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Canada’s Acuity Investment Management launches 130/30 vehicle

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Toronto-based Acuity Investment Management has launched a new pooled fund that combines long and short strategies, the Acuity Pooled 130/30 Fund, to help investors maximise return potentia

Toronto-based Acuity Investment Management has launched a new pooled fund that combines long and short strategies, the Acuity Pooled 130/30 Fund, to help investors maximise return potential in up markets and protect assets in down markets.

‘We want to help investors diversify not only by asset class, sector and region, but also by removing the biggest constraint that most portfolio managers have, which is an inability to add value in names that they don’t like,’ says Acuity managing director and lead portfolio manager Hugh McCauley. ‘The Acuity Pooled 130/30 Fund is a natural extension of a long-only equity strategy, and a logical complement to traditional equity portfolios.’

McCauley says Acuity selects stocks with exceptional upside potential, as well as those with the potential to experience a downturn. The initial 100 per cent long position is augmented by a 30 per cent short position, and the proceeds of the short position are reinvested in additional long stocks.

‘Investors effectively receive 160 per cent exposure to our very best buy and sell ideas,’ he says. ‘Unlike a long-only fund, our investment management team is able to act on both upside and downside expectations, giving us a much broader set of opportunities.’

Stephen Crawford, a senior vice-president for national sales, adds: ‘The risk-return advantages of 130/30 investing has made this strategy popular among large institutional investors. We are now pleased to offer individual investors an opportunity to benefit from this strategy.’

Acuity follows a team-based approach to investment research, including a detailed analysis of individual company financials, management, sector and industry outlook to seek the most promising opportunities. Founded in 1990, the firm manages some CAD9.2 billion in assets through closed-ended funds, pension, institutional and private portfolios.

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