Key Takeaways
- • Sirios Capital Management launched Europe's first ETF with a performance fee structure in partnership with iMGP, charging a 1.20% total expense ratio plus 20% of outperformance measured on a "high-on-high" basis annually.
- • The iMGP Sirios Absolute Return Fund R EUR HP PR UCITS ETF (SARF) maintains low net equity exposure capped at 30% long, with six sector-specialist analysts managing the strategy and equal weighting across sectors.
- • Fund selectors are increasingly questioning the suitability of long/short equity and absolute return strategies amid volatile market conditions, according to Last Word Research data covering Q2-Q3 performance.
- • This marks Sirios Capital Management's first European market entry since its 1999 founding in Boston, leveraging iMGP's multi-boutique model that has previously distributed US hedge fund strategies including managed futures products in 2025.
- • The product launch occurs during a period of contraction in the liquid alternatives space, with iMGP positioning SARF as filling a gap created by fewer market participants in hedge fund ETFs.
Summary
Sirios Capital Management, a Boston-based hedge fund founded in 1999, entered the European ETF market through a partnership with Paris-based iM Global Partner (iMGP), launching the iMGP Sirios Absolute Return Fund R EUR HP PR UCITS ETF (SARF). The fund represents Europe's first ETF to incorporate a performance fee structure, charging investors a 1.20% total expense ratio plus 20% of any fund outperformance measured annually on a "high-on-high" basis—a mechanism that applies the performance fee only on gains above the previous net asset value at which such fees were crystallized.
The strategy itself reflects Sirios's two-decade specialization in long/short equity investing using bottom-up fundamental analysis. SARF maintains a disciplined risk profile with net long exposure capped at no more than 30%, managed by six sector-specialist analysts with each sector equally weighted in the portfolio. The fund also remains available in mutual fund form alongside the ETF structure. John F. Brennan, managing director of Sirios, cited "stretched equity valuations" and "bifurcated" market conditions as supporting the timing for an absolute return strategy focused on strong stock-picking dynamics.
However, the launch arrives amid headwinds in fund selector sentiment toward long/short equity and absolute return strategies. According to Last Word Research data spanning Q2 and Q3 2026, fund selectors have increasingly rebuked these strategies during what market participants characterize as "frenetic" market conditions. This skepticism regarding suitability underscores the challenging environment for hedge fund-linked ETF products, despite iMGP's positioning of SARF as a timely offering in a contracting liquid alternatives landscape.
iMGP, which takes small stakes in specialist managers and distributes their strategies to European institutional clients, views the product launch as addressing scarcity in the hedge fund ETF market. Julien Froger, head of Europe at iMGP, emphasized that SARF provides "international investors with a new option in the liquid alternatives space at a time when there are fewer players in the market than in the past." This represents Sirios's second major US hedge fund partner to distribute strategies through iMGP's platform following the introduction of DBi-managed futures products in 2025, signaling ongoing consolidation and specialization within Europe's alternative investment infrastructure.
The strategy itself reflects Sirios's two-decade specialization in long/short equity investing using bottom-up fundamental analysis. SARF maintains a disciplined risk profile with net long exposure capped at no more than 30%, managed by six sector-specialist analysts with each sector equally weighted in the portfolio. The fund also remains available in mutual fund form alongside the ETF structure. John F. Brennan, managing director of Sirios, cited "stretched equity valuations" and "bifurcated" market conditions as supporting the timing for an absolute return strategy focused on strong stock-picking dynamics.
However, the launch arrives amid headwinds in fund selector sentiment toward long/short equity and absolute return strategies. According to Last Word Research data spanning Q2 and Q3 2026, fund selectors have increasingly rebuked these strategies during what market participants characterize as "frenetic" market conditions. This skepticism regarding suitability underscores the challenging environment for hedge fund-linked ETF products, despite iMGP's positioning of SARF as a timely offering in a contracting liquid alternatives landscape.
iMGP, which takes small stakes in specialist managers and distributes their strategies to European institutional clients, views the product launch as addressing scarcity in the hedge fund ETF market. Julien Froger, head of Europe at iMGP, emphasized that SARF provides "international investors with a new option in the liquid alternatives space at a time when there are fewer players in the market than in the past." This represents Sirios's second major US hedge fund partner to distribute strategies through iMGP's platform following the introduction of DBi-managed futures products in 2025, signaling ongoing consolidation and specialization within Europe's alternative investment infrastructure.
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