10 APRIL 2014, 07:26
By Stephen Cranston,
April 11 - 2014
Laurium Flexible fund founder Murray Winckler. Picture: FINANCIAL MAIL
A NEWCOMER to unit trusts has had a strong debut. The R170m Laurium Flexible fund returned 35,1% in the 12 months to March.
It came top of the flexible asset allocation sector, beating such stalwarts as the Coronation, 36One and Visio funds.
The fund averages 80% equity over time but as a flexible fund is permitted to be 100% in cash at any time. It is currently 90% in equities. It owes its success partly to its aggressive asset allocation in a rising market but also to some of its stock picks. Its largest holding is in an exchange traded fund exposed to the US market and there were some strong picks on the JSE, such as Naspers, Sasol, Old Mutual and BHP Billiton.
Laurium, based in Fredman Drive, Sandton, may be a newcomer to unit trusts but it has been running hedge funds for nearly six years. It has R2,6bn under management.
It was founded by Murray Winckler, the former head of Deutsche Bank SA, and Gavin Vorwerg, who was head of Middle East and Africa derivatives structures at the bank. The head of research, Craig Sorour, is a former retail analyst and equity proprietary trader at Deutsche. The investment team is eight strong with a further five on operations.
The oldest fund in the stable is Laurium Long Short, with R1,6bn under management. It aims, by taking long and short positions mainly on JSE shares, to get a return of inflation plus 7%. It has achieved a real return of 10,1%.
The lower-risk Market Neutral fund, with R160m under management, has achieved a 12,9% annual return. It is second in its category over 12 months, with a 22,1% return, beaten only by Blue Alpha Polar Star. Its largest drawdown (loss) has been just 1,3% compared with 10,8% in the Long Short fund.
Laurium is a bottom-up house. It looks for companies whose share prices differ materially from their intrinsic valuations.
It also has a top-down overlay to identify and take advantage of economic cycles and market trends.
And with decades of trading experience at Deutsche in the house, it is no surprise that trading is part of the process. Winckler says short-term inefficiencies present trading opportunities, often around money flows, news flows and emotions and structural inefficiencies.