Steve Cohen alumnus Darren Starr (pictured) has launched a long/short fund targeting US stocks for Jupiter that aims to generate an absolute return over a 3-year rolling period, no matter the market conditions.
Starr was brought on board this April to help bolster the fund group’s liquid alternatives business. He is based in Jupiter’s London office.
Starr has 10 years’ experience managing US equity long-short portfolios across roles at UBS and Caxton. Between 2010 and 2012, he also worked at SAC Global Investors, the US hedge fund headed by billionaire Cohen, which was shut down by US authorities one year later after the group pleaded guilty to insider trading and was hit with a $1.2bn fine.
US political risks set to aid long-short fund
The Starr-led Jupiter US Equity Long Short fund will have a portfolio of around 40 to 60 companies based in, or conducting most of their activities in, the US.
It will hold both long and short positions to provide the flexibility to hedge against periods of falling equity markets. The fund will also look to have lower correlation to stock markets and limit the monthly volatility of portfolio returns. The net equity exposure of the fund will normally range between plus and minus 25% of net assets while the gross equity exposure is expected to average around 200%.
Starr said now was an exciting time to launch a product targeting companies in the US, a strong market which is plagued by political risks.
“The US equity market is delicately balanced with strong domestic economic conditions driving corporate earnings growth. On the other hand, ongoing disruption in many sectors as well as macroeconomic and political challenges present considerable risks.”
Fees and performance disappoint in liquid alternatives
Magnus Spence, Jupiter’s head of investments for alternatives, said the fund has been designed as an attractive alternative to funds in the sector which have frequently disappointed with their high fees and mediocrity.
“The universe of liquid alternatives has grown rapidly over the last few years despite generating fairly mediocre returns,” said Spence. “Many investors have been disappointed by the low levels of risk taking, the high fees and the elevated correlations with equity markets. The Jupiter US Equity Long Short Fund has been specifically designed to address these concerns. We believe it will be a valuable addition to the universe of liquid alternative funds.”
Charges on the Jupiter US Equity Long Short fund will range from 0.81% for class F shares to 1.77% for class L shares. With the exception of F class shareholders, investors will be charged a 20% performance fee on returns the fund achieves above 3-month US Libor.
The fund has no stated benchmark.
Source: Jupiter
