Serero says healthcare, consumer, industrials and technology will be key stockpicking areas for the fund, with Britain, France, Germany and Switzerland featuring strongly. He sees particular opportunities in the online gaming industry, with government reviews of prohibition policies across Europe creating a trigger for change.
The fund targets a return of 12-15 per cent per year with a volatility of 10-12 per cent and will have a lower risk and targeted return than Octopus’s existing UK Absolute Return fund. Serero says the volatility in Europe provides an ideal backdrop for the fund. However he stresses it will focus on stock specific ideas with a special situations bias.
He says: “The shorts are not there to hedge market risk, but to generate alpha in the same way as the long side of the book so in general there is a good balance of both.”