The international financials and absolute return funds will provide retail investors with access to Gibbs’ long and short investment skills, established during the last nine years through running a hedge fund. Gibbs also manages the Jupiter financial opportunities and offshore global financials fund.
The Absolute return fund aims for returns that are independent of market conditions by investing globally in equities, equity-related securities including derivatives, cash, fixed interest and other securities.
Under the Ucits III rules, the fund can hold big amounts of cash and can use derivatives to short stocks and indices. The fund will be benchmarked against the three month Libor and will be managed along similar lines to Gibbs’ hedge fund, with less leverage and volatility.
The international Financials Fund aims for growth by investing globally in financial companies, again with the ability to use derivatives to short stocks and indices and hold big amounts of cash. Gibbs has the flexibility to invest in smaller financial companies and can also hold bonds issued by financial companies. The fund will be benchmarked against the FTSE Global Financials Index and will be similar to the offshore global financials fund.
IFA Hargreaves Lansdown says Gibbs has built a reputation for timing markets and taking bold decisions. It notes that when the financial crisis caused share prices to plummet, Gibbs had already increased cash and bond exposure in his existing financials fund, helping to cushion the fund from the worst of the falls.
The IFA firm also says that he spotted the technology bubble in 2000 and has since made the right decisions in terms of emerging markets and resources, reducing exposure to shares in 2007 and positioning his portfolio for a recovery in the second quarter of this year.
Gibbs’ ability to make the right decision at the right time may have helped the absolute return and international financials fund raise more than £244m and £98m respectively pre-launch, but their continued success depends on Gibbs’ ability to repeat his past achievements.