Monday, October 08, 2007

Funds - What's In a Name?

I am sure we are all guilty of using industry buzz words. I am not so bad after years away from the front lines of broking where even potential lady friends were, in moments of extreme male chauvinism, classed as 'long' or 'bid only'. My favourite industry jargon of the moment however is "Recovery Funds". The phrase is, obviously, a nice way of saying that the fund takes advantage of other people's problems in selling whatever it is that the fund invests in.

For example Société Générale Asset Management is launching the SGAM Invest Bonds Recovery 2007, a fund aimed at sophisticated investors that seeks to take advantage of the 'attractive' pricing levels on the European securitisation and credit markets.

SGAM Invest Bonds Recovery 2007 is a French-registered mutual fund with a minimum investment level of EUR1m. It looks to take advantage of the opportunities arising in the wake of the liquidity crisis in credit markets by focusing on the attractive pricing levels of securities and seeking to capture the liquidity premium.

The portfolio is mainly invested in securitisation vehicles, chiefly asset-backed securities issued in the eurozone, and bonds issued by European companies and banks. Supported by SGAM's expertise in credit analysis, the management team pays particular attention to selecting securities with high credit quality that have strong upside potential.

There are a few funds that tell it like it is such as my particular favourite 'Pirate Capital'. Journalist have had a field day with a Bloomberg article introduction saying "Tom Hudson and his pirates had a blunt message for Canadian ski-resort owner Intrawest Corp.: ``Surrender the Booty.'' Pirate Capital was the largest shareholder and felt that this fact made it this boss and when the company was valued at a level below what Pirate Capital thought it should be Bloomberg says "they spied treasure".

They have funds called 'The Jolly Roger Activist Fund' and flaunt their 'booty' motto on baseball caps. Some see it as a bit spivvy, personal I like least you know what you are getting when they invest in your firm.. The 41 old Hudson started his particular line of thought in his hedge fund 'Blackbeard'.

Perhaps then, some funds could be more aptly named. SocGen could have called theirs "The SocGen Bottom Feeder Bond Fund" or "The Credit Crisis Bond Fund" these would have been much more appropriate names and a lot more fun.

UBS could learn from this. The 'UBS (Lux) Key Selection Sicav - US Equities 130/30 B' could have been "The UBS Wizzo New 130/30 US Equities Investment Fund".

Instead of looking through lists and lists of funds with names that look like they are from some sc-fi movie or maths geek fantasy list, wouldn't it be much easier if more people told it like it is?

Looking for an aggressive activist hedge fund? Invest in "The Global Corporate Board Bully Fund" or you maybe after a quant fund, perhaps I could interest you in "The Computer Traded Equity Fund". Maybe you are more interested in a less aggressive mutual fund "The Boring and Not Great Performance But You Can Sleep At Night Fund"..I am sure this would be a lot easier.

Anyway, that's enough for today, I need to get back to "The Invest In Euro PIPE Individual Swiss Account Facility" that we operate. OK, I can see the downside of this particular naming solution....

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