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GAM Star (Lux) European Alpha

GAM Star (Lux) – European Alpha is a non-directional, equity long/short fund investing in core European markets. GAM’s experienced non-directional equity team seeks to capture sustainable sources of alpha by identifying companies with positive or negative earnings surprises, attractive valuations and price momentum. The result is a diversified, low volatility portfolio that aims to deliver steady returns across all market environments.

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Reasons to Invest

Academically proven

The pursuit of sustainable, repeatable returns, based on fundamental differentiation in stock prices, is an approach proven by historic, academic research.

Alpha generation

The analysis of company fundamentals and changing trends in earnings prospects can highlight both long and short alpha opportunities.

Absolute return focus

By harnessing both long and short opportunities, the approach has the potential to generate positive returns in all market conditions with low volatility, without taking directional risk.

Favourable outcomes over time

Times when share prices and earnings momentum have become disconnected have historically led to opportunities for momentum recovery and sustainable returns.

Our Edge

Successful team approach

The non-directional equity team has applied their disciplined and consistent approach to alpha generation since 2002, and has established a long-term, proven track record.

Skill in anticipating earnings revisions

A wealth of experience, extensive local networks and long-term knowledge of markets and companies aims to provide an edge in anticipating earnings revisions.

Robust stock selection

A clear focus on intensive fundamental stock analysis seeks to reflect only calculated, alpha-generating positions in the portfolio.

Strict focus on risk management

A methodical and consistent risk management approach seeks to protect the portfolio during times of market volatility and economic turning points.

Philosophy and Process

Investment Philosophy

The team believes that share prices reflect all available market information and this is reflected in analysts’ consensus on earnings expectations. By correctly anticipating earnings surprises (ie changing expectations on future profits), returns can be captured as prices move in reaction to news. The ‘herd mentality’ of market participants means consensus views change slowly, therefore the team seeks to stay ahead of the crowd, forming independent 12-18 month views on companies and industries. By seeking to buy stocks they believe will beat consensus expectations during the investment cycle and selling short those they believe will miss them, they aim to deliver consistent returns irrespective of market conditions.

Investment Process

Methodical idea generation and fundamental analysis provide robust stock selection. Quantitative screening of 1,000+ European stocks is combined with research to identify stocks with desirable characteristics based on earnings revisions, valuation and price momentum. The team performs bottom-up, fundamental analysis on potential investments to understand factors influencing the P&L, balance sheet and cash flow. They cross-check their views against broker consensus, industry peers and contacts and select stocks likely to exceed/miss earnings targets. Trades are sized according to conviction, volatility and liquidity to build a low beta, diversified portfolio of 120-140 stocks. Risk management includes thorough pre-trade controls, while a risk manager has an independent supervisory function.

1. Idea generation

  • Quant screen (StarMine)
  • Targeted consensus screen
  • Company meeting

2. Stock selection

  • Fundamental analysis
  • Company contacts

3. Portfolio construction

  • Pre-Trade risk analysis
  • Sizing of positions
  • Portfolio robustness continuous assessment

4. Risk management

  • Pre-trade risk controls
  • Daily independent risk oversight

Investment Team

CIO of the non-directional equity team, Gianmarco Mondani, has been successfully managing GAM Star (Lux) – European Alpha since its inception in 2003. Together with co-managers, Roberto Cantaluppi and Paolo Longinotti, the team has a total of over 60 years’ combined investment experience.

The team works collaboratively with an additional seven investment professionals to analyse changes in the drivers of company results and analysts’ perceptions across global sectors and markets, as well as the timing of when these might materialise.

The team is based in Lugano, Switzerland and were formerly Arkos Capital SA, which was acquired by GAM in July 2012.

Our edge lies in our ability to identify stocks that will surprise by exceeding or falling short of analysts’ expectations
Gianmarco Mondani, CIO.

Our Thinking

Returning to Growth 3 min read

European non-directional equity: Gianmarco Mondani

Thursday, July 23, 2020

Gianmarco Mondani discusses the opportunities in developed Europe long/short equities and whether we are moving into a “returning to growth” phase post Covid-19.

3 min read
Weekly Manager Views 3 min read

Weekly Manager Views: Equities

04 June 2020

At GAM Investments’ Weekly Equities Meeting held on 2 June, Gianmarco Mondani discussed opportunities among European equities and Davide Marchesin commented on contrasts between European and US banks.

3 min read
Weekly Manager Views 5 min read

Weekly Manager Views: Equities

01 April 2020

At GAM Investments’ Weekly Equities Meeting held on 30 March, three of our portfolio managers discussed their views on current market conditions.

5 min read

Fund Information

Resources

Fund Profile - GAM Star (Lux) European Alpha

Contact Us

If you would like us to contact you, or email you with further information, please complete the enquiry form below.

Speak to one of our client directors

If your query is urgent or you wish to talk to a member of the team, please click the button below for their contact details.

 

 

Speak to a member of the team

Key Risks

COUNTERPARTY RISK / DERIVATIVES

If a counterparty to a financial derivative contract were to default, the value of the contract, the cost to replace it and any cash or securities held by the counterparty to facilitate it, may be lost.

Leverage Risk

Derivatives may multiply the exposure to underlying assets and expose the Fund to the risk of substantial losses.

Equity

Investments in equities (directly or indirectly via derivatives) may be subject to significant fluctuations in value.

Capital at risk

All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.

Contacts

For your local contacts, please Select your Country, or visit our Contacts and Locations page.

GAM Star (Lux) European Alpha is a sub-fund of GAM Star Fund p.l.c., registered office at George’s Court, 54-62 Townsend Street, Dublin 2, Ireland, an umbrella investment company.