New York-based Aperture Investors has launched its short-duration hard currency bond fund in the UAE.
The Aperture Investors SICAV - New World Opportunities fund aims to preserve capital while leveraging opportunities in over 75 emerging market countries.
In line with the company’s dogma of performance-linked fee structure, the fund has consistently outperformed its benchmark since inception. In 2020, it beat most emerging market debt and equity benchmarks.
‘The fund showcases a unique ability to go long and short through derivatives in credit, FX, interest rates, and equity-linked securities. The combination of strategies helps the fund offer investors one of the few all-weather EM strategies in a Ucits format,’ said CIO Peter Marber.
The fund’s ability to hedge and go short has also helped it perform through the pandemic with considerably lower volatility and drawdown compared to many actively managed EM funds.
The fund is managed by Marber himself having previously ran similar strategies at Loomis Sayles and HSBC. To do it effectively, the CIO has built a team of four analysts supported by four traders, including two former colleagues from Loomis Sayles that he has worked with since 2013.
‘Given the fund’s appealing low volatility, short duration and dividend yield features, we expect to see continued interest in our strategy within the UAE market,’ Marber said.
He particularly believes that the fund can be a good fit to several types of institutional investors, including local private banks, insurance companies, sovereign wealth funds and pensions funds.
‘With the strong performance achieved so far for this year, which is certainly considered a volatile one, we expect to see increased interest from such investors in the UAE.’
Contrary to popular belief, obtaining regulatory approvals was a simple and straightforward process. Taking about a few weeks, Marber said that the main challenge to getting registered for most managers is the first step of finding a local promoter—a private bank, for example—who is interested in promoting the fund to their clients.
‘Following several positive discussions with a key local bank, they expressed an interest in being the local promoter for Aperture Investors SICAV - New World Opportunities.
‘After signing the undertaking with the local bank and completing compliance-related procedures, we applied to register the fund through Emirates Securities & Commodities Authority (SCA) and received the approval within a few weeks,’ he added.
Should this fund be well-received in the UAE, Aperture looks to partner with local promoters to register the funds five other liquid funds in the country. As local investors continue to search for yield and diversification, Marber sees robust potential in the market.
Echoing the global market sentiment, the CIO conveys a cautious outlook for the rest of the year.
‘Global growth may be stalling, while the US races may result in complications that linger beyond election day on November 3rd. Fortunately, there are some V-shaped rebounds in Asia—particularly in China which may grow by 2+% for 2020. Possible second wave lockdowns for Covid-19 and the US elections set a cautious tone for the last quarter.’
Looking forward to 2021, Marber said that some vaccine and treatment solutions to Covid-19 should help a global recovery and create opportunities in commodity-linked countries hit hard by pandemic slowdown this year.