Key Takeaways
- • Picton Mahoney Asset Management launched the Picton Mahoney Fortified Alpha Alternative Fund, a liquid alternative mutual fund, with Class A, F, FT and I units launched on May 3, 2022, and ETF units beginning trading on the Toronto Stock Exchange under ticker PFAA.
- • The fund targets consistent long-term capital appreciation with an attractive risk-adjusted return, using the firm's rules-based Fortified Investing approach to mitigate downside exposure.
- • Strategy mix spans equity market neutral, special situations in credit markets and merger arbitrage, designed to generate returns uncorrelated with traditional stock and bond portfolios.
- • CEO David Picton argues that traditional equity and fixed income returns are likely to be lower going forward, citing the 'pull forward' of returns over recent years and central banks removing excess accommodation.
- • Picton Mahoney, founded in 2004 and 100% employee owned, manages over CAD $9.5 billion in assets as at April 30, 2022.
Summary
Picton Mahoney Asset Management has launched the Picton Mahoney Fortified Alpha Alternative Fund (the "Alpha Alternative Fund"), according to a Business Wire release dated May 9, 2022. The fund offers five classes of units: Class A, Class F, Class FT, Class I and ETF units. Class A, F, FT and I units launched on May 3, 2022, and are offered to the public as conventional mutual fund securities. The ETF units commenced trading on the Toronto Stock Exchange under the ticker PFAA on the announcement date.
The fund is described as a liquid alternative fund with the objective of providing consistent long-term capital appreciation and an attractive risk-adjusted rate of return. It incorporates Picton Mahoney's proprietary Fortified Investing approach, a rules-based technique that manages risk by mitigating downside exposure while seeking long-term growth regardless of market conditions.
CEO David Picton said that traditional equity and fixed income investments have served investors well over the past 30 years but are likely to generate lower returns going forward. He attributed this to the "pull forward" of returns over the past few years and the need for central bankers to remove excess accommodation from the financial system. The fund is positioned to diversify conventional stock and bond portfolios, providing exposure to equity market neutral, special situations in credit markets and merger arbitrage strategies in a capital-efficient manner. Picton stated the fund aims to generate uncorrelated returns that can compete with equity market returns.
Picton Mahoney describes itself as a portfolio management boutique specializing in differentiated investment solutions and rules-based volatility management. Founded in 2004 and 100% employee owned, the firm manages over CAD $9.5 billion as at April 30, 2022, and offers mutual and alternative funds to institutional and retail investors in Canada. The release notes that alternative mutual funds can only be purchased through a registered dealer and are available only where lawfully offered.
The fund is described as a liquid alternative fund with the objective of providing consistent long-term capital appreciation and an attractive risk-adjusted rate of return. It incorporates Picton Mahoney's proprietary Fortified Investing approach, a rules-based technique that manages risk by mitigating downside exposure while seeking long-term growth regardless of market conditions.
CEO David Picton said that traditional equity and fixed income investments have served investors well over the past 30 years but are likely to generate lower returns going forward. He attributed this to the "pull forward" of returns over the past few years and the need for central bankers to remove excess accommodation from the financial system. The fund is positioned to diversify conventional stock and bond portfolios, providing exposure to equity market neutral, special situations in credit markets and merger arbitrage strategies in a capital-efficient manner. Picton stated the fund aims to generate uncorrelated returns that can compete with equity market returns.
Picton Mahoney describes itself as a portfolio management boutique specializing in differentiated investment solutions and rules-based volatility management. Founded in 2004 and 100% employee owned, the firm manages over CAD $9.5 billion as at April 30, 2022, and offers mutual and alternative funds to institutional and retail investors in Canada. The release notes that alternative mutual funds can only be purchased through a registered dealer and are available only where lawfully offered.
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