Acadian's long/short capabilities aim to provide diversification in a broader portfolio of investments. Our goal is to offer strategies that are uncorrelated with equity benchmarks and other traditional asset classes and indices.
We manage a number of strategies ranging from beta-zero (market-neutral) to beta-one (equity benchmark-oriented extension strategies). In addition a number of existing well defined strategies, we work closely with our clients to deliver bespoke long/short solutions meeting their specific needs.
Attributes & Approach
The ability of long/short strategies to pursue absolute returns, while aiming to neutralize unrewarded systematic risks, results in the purest expression of our return forecasts. Most of our strategies have a return profile that we seek to be independent of equity market behavior.
The focus on absolute return and risk management allows us to maximize portfolio exposure to the stock selection factors that we believe are likely to deliver the desired excess return over the market cycle. Most of our strategies will have intuitive long (short) exposure to companies with strong (weak) fundamental and technical attributes, from valuations to short-selling and options market activity.
At the core of our approach is the systematic evaluation of fundamental and technical attributes of any given company. We leverage more than 60 individual indicators which have long-term evidence linking them to excess returns. These indicators most often can be classified as Income Value, Asset Value, Quality, Growth, and Technical. Importantly, while some of these attributes may be related to fundamental characteristics, our goal is not to gain exposure to these ‘factors’ in our portfolios. Instead, our stock selection process focuses on a limited number of investment opportunities, which are simultaneously attractive along multiple dimensions.
Risk management is equally important to our approach. Each strategy is designed to focus on maximizing investment opportunities while eliminating, to the extent that is possible, uncompensated risks, from market beta to transient macro risks.