Key Takeaways
- • Campbell & Company is relaunching its Campbell Absolute Return multistrategy fund after overhauling its strategy mix in 2014, according to people familiar with the offering.
- • The relaunch will offer outside investors a founder's fee structure; specific fee terms had not been determined at publication.
- • The fund, which spans quantitative equities, short-term trend following and systematic macro, has returned almost 9 percent annually since 2014, per people familiar with the fund.
- • The move comes as trend-following funds have struggled, with BarclayHedge data showing average year-to-date returns of 4.5 percent for the strategy.
- • Kevin Cole, Campbell's chief research officer, said investors are seeking diversified, lowly correlated quant strategies after a long equity bull market.
Summary
Campbell & Company, a 45-year-old multi-style quantitative manager, is relaunching its Campbell Absolute Return strategy, according to people familiar with the offering. The fund was previously dominated by trend following. In 2014 Campbell changed the balance of strategies and incubated the revamped product with friends and family money. With four years of performance data supporting the new approach, the formal relaunch will offer outside investors a founder's fee structure, according to the same sources, though fee details had not been determined at the time of publication.
The fund combines quantitative equities, short-term trend following and systematic macro strategies, designed to be uncorrelated to broader equity markets. The relaunch comes as trend-following strategies have posted disappointing results. According to BarclayHedge, trend-following funds have returned 4.5 percent year to date on average. Underperformance has been attributed in part to near-zero interest rates resulting from post-financial-crisis monetary policy, which have reduced market dispersion that these strategies depend on. As a result, some large managers have shifted toward longer-term strategies and become less responsive to market moves.
Against this backdrop, some investors are turning to quant managers that can incorporate macro thinking. Kevin Cole, Campbell's chief research officer, said that given the length of the current bull market, investors are increasingly attracted to absolute return offerings providing exposure to a diversified set of lowly correlated quant strategies, with the twin goals of portfolio diversification and access to innovative research processes. A Campbell spokesman declined to comment specifically on the launch.
Since the 2014 overhaul, which rebalanced the fund's allocations toward an absolute return objective, the fund has returned almost 9 percent annually, according to the people familiar with the fund. The sources also said Campbell aims to differentiate the fund through performance from increasingly popular, low-cost alternative beta strategies that seek to replicate hedge fund returns at lower cost.
The fund combines quantitative equities, short-term trend following and systematic macro strategies, designed to be uncorrelated to broader equity markets. The relaunch comes as trend-following strategies have posted disappointing results. According to BarclayHedge, trend-following funds have returned 4.5 percent year to date on average. Underperformance has been attributed in part to near-zero interest rates resulting from post-financial-crisis monetary policy, which have reduced market dispersion that these strategies depend on. As a result, some large managers have shifted toward longer-term strategies and become less responsive to market moves.
Against this backdrop, some investors are turning to quant managers that can incorporate macro thinking. Kevin Cole, Campbell's chief research officer, said that given the length of the current bull market, investors are increasingly attracted to absolute return offerings providing exposure to a diversified set of lowly correlated quant strategies, with the twin goals of portfolio diversification and access to innovative research processes. A Campbell spokesman declined to comment specifically on the launch.
Since the 2014 overhaul, which rebalanced the fund's allocations toward an absolute return objective, the fund has returned almost 9 percent annually, according to the people familiar with the fund. The sources also said Campbell aims to differentiate the fund through performance from increasingly popular, low-cost alternative beta strategies that seek to replicate hedge fund returns at lower cost.
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