Graham Loughridge, CEO, Variety Capital Limited and a Director of the Board of the Variety Capital ICAV, announced the launch of a Relative Value UCITS fund, saying: “I am delighted to have launched the Variety RiverNorth Relative Value Fund (Ticker: VRVNSUA) on the Variety Capital ICAV platform today.
“Led by its CEO and CIO, Patrick Galley, RiverNorth is a highly successful US hedge fund manager with a 17-year track record and USD5 billion in assets under management. RiverNorth Capital Partners is a highly diversified, multi-asset fund that has outstanding absolute and risk-adjusted returns. It has compounded at 12.4 per cent p.a. net of fees since inception in August 2007 and has done so with low beta and correlation to the equities markets.
“The alpha of the strategy is captured from arbitrage investments in the closed-end fund and pre-merger SPAC markets in the US. I am very pleased to now be offering non-US institutional investors limited capacity to this proven strategy in a UCITS structure, trading on daily-pricing, T+5 terms.”
Patrick Galley, CEO and CIO at RiverNorth Capital Management, says: “I am very pleased to have launched our core hedge fund strategy today to the UCITS
market and to be acting as Investment Manager to the Variety RiverNorth Relative Value Fund. Our strategy offers investors two rare source of alpha: the arbitrage of US-listed closed-end funds that often trade at discounts to their true NAV, and the trading of listed pre-merger SPACs in the US.
“RiverNorth has been the dominant institutional investor in closed-end funds in the US for many years. US closed-end funds, known as investment trusts in the UK, are highly liquid, exchange-traded and pre-dominantly owned by retail investors seeking levered yield. Our strategy captures the often-irrational behaviour of the market that regularly presents us with the opportunity to get exposure to level one and level two US securities at discounts to their true NAV. The timing of our UCITS fund launch is fortuitous as the discounts, and discount volatility, are now at historically high levels. Our master fund has returned 12 per cent net of fees over the last seven months and our UCITS portfolio will very closely mirror our master fund portfolio.
“With regard to pre-merger SPACs, we seek to acquire select issuers at discounts to par value in the secondary market with the legal right to tender our shares back to the sponsor at par plus interest. We also get to retain additional potential upside through holding warrants.
“We always exit our investment pre-merger and never remain invested in the combined company. The strategy has compounded at 16 per cent net over the last four years and will form a small but important part of our UCITS fund.
I and the RiverNorth team are looking forward to working with Variety Capital and new investors in the UCITS market, and I thank the several institutions across the UK and Europe that have participated as Founder investors.”
