UBS (Irl) Investor Selection - O'Connor China Long/Short Alpha Strategies

The UBS O’Connor China Long/Short Equity fund is a fundamentally driven, high conviction low net equity strategy focussed on China A Shares and offshore listed Chinese companies (HK, Taiwan and US ADRs). The portfolio is run by Jia Tan, who joined O’Connor in 2019 (previously at Och-Ziff Capital Management), and is supported by a dedicated team of 3 analysts (sector specialists), all based in Shanghai. The team seek to generate returns with low correlation/beta to the reference market by employing primarily a relative value investing philosophy where long ideas are typically reflected by shorts within the same sector/industry. Nonetheless the team retain its ability to take directional sector view should opportunities arise. The investment process is based on in-depth fundamental bottom up research supported by insights from the team’s extensive network and local presence. Due diligence is undertaken through regular corporate meetings, leveraging sell side and proprietary research, with a core focus on understanding the strength of a company’s competitive model vs. peers. The final portfolio typically comprises 100-120 names, with decent concentration particularly on the long side (max position size is 8%). The short book is more diversified by construction and primarily made by single names (up to 30% of the fund gross short can be invested in indices for hedging purposes). The fund is run with a conservative net exposure -/+30% (vs. 14% on average since inception) whilst gross leverage is actively managed through the cycle, ranging from 200% to 300% (in March 2020 reached a low point of 100%). Accordingly, portfolio $ turnover is expected to be relatively high, approx. 5x p.a.