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CB Hedge Europe - CBH |
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CB Hedge is a hedge fund long/short European stocks. Investors can buy shares on a daily basis and sell shares on a monthly basis. At the moment there is no minimum investment amount or subscription fee.
Strategy
On the CBH long side, the managers invest in a concentrated selection of stocks from European Quality Fund. The investment model of CBH is built on the principle of investing with a longer time horizon perspective in companies that have a documented and expected capability to deliver a stable profit growth even during a recession. At the same time CBH goes short in a European index, and this shorting provides a systematic protection during a decline. Usually, the turnover of the portfolio is very low.
Risk
Unlike several other hedge funds, the managers in this case have very limited freedom regarding the exposure towards the stock market. As CBH always has to have a 0-20% net exposure, the managers have a limited possibility to position the fund for a substantial bull or bear market. This means that there is a limited risk of the managers making a completely erroneous decision, and hence a limited risk of large losses. The ambition is for the fund to have an average annual net growth of 10-15% p.a. The managers estimate that the strategy of the fund will be most successful if/when the market rises a maximum of 20% in a year, or goes down. However, it is important to bear in mind that there is no guarantee that an investment in the fund will not lead to a loss. This also applies to an otherwise positive development in the financial markets.
Portfolio managers
The managers are Stefan Karlsson, who started at CB Asset in January 2006, and Carl Bernadotte. The same management team is also in charge of European Quality Fund, which is natural since parts of the management of the both funds are synchronized. In order to eliminate the risk of one fund being favoured/disfavoured over the other, there are specific rules for how the buying and selling of positions in the both funds will be done. The managers may not buy or sell a stock in one fund and at the same time do the opposite in the other fund.
Fund structure
The fund is administrated by SEB Luxembourg, and is a so called FCP fund (Fonds Commun de Placement) with its domicile in Luxemburg and a Part II status. SEB in Stockholm is the primebroker for the fund.
Fees
The fund charges a fixed management fee of 1% p.a. and a performance fee of 20% of all growth beyond the risk free 3M EURIBOR. The fund does, however, use a so called high watermark. The subscription fee varies between 0-5%. At the moment it is 0%. The redemption fee is 1%. In addition to that, there are costs for buying and selling financial instruments, fees to supervisory authorities, audits, distribution and other administrative costs. Here is an example of a calculation of Performance fees.
NAV and trading in the fund shares
The fund is quoted in EUR and its net asset valuation is produced and published daily on our homepage. Subscription of the fund shares can be done daily and redemption can be done on a monthly basis. If the fund grows to a size where we estimate that it will affect the fund performance negatively, it can be closed for further investments. If this would happen, we will of course inform you of it on our homepage. Until further notice there is no subscription fee. Subscription orders of shares must have arrived to the fund, i.e. the shareholder registry of SEB Fund Services in Luxembourg, no later than 4.30 pm one banking day before share purchase price and redemption no later than 4.30 pm five banking days before the last banking day each month (all time indications regard Luxembourg time).
Summary
Fund inception: July 2 2007
Strategy: Long European stocks, short European market
index
Long side: 7-33 stocks (normally 10-12), chosen from
European Quality Fund
Short side: MSCI Europe
Net exposure: Always net long 0-20% (normally ~10%)
Gross exposure: Maximum 300% of AUM
Largest exposure: One single position maximum 20%, and the
sum of the four largest positions, maximum
60% of AUM.
Standard deviation: Goal to keep it at maximum 7%
Target return: Annual net return of 10-15%
Fees: 1% management fee and a 20% performance
fee of return above EURIBOR
Subscription fee: Up to 5%, for the moment 0%
Redemption fee: 1%
High watermark: Yes
Fund administrator: SEB, Luxembourg
Primebroker: SEB, Stockholm
ISIN: LU0302609374
RIC: LP65078535
Bloomberg: CBHEEUR LX
Subscription form, please click here.
For the latest monthly report, August 2010, please click here.
Prospectus, please click here.
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Performance (%)
2010-09-06 | | | NAV | MTD | YTD | | CBH | 93.60 | -0.4 | +19.1 | | | | | EQF | 68.24 | +2.8 | +16.3 | | MSCI Europe | +3.8 | +5.0 | | | | | SEF | 9.63 | +1.6 | +1.8 | | MSCI World | +3.8 | +9.9 | | | | | | | |
2010-07-30 | | | NAV | July | YTD | | CBT* | 10.3 | -2.8 | +9.2 | Latest monthly report | | *simulated portfolio, monthly NAV |
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