“We have one market-neutral manager, who is very traditional with a short book and a long book. Every month he neutralises beta by buying futures,” says Bouma.
“We have a second long/short manager with a quantitative strategy [F&C Global Equity Market Neutral], and our third manager is totally different: it’s a volatility-arbitrage fund [the small Dutch boutique manager Mint Tower], that trades volatility and convertibles.”
It’s all about liquidity
There is one fund selection criterion that overshadows all others when it comes to absolute return: his funds have to be liquid.
“That’s our main goal,” says Bouma. “We’ve been through 2008 with side pockets and we don’t want to go through that again,” he explains.
Click here to watch part one of this interview, in which Bouma explains why he only recently started investing in absolute return funds.