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Investment News

Pie Funds founder disappointed strategy hasn’t worked

Pie Funds is closing its Multi Strategy Fund, citing poor returns.

Monday, November 25th 2019, 6:23AM

The fund has had a loss of 5.6% per year since it launched, and overall has lost almost 10%.

The fund, launched in September, used multiple strategies, with a bias to equities – including short-selling to protect and grow capital.

In a letter to investors, funder Mike Taylor said the fund would be transitioned to cash, effective immediately.

"We have removed all fees, also effective immediately. All investments, switches and withdrawals are suspended with immediate effect, until the fund has transitioned to cash and we pay investors out. Given the deliberately liquid nature of the fund’s holdings, we expect the transition to happen quickly. We are above 95% cash already. We will be in touch again shortly, to confirm when the transition is complete and pay-outs can occur."

He said it was disappointing for him personally and for the Pie team.

"I am one of the largest investors in Multi Strategy. Back in 2016 we saw the need for a multi-strategy fund for New Zealand investors and I didn’t think there were any good products in the market. We tried to innovate and do something different from our usual, and successful investment formula.

"But Multi Strategy hasn’t performed. It has been incredibly frustrating having one of our funds falling so short of investor expectations. As we said in our July investor communication, we reviewed and adjusted the underlying strategy and have been using it since then. But results have not improved. We considered looking at the strategy again, but decided it was better to stick to what has successfully grown investor wealth over the long-term – long-only active investing.

"We’ve accepted the only thing to do is to prevent further reduction in Multi Strategy’s unit price by moving to cash, prior to closing the fund. It means investors paid out from the fund will be treated equitably. We believe this is in the best interests of all Multi Strategy investors."

In September Pie Funds closed its emerging fund completely but opened its growth, dividend and growth 2 funds to new investment.

Tags: investment investment fund pie funds

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