Best Non-Directional Hedge Fund over 10 Years: Shortlisted

Best Global Macro Hedge Fund: Shortlisted

Hedge Fund of the Decade: Shortlisted

The Rubicon Global Fund is a global macro fund that primarily exploits directional opportunities in global financial markets.

Fund managers Santiago Alarco and Tim Attias believe there are persistent imbalances in global economies that will result in structural inefficiencies and valuation discrepancies and offer opportunities of which they can take advantage. They use a top-down approach focusing on optimal risk/return and liquidity profiles.

The principal asset classes used by the fund are fixed income, foreign exchange, emerging markets, equities and commodities. Relative value trades are not excluded but the key focus is to identify total return opportunities.

The investment process used by Alarco and Attias is based on combining a top down fundamental macro-economic analysis with micro-economic input from the company and industry level when possible.

Focusing on the imbalances in financial markets created by the influence of economic and monetary policy, political events and capital flows, the investment process identifies dislocations and valuation discrepancies that can be exploited by appropriate directional and relative value strategies.

The core of the portfolio is constructed around medium-term investment themes that evolve from the analysis and the investment process. This will include long and short positions in fixed income and equity securities, currencies, commodities and their related derivatives.

Describing the investment process, the managers say once an attractive opportunity is identified, they will determine the best instruments with which to take the appropriate position, often deploying more than one strategy to accommodate a given theme.

These will frequently include a combination of cash and derivatives where they would seek to structure positions with an asymmetric and favourable risk return profile.

Short-term tactical positions then may be added to the portfolio to give incremental return and diversity.

The resulting portfolio is subject to risk control analysis, consistent with the long-term investment objectives of the company as well as technical analysis to assess market positioning and liquidity and to gauge the preferred entry and exit points.

Rubicon says global macro hedge fund managers are all privy to the same market data and monetary and fiscal policy information. This information is the ‘science' of the strategy but because all the information is in the public domain, it is difficult to gain a competitive advantage by having superior information.

The competitive advantage is in a manager's interpretation of the information. This is what Rubicon consider the ‘art' in its strategy.

All of the Rubicon portfolio managers have what the company terms their "preferred habitat" and are individually accountable for trades. The company says it otherwise promotes a "very collegial atmosphere amongst our portfolio managers".

This includes encouraging discussion of investment themes in the company's weekly meetings and daily on the desk.

Fund facts: Rubicon Global Fund

Full name of fund: Rubicon Global Fund
Name of portfolio managers: Santiago Alarco and Tim Attias
Name of investment/management company: Rubicon Fund Management
Contact information: Joe Leitch, 103 Mount Street, London WIK 2TJ (+44 (0)20 7074 4200; jleitch@rubicon-uk.com)
Launch date: 1999
Assets under management: $1.13 billion (at February 28, 2010)
Net cumulative performance since inception: 392.96%
Annualised return: 14.28% (at Febrauray 28, 2010)
Strategy: global macro
Share classes: US dollar
Administrator: GlobeOp Financial Services
Auditor: Ernst & Young
Custodian: BNY Mellon
Prime broker: Credit Suisse, Barclays Capital, Morgan Stanley, Goldman Sachs
Domicile: Cayman Island
Management fee: 2%
Performance fee: 20% subject to a highwater mark
Minimum investment: $1 million
Redemption/liquidity terms: monthly liquidity with 30 days' notice