Matt Gaden

Janus Henderson Investors is expanding its offering to New Zealand institutional investors by launching a New Zealand Dollar denominated version of its Global Multi-Strategy Fund.

The Janus Henderson Global Multi-Strategy Fund – Institutional NZD seeks to achieve a positive absolute return regardless of market conditions through a broad range of diversified alternative investment strategies, as well as using the manager’s skill to balance low correlation between the strategies and enhancing risk-adjusted returns for investors.

Janus Henderson says making the fund available in NZD helps protect local investors from cross currency volatility between the Australian and New Zealand dollar.

Unlike other alternatives products that might only employ a single strategy, the Janus Henderson Global Multi-Strategy Fund – Institutional NZD is made up of seven internally managed strategies.

Six of the strategies seek to identify opportunities in what the fund deems are ‘normal’ market conditions, and the seventh strategy, a dedicated protection strategy, seeks to deliver returns in troubled market environments where volatility is rising and where other strategies typically underperform.

The seven 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 derivatives markets
6. Fixed income, currency and commodity relative value: invests in fixed income, currency and commodity relative value opportunities.
7. Portfolio protection: seeks to mitigate left tail risk through a multi-faceted protection strategy.

​David Elms, Co-Portfolio Manager and Head of Diversified Alternatives at Janus Henderson Investors said “Our philosophy is that diversification works well in up markets but can be unreliable in down markets. You only have to look back as far as March 2020 when investor panic caused risk assets to fall in a synchronised manner. This fund addresses those types of challenges by having a protection strategy that is the mirror image of the diversified return-seeking strategies we use to generate returns in more normal markets.

“An all-weather fund denominated in New Zealand dollars will give our NZ clients greater peace of mind when market conditions are at their most volatile.”

The overall investment strategy is co-managed by London-based Elms, and US-based Portfolio Manager, Steve Cain. The pair are supported by a Diversified Alternatives team of 22 specialist investment professionals based in Australia, the UK and US, boasting an average 19 years of industry experience and 12 years at Janus Henderson Investors.

The newly launched fund will aim to outperform its benchmark, the Reserve Bank of NZ official cash rate, by 7% per annum (before fees) over rolling three-year periods.

Matt Gaden, Head of Australia at Janus Henderson Investors, added: “The fund re-confirms our commitment to the New Zealand market, as we tailor one of our flagship funds towards the needs of local investors.

“Janus Henderson is committed to providing opportunities for both institutional and retail investors when and where it makes sense to best suit respective needs.”

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The Fund offers exposure to a diversified portfolio of internally managed hedge fund strategies, while seeking to deliver absolute returns with low correlation to traditional asset classes.

Co-managed by David Elms and Stephen Cain, based in London and Denver respectively, and supported by a global team of specialist portfolio managers, the Fund draws upon Janus Henderson’s heritage and experience in multi-strategy investing, with the team managing over $11.6bn (USD) in assets globally.

Zenith considers the breadth of Elms’ and Cain’s trading experience to be highly compatible with the investment approach. In its report, Zenith states, “In our opinion, the quality of the two Lead Portfolio Managers and the access to differentiated hedge fund strategies in a highly liquid and cost-efficient format are key competitive advantages.

“Elms has extensive experience in managing equity-based, long-short strategies, while Cain has traded volatility and macro-based strategies across a number of senior investment management roles.”

“We acknowledge that the depth of opportunities across the strategies provides JHI with ample levers to outperform through the cycle. An attractive feature of the underlying strategy mix is the inclusion of a ‘portfolio protection’ sleeve, which is implemented with the objective of preserving capital and balancing market risk and correlations with traditional asset classes.

“In our opinion, the team’s ability to manage the sleeve with low ongoing cost is a key competitive advantage.” the report further noted.

Matt Gaden, Head of Australia, comments: “Investors in Australia are demanding a wider range of performance drivers in their portfolios to help them ride out this financial market instability. When we launched this highly successful global strategy in Australia earlier this month, it was important for it to be well understood by the marketplace. The Zenith coverage will go a long way to highlight the unique characteristics and benefits of the Fund for Australian investors.

“The COVID-19 crisis is forcing investors of all types to also rethink risk and investors are likely to make or increase allocations to funds which have demonstrated their ability to weather the prevailing volatile market turbulence. We’re seeing strong initial interest from Australian institutional investors and financial advisers in the Fund as recent gains have been compelling and the Fund has demonstrated the ability to help investors through this period of extreme volatility.”

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%.

It is available on HUB24 platform via the IDPS investment menu, as well as available directly from Janus Henderson, with an aim to add greater platform availability over the coming months.

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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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