Acuitas Investments Launches Long/Short Equity Strategy

Multi-manager firm builds on its microcap and small cap manager research expertise to offer absolute return strategy

SEATTLE--()--Acuitas Investments, LLC, an investment firm offering multi-manager solutions in microcap and non-U.S small cap markets, has launched a long/short equity strategy, the company announced today. The firm’s investment philosophy centers on exploiting the return opportunities available in the least efficient areas of the equity markets. Acuitas’s long/short strategy seeks to deliver high absolute returns with low correlation to equity markets, building on the firm’s expertise in researching microcap and small cap managers.

“Offering a return-focused long/short product with limited net market exposure is a natural extension of the work we do for our existing strategies, as we have been researching long/short managers as part of our investment process since our founding in 2011.”

“Underfollowed areas of the equity markets such as microcap offer opportunities for skilled investors to generate an information advantage and deliver strong returns. This is the basis for Acuitas’s exclusive focus on microcap and small cap markets globally. Implementing in a long/short strategy enhances managers’ ability to exploit these return opportunities through their ability to short,” said Chris Tessin, Managing Partner at Acuitas.

With equity volatility rising, but many investors expecting lower returns from traditional investments, Acuitas believes market participants are increasingly looking for unique sources of returns with less volatility and low correlations to their existing portfolios. The firm’s long/short product is a multi-manager strategy intended for plan sponsors, endowments, wealth managers, and other institutional investors. It will be offered in a commingled vehicle as well as in separate accounts for larger investors.

Acuitas’s research indicates that microcap and small cap stocks remain an “undiscovered” asset class. According to the firm, of the estimated 5,200 publicly traded securities with market caps under $1.5 billion and at least $500,000 average trading volume traded globally, over 60 percent have no sell-side analytical coverage. Acuitas believes this gives skilled professional investors an opportunity to generate an informational advantage that will result in strong returns.

“In the inefficient areas we target it is critical to identify great managers early in their life cycle when assets are low and their ability to generate returns is the greatest,” said Dennis Jensen, the company’s Director of Research. “Offering a return-focused long/short product with limited net market exposure is a natural extension of the work we do for our existing strategies, as we have been researching long/short managers as part of our investment process since our founding in 2011.”

To identify potential managers, Acuitas employs a fundamental research process supplemented by quantitative analysis, while also taking into account the unique qualities of the capacity-constrained asset classes. The research includes a comprehensive analysis of the manager’s investment process, philosophy, management team, and risk controls.

“Our goal is to identify strong, alpha-focused managers before they turn up on other institutional investors’ radar screens,” added Jensen. “We’ve done this with our long-only products, and we utilize this same approach in the long/short space.”

About Acuitas Investments LLC

Based in Seattle, Washington, Acuitas Investments, LLC is a boutique investment management firm providing access to capacity constrained, inefficient areas of the equity markets through its multi-manager platform.

Acuitas is built on the pillars of exceptional research and a focus on investment excellence in inefficient markets. The firm’s investment team seeks to leverage what it believes are inefficiencies due to lack of institutional attention in global small and microcap stocks to deliver superior returns for institutional and high net worth clients. Acuitas investment professionals are recognized as industry leaders in investment manager research and multi-manager portfolio management.

More information about the firm can be found at www.acuitasinvestments.com.

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Mike MacMillan, 212-473-4442
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Chris Sullivan, 212-473-4442
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