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-EGA and Cité Gestion partner to launch a Long/Short fund considering the ranking of strength or weakness of good corporate governance of the S
LONDON, April 3, 2024 /PRNewswire/ — European and Global Advisers (EGA), the London-based investment boutique recently joined by two former BlueCrest Capital Management partners, Mattias Eriksson and Ebrahim Kasenally, is joining has partnered with the French Cité Gestion to launch a systematic UCITS Long/Short fund that seeks to generate positive returns by investing in the best and worst governed companies in the S
Domiciled in Ireland, the PLURIMA Market Neutral UCITS fund takes long positions in the index’s 100 best-governed companies and short positions in its 100 weakest-governed companies, as determined by the management model developed by Green’s governance analysts. Blue Invest, the ESG brand of Cité Gestion SA.
The model, which excludes tobacco, defense, oil and gas companies in its long positions, uses artificial intelligence and natural language processing to rank the quality of companies’ governance based on analysis of your 10-K reports.
With more than 15 years of validity, the model developed through the association of Green Blue Invest with Stewardship
Using its own proprietary dictionary with 8,000 keywords, the model detects the presence and use of positive and negative words in relation to good governance, in corporate communications such as 10-K filings, full annual reports that companies must submit. to the Securities and Exchange Commission.
Using these metrics, the model assigns each company one that determines the quality of its governance. Companies that score highly tend to share certain characteristics, including concern for employee well-being, prudence, and a focus on R&D, that generate more value for shareholders in the long term.
In contrast, companies that rank lower in terms of governance tend to perform less well. Combining the history of simulated and real operations, this lower performance translates into achieving an additional 5% gross average generated by the model.
The investment team has been running a long version of the strategy for five years, during which time it has outperformed the S Index
The PLURIMA Market Neutral Fund will be 100% long the 100 best-governed stocks ranked by the model score and 80% short the 100 lowest-scoring stocks, providing a net long exposure of 20%.
The composition of the portfolio will be rebalanced annually and the weightings will be rebalanced quarterly.
Mattias Eriksson, partner at EGA, said in a recent statement: “Governance is at the heart of company performance and applying a quantitative approach to assessing its quality allows the fund to systematically generate alpha from the best and worst companies. managed by S
“Partnering with Cité Gestion and Green Blue Invest means we can leverage the expertise of industry-leading ESG professionals to offer wealth managers targeted exposure to characteristics that are an important and sustainable source of long-term outperformance. “.
Pascal Botteron, Chief Information Officer at Green Blue Invest and Chief Investment Officer at Cité Gestion Private Bank, said: “The vast majority of ESG funds focus on the ‘E’, but our research shows that well-governed companies achieve positive results. not only in the ‘G’ but also in the ‘E’ and the ‘S’. Our academic model systematically harvests these governance premiums and dynamically adjusts to changes in corporate language to ensure that only the best and worst managed companies in the index are represented.
“We are delighted to collaborate with Mattias and Ebrahim to offer EGA customers exclusive access to a long/short version of the model in a UCITS format.”
Acerca de European and Global Advisers LLP
EGA LLP (www.egallp.com) was formed in 2011 as an independent, privately held investment boutique to provide specialist niche funds to institutional and professional investors, as well as advisory firms and their clients. EGA manages investment funds, offers investment advisory services and develops investment strategies for banks, managers and family offices. Full service offered through entities in the United Kingdom, Ireland and Europe. Since 2021, new partners have added multiple new investment strategies. The company currently manages seven UCITS funds.
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