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Julian Gibbs

About 18 months ago, I wrote about the only individual hedge fund that I

have ever recommended. It is run by Elysian Fund Management of Grosvenor

Place, London. It has a fine record, having shown profits every year since

it was launched in December 1998 and, as a result, is now being marketed

more actively through IFAs.

The secret of its success is fund manager Paul Hopkins, who has over 25

years&#39 experience in this field. He was previously a chief investment

officer at American Express.

The fund has seen a 72 per cent rise since launch – an excellent result in

very difficult markets. At present, its holdings are around 30 per cent in

the UK, 25 per cent in Europe and 45 per cent in the US.

Hopkins&#39 aim is to achieve superior long-term returns by investing in a

limited number of well researched equity securities, focusing on positions

in stocks that exhibit stable growth and improving operating margins,

especially companies with low debts.

Conversely, Hopkins sells short positions in stocks that focus on declining

industries and which are now experiencing competitive pressure and also

stocks which in his opinion are overvalued, with prices not accurately

reflecting their underlying fundamentals.

At present, 50 per cent of the portfolio is invested in stocks which

Hopkins feels will rise in value and 50 per cent in stocks which he feels

will fall. He believes there are now many undervalued stocks, so this

percentage may change. He expects to make more substantial capital gains

when stockmarkets recover.

It would certainly be worthwhile for investment IFAs to meet up with

Hopkins to discuss how he can help their clients, whether through direct

investments. Sipps or SSASs.

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