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Optima hedges bets on US

Optima Fund Management has introduced the Lee Munder growth fund, which is a hedge fund that invests in small and medium companies in the US.

The fund is structured as a Bermuda-registered Oeic and will use long and short equity hedge fund strategies mainly in the technology, healthcare and business services, which are companies that provide information to other companies.

There will be between 60 and 80 stocks within the portfolio and half of these are expected to be technology stocks. Up to 15 per cent will be invested in healthcare and 25 per cent will go into business services. The remaining 10 per cent will go into other sectors at the discretion of the fund managers.

The fund managers, Andrew Beja and Jonathan Stone, will take a bottom-up approach to stockpicking. They will go long on companies within the chosen sectors that have high growth potential and go short by selling overvalued stocks within these sectors, then buying them back when the prices have fallen.

Beja and Stone are based in Boston and joined the company in August 2000. They previously worked together for three years at investment management group Standish Ayer & Wood.

Unlike larger companies, small and mid-cap stocks have greater growth potential and as share prices are volatile, there could also be greater opportunities for short selling overvalued stocks.

This fund is likely to have limited appeal because it is a specialist hedge fund that concentrates risk in the US in exchange for high potential returns and its minimum investment is more than double that of other hedge funds. It could attract interest from high-net-worth clients and institutional investors, but some could be put off by its high proportion of technology.

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