Lombard Odier Investment Managers (LOIM), the $54 billion institutional asset management arm of the Lombard Odier Group, has built a long/short strategy across asset classes aimed at improving risk-adjusted returns with a low correlation to traditional investments.
LO Funds – Alternative Risk Premia, a long/short Fund*, is designed to help in today’s environment of declining markets and uncertain prospects, where investors find the search for returns increasingly hard. Investors also need liquidity and cost-efficiency from their portfolios and know that exposure to traditional asset classes may correlate just when they need to be diversified.
By applying an Alternative Risk Premia approach with the ability to go systematically long and short, LOIM offers a strategy aimed at enhancing risk-adjusted returns from traditional asset classes in a stable way within an investment structure that aims to provide robust portfolios, however markets perform.
“Alternative Risk Premia used to be available only from hedge fund firms,” said Carolina Minio-Paluello, deputy Chief Investment Officer of LOIM. “We can offer similar benefits for investors’ portfolios in a cost-effective and systematic way. Our teams have the expertise and experience to implement long/short strategies using these techniques.”
The risk premia draw on two complementary sources of return: income and trend. Income tends to deliver a regular yield flow in stable and improving markets while trend premia have the ability to go against the market and aim to reduce exposure to market drawdowns. An example of an income risk premia is ‘carry credit’ which aims to exploit the yield difference between the investment grade and high yield corporate universes. In unchanged market conditions, investors may benefit from the higher credit spread of the high yield. A trend premia uses momentum signals within defined time frames to take long or short positions in a diversified set of assets.
“Five years ago we developed a risk-based portfolio construction infrastructure, initially for long-only, diversified Smart beta,” said Alexandre Deruaz, Head of Smart Beta Solutions at LOIM. “We can now also apply it to our long/short approaches.”
LOIM manages $5 billion in a range of Smart beta fixed income, equity, commodity and hedge-fund replication strategies, launched since 2009. LO Funds - Alternative Risk Premia, launched 6 August 2014, already manages more than $50 million on behalf of clients.
LOIM’s Geneva-headquartered business, a unit of the Lombard Odier Group, managed $54 billion on behalf of clients at the end of June 2014. LOIM’s managers seek to deliver performance by identifying sources of risk and return through absolute return, Smart beta and high conviction strategies. LOIM offers a range of solutions including risk-based asset allocation, thematic equity investments, convertible bonds, absolute return as well as single-manager hedge funds.
*The Fund adds short exposure through the use of derivatives. It is licensed for distribution in Austria, Belgium, France, Germany, Italy, Liechtenstein, Luxembourg, the Netherlands, Spain, Sweden, Switzerland and the UK.
Tel.: +41 (22) 709 31 57
This document is provided for information purposes only and does not constitute an offer or a recommendation to purchase or sell any security or service. It is not intended for distribution, publication, or use in any jurisdiction where such distribution, publication, or use would be unlawful. This document does not contain personalized recommendations or advice and is not intended to substitute any professional advice on investment in financial products. Before entering into any transaction, an investor should consider carefully the suitability of a transaction to his/her particular circumstances and, where necessary, obtain independent professional advice in respect of risks, as well as any legal, regulatory, credit, tax, and accounting consequences. This document is the property of LOIM and is addressed to its recipient exclusively for their personal use. It may not be reproduced (in whole or in part), transmitted, modified, or used for any other purpose without the prior written permission of LOIM. This document contains the opinions of LOIM, as at the date of issue.
Neither this document nor any copy thereof may be sent, taken into, or distributed in the United States of America, any of its territories or possessions or areas subject to its jurisdiction, or to or for the benefit of a United States Person. For this purpose, the term "United States Person" shall mean any citizen, national or resident of the United States of America, partnership organized or existing in any state, territory or possession of the United States of America, a corporation organized under the laws of the United States or of any state, territory or possession thereof, or any estate or trust that is subject to United States Federal income tax regardless of the source of its income.
Issued by Lombard Odier Asset management (Europe) Limited which is authorized and regulated by the Financial Conduct Authority.