08/09/2010

Gam and DCI launch joint Ucits credit fund

Gam and credit manager DCI have jointly launched one of the first Ucits III-compliant market neutral credit funds.

The Gam Star Diversified Market Neutral Credit aims to produce absolute returns with low correlation to fixed income markets through investing in a highly diversified long and short portfolio of mispriced, predominately investment grade credit.

San Francisco-based DCI uses leading-edge quantitative systems to determine corporate default probabilities and to value corporate credit instruments. It then constructs risk-matched and diversified long and short portfolios to exploit mispricings.

DCI’s managing partner and CIO Stephen Kealhofer has developed the fund’s proprietary models. He said: “There is different information in equity and credit prices. We capture and interpret an extremely broad set of information from both equity and credit markets so that we can determine credit risks accurately and frequently. We use this information to identify and exploit mispricings in the market.”

“Gam is increasingly being recognised for its extensive range of Ucits III absolute return funds," said Craig Wallis, group head of institutional and fund distribution at Gam. "Many investors from around the world increasingly want regulated, tax-efficient strategies that are run by proven, high-calibre managers and that offer liquidity and transparency."

He continued: "GAM is in a unique position to match this demand from a broad spectrum of clients with access to carefully-selected, talented investment managers, such as DCI.”