The Context Macro Opportunities Fund has surpassed USD100 million in assets under management, a year after commencing operations on 4 August 2015.
The Context Macro Opportunities Fund seeks total return with low to negative correlation to broad financial markets by using alternative investment strategies. Total return consists of capital appreciation and income.
"This milestone highlights our ability to select a proven private fund manager in First Principles Capital Management and create a registered product with an investment objective to lower correlation to traditional risk assets and which seeks to generate asymmetric returns," says John Culbertson (pictured), president and chief investment officer of Context Asset Management. "With this improved scale, we believe these successfully executed strategies may continue to provide some ballast to a diversified portfolio and help protect against volatility in the equities and fixed income markets."
The fund is a single-manager, multi-strategy fund, which uses a relative value approach to seek non-directional market risks with asymmetric outcomes and predominantly uses liquid fixed income markets.
First Principles Capital Management (FPCM) serves as the fund's sub-adviser and is responsible for the day-to-day management of the portfolio, and is subject to the general oversight of Context Advisers II, which serves as investment adviser.
FPCM is a registered investment adviser with USD8 billion in assets under management as of 31 December 2015, and is a wholly-owned subsidiary of American International Group (AIG).
Mark G Alexandridis, chief investment officer of FPCM, says: "We are pleased to see the early adoption of the Context Macro Opportunities Fund, which provides retail and institutional investors access to the same disciplined approach as our private funds. Our approach uses a combination of alternative strategies to pursue a positive asymmetric return profile. To achieve this goal, we focus on three elements that generate return: current income from high-conviction, short duration exposures; tactical relative value exposures that seek incremental return; and structural positions that provide low or negative correlation to risk assets designed to generate asymmetric returns in sustained recessionary scenarios."
Over the next 12 to 18 months, Context Asset Management is looking to expand its liquid alternative mutual fund platform and create three new products sub-advised by different hedge fund managers.
Culbertson says: "In the current environment, we continue to favour alternative strategies with lower correlation to risk assets and offer potential for asymmetric returns. With global growth slowing and unprecedented level of central bank intervention in financial markets, we believe that systematic and discretionary global macro, volatility strategies and some forms of statistical arbitrage may have a much better chance of outperforming long short equity and event-driven strategies."