Pictet launches UCITS III European long/short equity fund

The launch follows the successful track record in this strategy as shown by performance of Corto European Fund, a Cayman Island registered equity long/short fund launched in August 2006 and has since produced a net annualised return of 7.6% in Euros, compared with -4.6% for the MSCI Europe index on a similar basis (1).

Investment team

The investment team comprises Nils Francke and Philippe Sarreau, senior portfolio managers at Pictet Asset Management, and equity analyst David Dufour. Nils and Philippe have been investing together in a long/short strategy for five years and in the European market for over 12 years. The team believes that an actively managed long/short portfolio offers the opportunity for the best risk adjusted return for investors in the European equity markets.

Aim of the fund

The fund aims to achieve long term capital appreciation combined with a degree of downside protection. PTF(LUX)-Corto Europe adopts a flexible approach and places a strong emphasis on stock-picking through fundamental research and contact with company managements. The managers focus on identifying changes that create triggers for long-term performance at a stock or sector level, including new management or changes in investor behaviour, and has a mid-cap bias (companies with less than EUR5 billion market cap) (2).

Senior managers' comments

Senior investment manager Nils Francke comments, "The strategy aims to offer an asymmetric return profile, enabling investors to capture most of the upside market performance while protecting capital against the risk of declining markets."

Senior investment manager Philippe Sarreau adds, "In the aftermath of the credit crisis, and with the Greek crisis as a catalyst, the bull market in the smaller EU nations has come to a halt. Instead, growth and profitability are moving to the centre and north of Europe, where companies will benefit from the global recovery and a weaker Euro".

Registration

The PTF(LUX)-Corto Europe fund will be registered in major European countries during 2010. The fund will initially be available to institutional and private investors in EUR, and hedged USD and CHF denominated share classes, and in other currencies according to demand.

(1) Data from end August 2006 to 28 February 2010.

(2) Bias to mid cap stocks means clear over-representation over time- the fund does not exclusively invest in mid cap companies.