Aquila Capital, established in 2001, offers alternative managers access to the infrastructure of the Aquila Group, which specialises in alternative investments. This enables associated managers to focus on investment management while Aquila Capital takes care of the administrative, executive, risk, legal & compliance, structuring, sales, marketing and PR functions.
Market neutral equity strategy with daily liquidity
The AQC1 Algert Global Equity Market Neutral Fund* („Fund“) is a market neutral fund. It is based on the same investment philosophy and process as Algert Global‘s flagship Global Equity Market Neutral offering, which was launched in 2005. The Fund seeks to deliver returns that are independent of global equity markets and other sources of systematic risk by exploiting inefficiencies that result from various behavioural and cognitive biases. The Fund blends fundamental analysis with a systematic, repeatable investment process to implement long/short positions across global equity markets. Three primary stock selection strategies (Relative Value, Quality and Catalyst) are used to rank the relative attractiveness of each stock within a broad investment universe. Each strategy is tailored to specific markets and individual stock characteristics. These rankings are combined with proprietary measures of risk and trading costs in order to construct a highly diversified, risk-controlled market neutral portfolio.
*The official name of the fund is AQC1 Sicav – Algert Global Equity Market Neutral Fund
The Fund’s investment philosophy is grounded in the core belief that there are exploitable inefficiencies in global equity markets. These inefficiencies evolve through time and vary globally and are optimally exploited via a disciplined, systematic investment approach. The Fund’s Investment Manager aims to capture mispricings stemming from cognitive and behavioural tendencies that bias investors’ assessment of a company’s earnings potential by applying three stock selection strategies:
- Relative Value Strategy: The market misestimates company growth rates.
- Quality Strategy: The market inefficiently forecasts the sustainability of firm earnings.
- Catalyst Strategy: The market often reacts irrationally to new information.
Algert Global believes in a disciplined and systematic implementation of fundamental insights to identify mispriced firms. This forms the basis for the quantitative stock selection and portfolio construction processes used to implement the portfolio. Long and short exposures are balanced by industry, sector and country groups as well as other proxies of systematic risk, such as size, liquidity, currency and balance sheet characteristics.
The result is a diversified portfolio of approximately 500 positions (250 long and 250 short), which are held for 6 to 12 months on average, with a gross exposure between 300 to 450% and a net exposure between +/- 10%.
Algert Global LLC is located in the US (San Francisco) and was established in 2002. It manages approximately USD 2 billion across absolute return and benchmark-relative active strategies.
Peter Algert, Ph.D. – over 20 years of investment industry experience, with previous roles including Head of Research, Co-Head of Portfolio Management for US Equity & Head of Portfolio Management for US growth strategies at Barclay’s Global Investors.
The core investment team has worked together since 2004 and each member can demonstrate an academic background in quantitative investing.
The strategy has also become more accessible. In the early years, hedge funds were quite exclusive but now the advent of liquid alternatives means they can be accessed through UCITS in Europe, 40 Act funds in the US, exchange-listed closed end funds, and some active ETF launches are expected. But hedge funds restricted to variously defined institutional/sophisticated/qualified/accredited investors also attract allocations from collective, social savings pools.
Peter Algert, CEO and Chief Investment Officer at Algert Global LLC, explains the investment philosophy behind the AQC1 Algert Global Equity Market Neutral Fund.