A Message From The Fund Manager,
Adrian Courtenay

Dear Investor,

Welcome to GA-Courtenay Special Situations Fund. We are a deep-dive research led, global equity strategy targeting excellence in investment with modest-to-low correlation to the market at large. Our investment approach targets excellence in equity investment opportunities and merger arbitrages.

Our strategy advantage

The core contention of our approach is that the optimal path is best achieved by a full review of the opportunities provided by the stock market (hence the fund’s focus on both equity investment and merger arbitrage opportunities), as well as a path targeting modest de-correlation from the market (and as such possessing the prospect of accretion of returns, by, during periods of market distress, being able to take advantage of forced selling by others).

However, whilst traditional hedge funds achieve de-correlation by market hedging, this introduces a great disadvantage – economic inefficiency. The stock market, as a dividend distributing construct whose earnings power over time also rises with inflation, is expensive to hedge over the long term. Other approaches to hedging, namely a stock specific short book, by its low forecast accuracy, can introduce comparable costs.

By contrast, with our approach, through our merger arbitrage allocations at up to one half of the fund’s capital, we can achieve modest de-correlation yet without handicapping the efficiency of the fund. The fund will only in rare circumstances hedge or ‘macro protect’ relative to the overall market, or short individual stocks. Naturally, our philosophy in this regard also means that we must limit gearing – our tolerance for leverage is only against the fund’s merger arbitrage holdings, and limited to 30% of the fund’s total assets (outside of extraordinary circumstances).

Our commitment to excellence

Since its inception in 2019, the fund has delivered net annual returns within the first decile of all UCITS hedge funds. However, today the fund also possesses significant additional advantages from the learnings which have been informed from the fund’s first five years, and these optimisations also lead to our great confidence that our best days are ahead.

Our commitment is to excellence on behalf of our unitholders: across the board robust, high quality holdings, with straightforward business models or merger agreements, and where possible the identification of such holdings at highly attractive pricing, driving performance at the fund level. However, and within this context, the fund does not tolerate the types of allocation that attempt to enhance returns by prioritising low valuation ahead of quality or robustness, which, if embraced, can lead to uncertain outcomes or instances of permanent impairment of capital.

Please do review the content of our website, including our white papers, which provide detailed analysis relating to our theory structure and selected stock specific fund holdings. The fund’s shareholder letters and quarterly webinars are also available on this website, which provide regular updates to fund unitholders.

We look forward to hearing from you, and we hope to provide an excellent long-term home for your trusted fund allocation,

Warm regards,

Adrian Courtenay