GLG Innovation Equity
GLG Innovation Equity (the ‘Strategy’) employs a disciplined, long-short approach to investing in liquid US equities.
- Managed by a seasoned portfolio management team who have worked together for 15+ years
- The investment team is led by Mike Corcell who has over 22 years’ experience in US equity fund management and a 16 year track record in US equity/long short investing
- The team employ a disciplined investment process that focuses on three key areas when assessing stocks: investment cycles, change themes and secular winners/losers
- A pragmatic approach to risk management and highly active exposure management is a key principal of the team’s approach to mitigating risk
- The short book is designed for alpha generation - not for hedging
Approach
The team focus on analysing three key factors when looking to invest in stocks on either side of the book:
Investment cycles. The team analyses each position within the context of capital, business and credit cycles and the sustainability of current trends within companies and industries.
Change themes. Aims to monetise either change or sustainability when it is not correctly priced by investors. The team look to profit from a security’s mispricing – which is typically created when investors do not accurately understand change or sustainability in an industry or company’s business model.
Secular winners and losers. In the long book the team seek to identify companies/sectors with sustainable above trend growth and barriers to entry. In the short book the team look to identify companies and sectors with growth challenges and declining returns.
The stock selection philosophy is a core part of a highly disciplined investment process that Mike Corcell has developed over 16 years. Research is strictly limited to those companies where the business model can be clearly modelled and understood and the team does not invest in credit related financials, pharmaceuticals or bio-technology stocks.
The portfolio is typically comprised of between 50-60 mid to large cap stocks and the team does not seek to invest in small caps, futures or indeed any derivative or basket product other than options. Furthermore, the short book is always made up of stock positions which actively seek to add value rather than dissipate or hedge risk.
Past performance is not indicative of future results. Returns may increase or decrease as a result of currency fluctuations.
| Approach | Alternative |
| Asset Class | Equity |
| Geographic Focus | Global |
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Considerations
One should carefully consider the risks associated with investing, whether the strategy suits your investment requirements and whether you have sufficient resources to bear any losses which may result from an investment:
Investment Objective Risk - There is no guarantee that the Strategy will achieve its investment objective.
Market Risk - The Strategy is subject to normal market fluctuations and the risks associated with investing in international securities markets and therefore the value of your investment and the income from it may rise as well as fall and you may not get back the amount originally invested.
Counterparty Risk - The Strategy will be exposed to credit risk on counterparties with which it trades in relation to on-exchange traded instruments such as futures and options and where applicable, ‘over-the- counter’("OTC","non-exchange") transactions. OTC instruments may also be less liquid and are not afforded the same protections that may apply to participants trading instruments on an organised exchange.
Currency Risk - The value of investments designated in another currency may rise and fall due to exchange rate fluctuations. Adverse movements in currency exchange rates may result in a decrease in return and a loss of capital. It may not be possible or practicable to successfully hedge against the currency risk exposure in all circumstances.
Liquidity Risk - The Strategy may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely and cost efficient sale of trading positions can be impaired by decreased trading volume and/or increased price volatility..
Financial Derivatives - The Strategy will invest financial derivative instruments ("FDI") (instruments whose prices are dependent on one or more underlying asset) to achieve its investment objective. The use of FDI involves additional risks such as high sensitivity to price movements of the asset on which it is based. The extensive use of FDI may significantly multiply the gains or losses.
Leverage - The Strategy's use of FDI may result in increased leverage which may lead to significant losses.
Single (limited) Industries - The Strategy focusses on single (or a limited number of) industries therefore, may be susceptible to greater risks and market fluctuations than investment in a broader range of investments covering different economic sectors.
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