Downing has launched its MGTS Downing Active Defined Return Assets Fund, the first fund from its new Liquid Alternatives team.

The fund is aimed at discretionary fund managers (DFM), independent financial advisers (IFA), institutional investors, and advised, sophisticated individual investors.

It will consist primarily of UK government bonds and large-cap equity index options, aiming to deliver 7 per cent to 10 per cent plus per annum and positive returns in all markets except for a sustained equity market fall, over a period of at least six years.

The fund is the first to be launched by Downing’s new Liquid Alternatives team, which includes Tony Stenning, who held senior roles at BlackRock and most recently was CEO of Atlantic House Group; Russell Catley, founder and also a former CEO of Atlantic House Group; Huw Price, a former executive director at Santander Asset Management; and Paul Adams, former head of cash equities and derivatives sales at Royal Bank of Canada.

Downing said that the fund offered investors a building block for multi-asset portfolios, seeking to add consistent and predictable returns.

The proposition includes a hybrid approach of using systematic derivative strategies and active management, and an equity-like risk profile.

Commenting on the fund launch, Downing head of retail, liquid alternatives, Russell Catley, said: “We target the highest probability of delivering 7 per cent to 10 per cent+ per annum with active management adding material incremental gains. We believe that we are building the next evolution of the proven success of defined returns funds.

“The Downing team is seeing strong demand from clients looking for alternatives to large-cap equity funds which are becoming concentrated in technology stocks, or alternatives to UK equity income funds and illiquid alternatives.”

Downing head of liquid alternatives, Tony Stenning, stated: “The launch of our Active Defined Return Assets Fund is a significant milestone in the ambitious build-out of our new Liquid Alternatives strategies.

“It is a solution-focused fund that should deliver stable high single or low double-digit returns across a wide spectrum of equity market conditions, except for a persistent multi-year bear market.

“The fund is designed to enhance balanced portfolios by providing consistent, predictable returns and is suitable for accumulation or drawdown.

“We aim to deliver a unique combination of proven systematic derivative strategies and specialist active management, and we are doing so at a very compelling fee level, below our closest competitors and in line with active ETFs.”

---