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Long/short equity veterans Steve Alder and Ralph Jainz's new strategy is racking up striking returns with its fundamental and directional approach to smaller European company equities
Steve Alder and Ralph Jainz
Steve Alder and Ralph Jainz, both experienced long/short managers in their own right but a relatively new presence as a combined force, are off to an extremely strong start with their nascent Eurofin Wittenberg European Small and Mid Cap Fund - which launched in September 2013 under the banner of Eurofin Capital.
The Eurofin Wittenberg fund is up an impressive 27.33% net for the eight months since its debut - a return that is even more remarkable for the fact that the portfolio has been running net short since launch, in a period of widespread bullishness and renewed enthusiasm for European stocks.
Less surprisingly, the fund's current short bias has also meant big returns when the equity markets have come unstuck - most recently in April, when Eurofin Wittenberg gained 7.16% compared with an average return of -1.34% across its peers in the EuroHedge European Equity Index.
Alder joined Eurofin from EEA Fund Management, where he co-founded and managed the EEA Europe Long Short Fund together with former TT International manager John Hobson. Having started his career at Henderson, where he was fund manager of the Henderson Horizon Pan European Smaller Companies Fund and assistant fund manager to Stephen Peak on the firm's then-flagship Henderson European Absolute Return Fund, Alder later spent several years running a European small-cap fund at Adelphi.
Jainz was most recently co-founder of Ratio Asset Management, the London long/short equity boutique he established in 2006 alongside former Gartmore small-cap European equity veteran Jonathan Sharpe (who has also now returned to the industry, in partnership with Andrew Gibbs and his team at Otus Capital/Maga).
Ratio produced a net return of some 23% for investors over its lifespan of five and a half years to 2011, running a quasi-market neutral strategy - with Jainz pointing out that the market was down by roughly the same amount over the same period - but wound down after a wave of redemptions following the US credit rating downgrade in August and September 2011 and a sharp escalation in fears over the future of the Eurozone.