Simpson Thacher represented AQR in the launch of the AQR Fusion Mutual Fund series. The firm serves as counsel to AQR LSE Fusion Fund, AQR CVX Fusion Fund, AQR MS Fusion Fund and AQR MS Fusion HV Fund (the “Fusion Funds”), each a newly organized mutual fund that is a series of an open-end management investment company registered under the 1940 Act. AQR Capital Management, LLC is each Fusion Fund’s investment adviser.
The Fusion Fund series aims to combine U.S. equity market exposure, diversifying long-short alternative strategies, and tax-aware implementation into a single, capital-efficient solution. This allows the Funds to function as both a core equity allocation and a means of accessing alternative investments.
Each Fusion Fund employs a distinct alternative strategy in combination with a strategic equity portfolio that intends to target a portfolio beta of approximately 1.0 to US equity markets over a normal business cycle:
- The AQR LSE Fusion Fund employs a long-short equity approach globally that is designed to be market-, or beta-, neutral.
- The AQR CVX Fusion Fund uses a trend-following approach seeking to benefit from price trends in four major asset classes — commodities, currencies, fixed income and global equities.
- The AQR MS Fusion Fund utilizes a multi-strategy approach. The categories of strategies employed by the Fund include: a market neutral global macro strategy, a directional global macro strategy, and an equity market neutral global stock selection strategy.
- The AQR MS Fusion HV Fund uses the same multi strategy approach as the AQR MS Fusion Fund, targeting a higher-volatility level for investors seeking more capital efficiency.
The Funds seek to maximize investors’ returns through a tax-aware investment process that aims to maximize investors’ after-tax wealth, leveraging AQR’s nine years’ experience managing long-short tax-aware strategies.
The Simpson Thacher team included Ryan Brizek, David Blass, Bissie Bonner, Andy Madore, Anna Sheu and Jamie Li (Registered Funds); and Jon Cantor and Michael Slomovics (Tax).