New York (HedgeCo.net) – Hedge fund manager Bandon Capital Management launched the Bandon Hedged Equity, a long-short equity strategy providing exposure to domestic equity markets while minimizing the effect of the directional movements of the market.
The portfolio is constructed in two roughly equal parts. The first is a select basket of high conviction individual equity positions and the second is a market hedge to protect against market volatility in an attempt to isolate alpha and reduce directional market risk. Equity long-short investing is a core institutional alternative strategy but is often difficult for the mass affluent and small institutional investors to access.
“As we reviewed the products available to non-accredited investors, we realized there was an opportunity to create a high-quality hedged equity strategy based on institutional alternative investment manager research, that could combine the benefits of a low minimum investment, daily liquidity, full transparency, and 1099 tax reporting without the issues associated with typical alternative investment partnerships. Creating this new strategy was the clear next step to compliment our flagship tactical fixed income based Directional Interest Rate Strategy (DIRS)”, said Bill Woodruff, Bandon Founder and President.
“There were natural reasons to create the strategy but the launch could not be more timely based on market conditions as well as investor and advisor demand for tactical strategies. There is a greater understanding post 2008 of downside risk and the high correlation among markets. This strategy offers equity exposure and potentially equity like returns, while reducing market risk and volatility. We’ve been managing accounts in this strategy since November of last year and our returns year to date, through the end of May, have been positive 8.03% vs. -2.31% for the S&P 500. We are very pleased with the job it is doing in outpacing the relevant alternative benchmarks, while at the same time maintaining low correlations to alternative and traditional benchmarks” said Mr. Woodruff.
