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MAM scraps Midas core holding hunt

MAM Funds has abandoned its search for a multi-strategy hedge fund to act as a core holding for the hedge fund allocation of its Midas balanced growth fund.

Fund managers Simon Callow and Mark Wright had intended to take a core and satellite approach to hedge funds but they have not found a liquid, multi-strategy hedge fund manager they are comfortable with. Instead, they will blend what they see as the most complementary, uncorrelated single hedge fund strategies that are able to deliver strong risk-adjusted returns. These strategies are merger arbitrage, managed futures or CTA, global macro and risk arbitrage.

The MAM team is not looking at long/short equity strategies as it believes these funds deliver market returns so would not add anything to the Midas balanced growth fund.

Since the recent addition of Aquila Capital’s risk parity 12 fund, Midas balanced growth now has allocations to three of its chosen strategies. The AC risk parity fund invests equally in four financial assets – equities, commodity futures, short-term interest rates and government bonds – to control risk by ensuring parity between them.

Finding a suitable global macro fund will be the final piece in MAM’s hedge fund strategy unless the team finds another strategy it feels is worthy of inclusion. It is currently looking at its options in the global macro universe and intends to add a holding in this area soon.

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