Sabre, based in London’s exclusive Grosvenor Gardens, is in the process of pre-marketing the new fund, Sabre Global Value & Income, and is looking to raise seed money for a launch in the second quarter of 2014.
Mr Hollyman has been with Sabre for two years, running a global hedge fund, and will use the same investment process he has developed through his years at JPMorgan and Gam on UK, European and global equity products.
Sabre is teaming up with Gemini Investment Management to distribute the fund, which will be hosted on Gemini’s Dublin-based Ucits platform.
City-based Gemini, headed by managing director Stuart Alexander, will distribute the fund in the UK and other markets due to Sabre’s inexperience in the UK retail space.
Speaking exclusively to Investment Adviser, Mr Hollyman said that if the global equity income launch is successful, then his quantitative process could be used to branch out into other regional equity products.
The quantitative process uses a wide range of different screens to find prospective value stock ideas from which Mr Hollyman uses his fundamental research to build the portfolio.
Sabre is looking to target principally the advisory market with the new launch, acknowledging that wealth and discretionary managers tend to avoid global products.
But it said the fund is designed to fulfil the need that investors still have for income and would allow them to diversify away from a concentration on UK funds for equity income.
Gemini and Sabre are still in the process of ironing out details, such as the pricing on the new fund, but said it would aim for a yield in excess of 150 per cent of the MSCI World index, which would currently equate to approximately 4 per cent.
Mr Hollyman said he would also be investing 100 per cent of his liquid assets into the fund, to align his interests with investors.
Sabre Fund Management has a long history in the hedge fund arena, having run money for more than 30 years. The current chief executive, Melissa Hill, led a management buyout of the firm in 2005 along with Dan Jelicic, who is the chair of the firm’s investment committee and the brains behind the firm’s flagship hedge fund.
The Sabre Style Arbitrage fund is an equity market neutral fund, which means it takes long and short positions on stocks, betting that they will go either up or down, so that the long and short positions balance each other out to make its ‘net’ exposure to the market zero.
The firm’s investment process is heavily driven by quantitative modelling, combining a wide range of different investment factors and styles.
In hiring Mr Hollyman and looking to launch its first retail fund, the firm is now looking to broaden its appeal to those outside of the hedge fund industry.
Mr Hollyman added, though, any further product launches would be driven by investor demand rather than a desire for asset-gathering.
His fund management career also includes Liontrust, which hired him from Gam in 2009 along with the rest of his team Nikki Martin, Tom Ayres and Rob Cornish. Liontrust’s aim was to develop its planned Global Equity Investment Processes range.
However, the company put Mr Hollyman and his team on “gardening leave” the following year after the then new chief executive John Ions decided to focus on its “core strengths”.
How the fund will work
Sabre Fund Management and distributor Gemini Investment Management highlight Ross Hollyman’s 20 years’ experience, during which he has developed his process.
The manager (pictured) uses a four-stage screening process to whittle a universe of 5,000 stock names down to roughly 100 in the portfolio using a mix of quantitative research and discretionary stock selection.
The fund will only be able to hold a maximum of 5 per cent in any one stock, and will have a “substantial tracking error” compared with its MSCI World index benchmark. The group said it had been able to calculate a performance figure for the past 12 months by using a ‘portfolio’ of the long positions – which appreciate if share prices rise – in Mr Hollyman’s hedge fund. This ‘portfolio’ has returned 44 per cent in the past year compared to the benchmark’s 27 per cent.
Key players at Sabre
Melissa Hill
Sabre’s managing principal since 2005, Melissa Hill is responsible for the company’s development and management.
She began her career in the industry in 1996 when she joined Sabre and oversaw the launch of its first quantitative strategy in 1997, as well as being involved in its implementation and asset raising.
In 2003, Sabre’s board appointed Ms Hill to take on running the business and she led a management buyout in 2005. In 2011, she was named as one of the 50 leading women in hedge funds by the Hedge Fund Journal.
Dan Jelicic
The architect of Sabre’s Style Arbitrage strategy, Dan Jelicic is principal and chair of the group’s investment committee.
Mr Jelicic leads the company’s investment process and the group’s investment teams reports to him.
He joined Sabre in 2002 to launch and manage
the Style Arbitrage fund having previously worked as a senior portfolio manager at ABN Amro Asset Management.
It was there that he designed, developed and managed the company’s first equity market neutral fund.
