Capitalising on valuation normalisation by Hamlin Lovell (The Hedge Fund Journal)

RAM Active Investments’ RAM Lux Systematic Funds – Long/Short European Equities has received The Hedge Fund Journal’s UCITS Hedge award for best risk-adjusted returns in the Equity Market Neutral – Europe (Quantitative) category, in 2021, when the strategy made 18.9%, and over two, five, seven and ten years ending in December 2021. The strategy has integrated ESG and all RAM equity products make disclosures under SFDR category 8, bar one under category 9.

The resurgence of performance in 2021 came after the strategy’s longest and deepest drawdown, between 2018-2020, when equity market neutral strategies saw net outflows of capital that helped to amplify the extreme bifurcation in the market. “Low interest rates crowded investors into longer duration stocks, which culminated in USD 6 trillion of stocks valued at more than 20 times sales in early 2021. Meanwhile, short interest dropped to historic lows around 2% after the meme stock frenzy and squeezes on GameStop and AMC. Valuation dispersion on some measures peaked at levels even above the late 1990s as value stocks were derated. All of this was a double headwind for equity market neutral managers. Long and short books lost money with shorts detracting most,” explains Emmanuel Hauptmann, Partner and Senior Equity Fund Manager, who co-founded the Geneva-based firm in 2007.

Read the full article here.