6. Portfolio protection: seeks to mitigate left tail risk through a multi-faceted protection strategy

The fund aims to deliver positive absolute returns, regardless of market conditions, and to outperform the Bloomberg AusBond Bank Bill Index by 7% per annum (before fees) over rolling three-year periods. It aims to do so with low levels of volatility, expected to be 4-8%.

David Elms, Head of Diversified Alternatives, comments: “Diversification works well in up markets but is unreliable in down markets, like March 2020, when investor panic and liquidation induces correlation and all risk assets fall in a synchronised manner.  We address this issue by running a diversified set of protection strategies that aim to provide positive returns in down markets and are the mirror image of the diversified “risk on” strategies we use to generate returns in normal markets.”

Matt Gaden, Head of Australia, comments: “We continue to see investors in the region demand a wider range of performance drivers in their portfolios to help them ride out this financial market instability. We are therefore focused on ensuring Australian investors can access the best of Janus Henderson’s suite of global investment offerings.

In times like these, an active investment approach becomes even more critical, as portfolio managers evaluate opportunities likely to arise from volatility and adjust portfolios accordingly.  The COVID-19 crisis is forcing investors of all types to rethink risk and diversified alternatives are one of the exciting areas where we are seeing increased appetite from our clients.

This new global multi-strategy draws upon our experience and expertise across the global business. The broad toolbox of strategies gives our experienced investment management team the flexibility to take advantage of opportunities through different market cycles, while mitigating risk exposure during volatile markets.”

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