A recently-launched UCITS fund from the Germany-based investment house has won an investment.

Germany-headquartered Prime Capital said that an absolute return fund operating in a UCITS structure has received a “strategic investment” from emerging manager specialist firm NewAlpha Asset Management.
 
The amount of capital provided by NewAlpha, which is based in Paris, was not disclosed.

Prime Capital, regulated in Germany and the UK, launched the Gateway Target Beta UCITS Fund in September last year.

“NewAlpha will invest a significant amount of capital into this strategy, via a dedicated fund, structured and managed on behalf of large European institutional investors,” Prime Capital said in a statement.

The fund has a “systematic strategy to generate absolute return”, blending a traditional portfolio that manages risk of extreme “tail” events and a tactical long/short portfolio. It targets an annual return of cash plus 5 per cent with a volatility averaging 6 per cent. The fund offers daily liquidity.

Commenting on the strategy, Vincent Weber, Prime Capital’s head of research, said: “Developing the strategy, we leveraged the unique perspective offered by our hedge fund investing activities."

As part of its toolkit, the fund uses a range of exchange traded futures on equity indices, fixed income securities and currencies as well as swaps on major credit indices. It does not use derivative structures to overcome particular UCITS related restrictions, such as the trading of commodities. 

“We did not simply want to have a UCITS stamp on the fund’s fact sheet, but rather be fully compliant with the spirit of this regulatory framework,” said Werner Goricki, chief investment officer of Prime Capital.

Originally seeded by Clay Asset Management, an independent Paris-based private wealth manager, the fund is a sub-fund of Société Générale Securities Services’ Gateway UCITS Funds umbrella structure.

Prime Capital, in its role as sub-investment manager, provides discretionary investment management for the fund.