A GAM news release said the strategy is designed to deliver strong returns with low volatility and low equity correlation. The GAM Multi-Diversified LV strategy is managed in a similar style and utilizes the same strategies as its flagship fund of hedge fund strategy, GAM Diversity.
The new strategy is managed by David Smith, Chief Investment Director, along with GAM’s 120-strong Multi-Manager investment team. According to the announcement, the investment specialists will focus on developing detailed knowledge of the funds within each strategy universe and conduct in-depth manager research and due-diligence on each potential investment.
Each potential investment will then be evaluated and performance expectations established prior to portfolio construction. The final portfolio is continuously monitored and risks are identified and managed throughout the investment process by a separate operational risk team, GAM said.
David Smith, Chief Investment Director for GAM Multi-Manager, said the Multi-Diversified strategy will be weighted more strongly towards arbitrage, approximately 50%, with a 25% allocation to both equity hedge and trading to lower both volatility and correlation to equities.