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GLG unveils ‘neutral’ financials fund

GLG, the discretionary investment manager of Man Group, has launched a Ucits version of its long/short financials strategy.

The Dublin-domiciled GLG Financials Alternative fund has a global mandate and targets absolute returns and low market correlation by investing in a portfolio of between 30 and 60 financials stocks.

Run by David Sanders and Stephen Holliday, the managers of the $70.9m (£44.2m) hedge strategy, the fund will be net market neutral overall. Sanders and Holliday will pick stocks by using proprietary in-house research combined with pro-active risk management.

Sanders says there is an abundance of market neutral opportunities within the financials sector owing to various macroeconomic, regulatory and stock-specific factors.

The manager says they plan to take advantage of the large number of capital raises, government stake sales and initial public offerings which are due to come to the market over the next few years.

“Our strong in-house expertise and analysis provides us with the tools to identify opportunities in a sector where there are relatively few specialists. This has enabled us to outperform, with a market-neutral approach, in what has been a turbulent market,” Sanders says.

“We are confident that we can continue this success and are happy to be able to bring the strategy to a wider client base.”

Rhodri Mason, the head of Ucits management at Man, says Ucits funds will remain a key area of focus for the group.

“We are pleased to be adding GLG Financials Alternative to our expanding range of absolute return Ucits funds, demand for which remains strong,” he says.

Minimum investment in the GLG Financials Alternative fund is £1,000.

The hedge fund – which was launched in May 2002 – has returned 4.31% over the year to February 29, according to GLG.

The strategy’s largest geographical overweight is to Europe ex-UK, with a 68.6% weighting, followed by Asia ex-Japan and North America with positions of 11.6% and 9.9% respectively.

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Barclays has questioned whether banks should be offering consumers complex products and has suggested a return to simple, “vanilla” product ranges.

At a Parliamentary Commission on Banking Standards joint committee hearing this week, Conservative MP Mark Garnier challenged Barclays as to why it thought interest rate swaps were suitable for small and medium sized businesses.

Barclays chief executive of corporate and investment banking Rich Ricci argued the products can suit some firms, but said a discussion was needed about whether banks should be offering complex products.

Ricci said: “What we have seen is when we do make mistakes it is incredibly expensive. We need to take a step back and ask whether we should just be offering a very vanilla, very simple set of products that customers can agree to and understand. And if they want something more bespoke we just tell them we do not do that. Those spectrums are on the table and I think it is important to consider this given how expensive some of these mistakes are.”

Ricci admitted there were “some cultural failings” within Barclays but said most staff “want to do the right thing”.

Barclays is one of 11 banks that have agreed with the FSA to pay redress to SME customers missold interest rate swaps. The bank was also fined £290m in June by UK and US regulators for manipulating Libor.

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