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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: John Pitera who wrote (7365)	6/12/2006 4:11:58 PM
From: John Pitera	Respond to of 33421

UBS Gears Up For More 130/30 Launches (Long/Short Fund-CASH FLOW FOCUSED) 06/06/06 UBS Global Asset Management will launch a European 130/30 strategy on June 14, a global 130/30 strategy on Labor Day and an equivalent for Asia this fall. Most managers in the 130/30 space have spun strategies out of quantitative portfolios, whereas UBS is basing its approach on its fundamental process. This puts UBS in a good position to pick up mandates as a diversifier to other managers, such as Barclays Global Investors and State Street Global Advisors, said Scott Bondurant, capability head for long/short equity products. He joined the firm in March last year from Morgan Stanley to develop the 130/30 range and the first contender, US Equity 130/30 Strategy, was launched in September. Unusual for a fundamental manager, for almost 25 years UBS has done detailed modeling of stocks even if they are unattractive and has ranked them. The firm has always sought to add value by underweighting or not owning overvalued companies, and now intends to generate more alpha by shorting them. US Equity 130/30 Strategy aims to beat the Russell 1000 Index by 250-500 basis points gross of fees. US Equity 130/30 Strategy includes 50-70 long positions and 30-50 shorts. Quant managers tend to include more names, Bondurant said. And as the firm's fundamental analysts do so much work on companies, he thinks UBS is more comfortable taking larger positions. UBS focuses on "cash flow, cash flow and more cash flow," whereas quant models analyze several different factors. The US Equity 130/30 Strategy received an initial $130 million from the UBS Dynamic Alpha Fund, a tactical asset allocation strategy. The Alaska Permanent Fund will invest $200 million later this month and another state plan has committed $100 million. Dynamic alpha will not be the initial investor for the new strategies. For the European strategy, an institution has committed $10 million and the UBS bank is contributing $40-50 million seed capital. © 2006 Institutional Investor