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Henderson insists AR fund still has capacity

Henderson insists AR fund still has capacity

Henderson has said it is not on the verge of soft closing its UK Absolute Return fund, despite the strategy reaching a level previously specified as its capacity threshold.

Manager Luke Newman, who runs the fund alongside Ben Wallace, said in January that the product had a notional capacity of $6.5bn to $6.7bn (£4.5bn to £4.7bn).

Total assets across the strategy, which encompasses offshore and onshore portfolios as well as the AlphaGen Octanis hedge fund, have now reached the $6.5bn mark, according to FE figures.

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However, the fund house has said there is “capacity” in the portfolio, and it is still accepting orders from fund selectors and new investors.

Mr Newman said at Henderson’s conference in January this year: “We like to have the ability to liquidate 80 per cent of net asset value in 10 days.

That implies a notional capacity at the moment of $6.5-6.7bn.”Funds’ capacity constraints can shift over time as a result of liquidity conditions or managerial resources.

The Henderson fund was originally soft closed in November 2011 when assets reached $2bn.

It reopened in June 2013, a move Mr Wallace said was due to an increase in stock dispersion which had allowed the managers to put more capital to work.

The product has been a rare winner so far in 2016 in terms of both performance and inflows.

The onshore fund took in an estimated £200m in the first two months of the year, according to Morningstar, at a time when UK fund flows were at their lowest levels since 2008.

Having outperformed on the upside in recent years, the strategy also held up well during the January sell-off.

It returned 5.5 per cent on a one-year view as of March 31.Interest in absolute return funds has led some asset managers to soft-close portfolios to new investors.

Both Dalton Strategic Partnership and Kames Capital have taken steps to manage inflows in the first quarter of the year.