Alex Wise

Select Fund Services (Select) has made Neuberger Berman’s Absolute Return Multi Strategy (ARMS) investment capability available to Australian investors, including the retail and self-managed superannuation fund market (SMSF), with the launch of the Neuberger Berman ARMS Trust.

“ARMS is a liquid alternatives, multi strategy option that seeks absolute returns through an active allocation to a select group of established hedge fund managers, diversified across strategy types and geographies,” says Neuberger Berman Australia managing director Lucas Rooney.

“The Neuberger Berman ARMS Trust accesses the investment expertise of Neuberger Berman’s existing ARMS investment strategy which has proved popular in the US and Europe, raising over $1.6 billion in funds under management in the past two years. We believe that these hedge fund strategies can play an important diversification role in investment portfolios.”

Head of Fund Services at Select, Alex Wise, commented: “As responsible entity for the ARMS Trust, we are proud to be working with Neuberger Berman on the launch of this exciting new investment solution into the Australian market. We have been working with Neuberger Berman for over a year and have absolute confidence in them as market leaders in liquid alternative investments.

“The recent period of low volatility has reinforced a foreboding for many investors familiar with the inherent cyclicality of investment markets. Investors are increasingly searching for lower volatility investments that offer portfolio diversification with low correlations to equities and bonds, and ARMS has delivered on these objectives,” Mr Rooney says.

The ARMS investment strategy was first launched by Neuberger Berman in the United States in May 2012 and then in Europe in October 2013. ARMS is managed by Neuberger Berman’s experienced Hedge Fund Solutions team, comprising 40 individuals based in New York and London and which has been managing hedge fund solutions since 2002.

“Unlike traditional hedge fund investments, the Neuberger Berman ARMS Trust offers daily liquidity, with daily pricing, along with improved portfolio transparency, right down to the stock level. It also offers lower investment minimums than typical hedge funds,” Mr Rooney says.

“Because we invest ARMS’ assets in each underlying investment strategy via managed accounts, we have visibility on all underlying positions, which helps us to manage and control the risk as well as allowing us to share this high level of transparency with our clients.

“Importantly, our ARMS investment capability provides investors with access to ‘real’ hedge fund strategies, which we believe are run by quality active hedge fund managers, and not the ‘hedge-fund-lite’ replication versions, used by some liquid alternatives funds.

“With historically lower levels of volatility than equity markets, and a low beta to equities and bonds, the ARMS investment strategy provides investors with access to high quality hedge fund managers at lower fees than typical hedge fund investments (and with no performance fees at any level), by virtue of our almost unique combination of extensive hedge funds research and large mutual funds presence,” Mr Rooney says.

“We expect the Neuberger Berman ARMS Trust to be sought after as a differentiated source of risk management and return for Australian investors’ portfolios,” Mr Wise concludes.

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