The Luxembourg-domiciled fund will invest in US equities and will employ an absolute-return strategy. AB said the fund will seek long-term capital appreciation, with downside protection through a process of “fundamental analysis and macro insights”, combined with an unconstrained investment approach.
It is managed by Kurt Freuerman who joined the company in June last year from New York-based hedge fund manager Caxton Associates. Freuerman will be supported by five analysts.
In February, AllianceBernstein launched its first fund for Freuerman, the Select US Equity Portfolio which focuses on large and mid-cap US stocks.
“Last year was a turbulent one for US equities that created stiff headwinds for active managers, but given the current attractive valuations, we think stocks have the potential to continue to rise,” said Feuerman. “Even if we see some slowing economic growth, it does not necessarily mean bad times ahead for stocks. However, it will have a major impact on which types of stocks will outperform and we need to be flexible to adjust our portfolio accordingly.”
The company said stock selection in the portfolio will emphasise long-term fundamentals, with flexible short-term adjustments made according to market conditions. Investment selection focuses on companies the team sees as having:
- potential for earnings growth on a 3-to-5-year time horizon;
- strong management teams and;
- understandable, transparent business models.
AllianceBernstein added that the investment team selects stocks they believe will be impacted positively, for instance, by dissipation of investor fear around the stock or shareholder-friendly corporate actions like dividend payments and share buybacks.
The fund usually holds between 60 and 120 stocks and can take short positions on single stocks or an index.