Stockholm (HedgeNordic) – A new trend evident in the hedge fund industry is that of established hedge fund managers offering new “best ideas” or long-only funds. After close to 20 years of long/short equity investing, Swedish asset manager RAM Rational Asset Management is launching a long-only equity fund called RAM Long Active Value. The new launch will complement the asset manager’s existing fund offering consisting of RAM ONE, its flagship long/short equity fund, and RAM ONE’s more recently launched UCITS version, RAM Equity Long/Short.
“There is currently an unusually large number of interesting investment opportunities and it may be of interest to a number of different investors to increase the risk level relative to what is possible and desirable in the special fund RAM ONE or the UCITS fund RAM Equity Long Short,” the RAM team writes in a press release. “RAM is therefore launching RAM Long Active Value, RAM LAV, which is a long Swedish equity fund with a focus on fundamental valuation.”
“RAM is launching RAM Long Active Value, which is a long Swedish equity fund with a focus on fundamental valuation.”
The RAM team emphasizes the fund’s focus on valuations, saying that this year’s “declines on the stock markets have been broad and little consideration has been given to fundamental factors such as valuations and cash flows.” The team goes on to add that “the price of basically all assets has fallen. Stocks, unlisted companies and bonds have fallen in value in parallel in a way that has not happened for many years.” The 2022 decline in asset prices can be partly attributed to a reversal of easy-money policies, Russia’s war in Ukraine, China’s zero-Covid policy, ongoing supply chain disruptions, higher oil and natural gas prices, inflation, and fears of recession, among others.
“The price of basically all assets has fallen. Stocks, unlisted companies and bonds have fallen in value in parallel in a way that has not happened for many years.”
RAM’s hedge funds have not been spared by the recent decline in stock prices. RAM ONE, a fundamental global equity long/short hedge fund launched in late 2002, is down 13.3 percent year-to-date through the end of August. “The funds’ unit owners have been hit hard when, in principle, all long holdings have been significantly devalued,” writes the RAM team. “The managers within RAM have acted and gradually changed the portfolio composition so that the long positions consist of companies that are particularly attractively valued according to traditional fundamental analysis to an even greater extent than before.”
The new long-only equity fund will be managed by the same team running RAM ONE and RAM Equity Long/Short. Anders Hansson, RAM’s Head of Analysis and co-owner, and principal owner Erik Edholm will be the responsible portfolio managers for RAM Long Active Value. In connection with RAM Long Active Value opening at the turn of the coming month, Edholm, Hansson and others in the investment organization will invest a significant amount in the new fund. The fund will be open to both private investors and institutional investors.