To do so, GHI has surrounded itself with leading entities in each of these fields. In Liquid Alternatives, we offer our investors a universe of managers previously researched and filtered by Kepler Partners. GHI gives direct access to the managers of those strategies wrapped in a UCITS format.
With regard to Premia Strategies, we offer investors access to the Popularity metric developed by Zebra Capital Management in various forms, such as US and Global equities as well as Absolute Return. It is important to note that this metric is the result of years-long research implemented for the first time in 2010.
“O telescope, instrument of knowledge, more precious than any sceptre”
– Johannes Kepler
Founded in 2008, Kepler Partners is an FCA regulated financial services company that specializes in the Alternative UCITS and Investment Trust sectors. Kepler Liquid Strategies platform (KLS) is a Dublin domiciled UCITS ICAV set up in 2016 to offer investors access to a select group of high-quality asset managers in UCITS. Kepler also hosts conferences and events for professional investors. Kepler’s marketing leading research website https://absolutehedge.com is free for allocators to use and helps to inform those who are interested in this area of the market.
GHI recommends the KLS Funds to investors in part because of Kepler’s extensive quantitative and qualitative approach to identifying highly talented managers for the Kepler Liquid Strategies Platform and its access to those managers.
GHI, through its relationship with Kepler Partners, offers investors and prospects up-to-date information on the KLS Funds and direct access to Kepler Partners’ underlying managers through face-to-face meetings and video and/or telephonic conference calls.
KLS Arete Macro Fund
The KLS Arete Macro Fund is a Global Macro Strategy with a bias towards China. The strategy aims to deliver high risk-adjusted returns while maintaining a low correlation with all major asset classes. The investment process is centered around a top-down macro-analytical framework that incorporates the rapidly changing economic environment around the world, especially within China. The fund is managed by Will Li, CIO and Arete co-founder, supported by Arete’s Investment team. Investments are implemented across multiple asset classes and in liquid instruments only. This disciplined process and replicable strategy have a strong focus on managing risk through different market environments.
- Hong Kong-based discretionary macro manager founded in 2012.
- The strategy was launched in 2012 through an offshore fund established in 2012 and fully replicable in UCITS.
- The strategy has a 0.99 Sharpe Ratio since the inception of the strategy with a very low correlation to most asset classes.
- The UCITS Fund was launched in July 2018.
KLS Scopia US Long Short Market Neutral Fund
- The firm was founded by Jeremy Mindich and Matt Sirovich in 2001.
- It holds a concentrated portfolio, with around 20 longs and 30 shorts.
- Its bottom-up fundamental highly research-intensive, multi-sector process typically produces a very differentiated portfolio.
- Since inception, both the long and short books have delivered significant alpha and in equal proportions.
- Low leverage.
- The UCITS Fund was launched in August 2023.
KLS Athos Event Driven Fund
- Hong Kong-based fund manager founded in 2012 by Matthew Moskey and Fred Schulte-Hillen.
- The strategy primary focus is on short-dated and liquid hard catalyst events in Asia.
- The firm´s master fund has delivered a Sharpe Ratio of 1.2 since inception with low correlation to other asset classes.
- The UCITS Fund was launched in April 2021.
KLS Niederhoffer Smart Alpha UCITS Fund
The KLS Niederhoffer Smart Alpha UCITS Fund is a short-term managed futures strategy that trades 20 global fixed income and FX markets. The strategy is systematic in nature but is grounded in computational neuroscience, based on the principle that markets are predictable in the short term because their movements are impacted by the psychology and biases of market participants. These behavioral biases are more acute during periods of market stress and volatility, with the strategy consistently long of realized volatility.
- R. G. Niederhoffer was founded in 1993 and is one of the pioneers of short-term managed futures.
- Invests exclusively in liquid futures instruments across the fixed income and FX markets.
- Absolute returns regardless of the market environment, especially strong in volatile markets.
- Smart Alpha UCITS Strategy is a carve-out of the FX and Fixed Income components of their flagship Diversified Program, which was launched in 1993.
- The UCITS Fund was launched in July 2020.
KLS Ionic Relative Value Arbitrage Fund
The KLS Ionic Relative Value Arbitrage Fund seeks to identify and exploit arbitrage opportunities across multiple asset classes, where a relative pricing or implied volatility discount exists. The Fund focuses on four core arbitrage strategies including Convertible Arbitrage, Equity Arbitrage, Volatility Arbitrage, and Credit Arbitrage. The combination of these sub-strategies contributes to the Fund having a non-correlated return profile relative to traditional asset classes. The flexible mandate and investment process enable the Fund to take advantage of the best opportunities, as well as market dislocations to generate additional alpha. The arbitrage strategies often benefit from increased volatility, while the Fund’s long volatility exposure is designed to provide some downside protection during significant market selloffs.
- New York-based fund manager that was founded in 2006. The co-founders, Bart Baum and Dan Stone had worked together at Highbridge Capital Management for over 10 years.
- The strategy was launched in 2013, and since 2018 has been managed in a managed account for a UCITS multi-manager vehicle.
- The strategy has a low correlation to other asset classes.
- The UCITS Fund was launched in July 2020.
KLS Emerging Markets Funds
The Emerging Markets management team, led by Ed Butchart, joined Kepler at the end of 2020 from Sloane Robinson. Ed has over 25 years of emerging markets experience. The key features of the Emerging Markets team’s investment philosophy are the following:
- An agnostic portfolio that sits at the intersection of a top-down and bottom-up approach.
- The portfolio is built around three categories of stocks: Compounders, Dynamic Change and Deep Value.
- The concentration of positions improves the investment discipline and potentially enhances returns. The portfolio typically consists of 30-35 stocks.
The team manages two funds:
KLS Corinium Emerging Markets All Weather Fund
A directional emerging markets strategy with exposure and hedges that vary according to the market environment and the CIO´s macro view. The Fund’s primary objective is to achieve and preserve an above-average real return on capital over the long term.
- Strategy managed since 2013.
- Long track record in Emerging Markets stock selection with a strong emphasis on bottom-up analysis combined with top-down country selection.
- The UCITS fund was launched in May 2017.
KLS Corinium Emerging Markets Equity Fund
A Long-Only emerging markets strategy that is 100% invested at all times.
- Long track record of stock selection in Emerging Markets with a strong emphasis on bottom-up analysis combined with top-down country selection.
- The UCITS fund was launched in December 2021.
KLS SGA US Large Cap Growth Fund
A Long-Only US equity strategy. SGA identifies companies that meet the fundamental characteristics of growth and quality. It focuses on stocks of companies with above-average long-term earnings and cash flow growth prospects, attractive current valuation, and that promote environmental and social characteristics.
- SGA, based in Stamford, Connecticut, was founded in 2003 and has USD 22 billion under management and 30 employees.
- Clearly defined bottom-up investment process with a strong focus on valuations.
- Concentrated portfolio of 25-30 stocks.
- It invests in companies with 2-3 times the earnings growth of the Russell 1000 Growth but with 40% less volatility.
- Strong team alignment: low team turnover, 50% of employees own shares, no individual owns more than 5% of shares.
- This strategy is expected to outperform other growth strategies in an environment of higher inflation and tighter future monetary policies.
- The UCITS fund was launched in January 2022.
“People are more influenced by a story than by a fact. Stories have too much impact in comparison with facts.”
— Roger Ibbotson
Founded in 2001, Zebra Capital Management is a Connecticut-based Systematic, Behavioral and Fundamental asset manager. Zebra combines academic research and analytical methods with direct trading, risk management, and operational experience.
All of their strategies are rooted in the metric of Popularity that is the result of deep research in the Behavioral Finance arena. The investigation concludes that less Popular stocks have historically outperformed the overly Popular ones with a lower level of volatility.
Zebra Capital implements the Popularity metric in three distinct forms: Absolute Return, Long Only and Premia.
GVC Gaesco Zebra US Small Caps Low Popularity Fund
GVC Gaesco launched with Zebra Capital as Advisor the GVC Gaesco Zebra US Small Caps Low Popularity Fund. GVC Gaesco, with more than 60 years of history and headquartered in Barcelona, is one of Spain´s leading independent asset managers. It covers Spain, the rest of Europe and Asia for its suite of funds. The adoption of Zebra’s popularity metric for its US Small Cap Fund comes after a long time of following Professor Ibbotson’s work.
- The strategy follows Zebra Capital´s investment philosophy in US Small Caps by investing in less popular stocks with strong fundamentals.
- The strategy was launched in 2010 and has an annualized information ratio vs. the benchmark of 0.57.
- The UCITS fund was launched Q3, 2023.
- The fund manages a Long Only US Small Cap Low Popularity strategy that uses Zebra’s proprietary and behavioral metrics.
- The fund´s objective is to generate consistent excess returns with a lower beta and volatility than the benchmark index (Russell 2000 Index TR).