Tim Russell on being bearish in 2010 and the challenges managers face

Tim Russell is one of the stars of Cazenove's hugely successful move into mainstream fund management - he manages a small stable of hedge funds and Ucits III absolute return mandates all focused on making money through the business cycle. Unlike his closest peers such as Mark Lyttleton at BlackRock, Russell is noticeably more bearish about the UK stock market and clearly concerned 2010 could be a very difficult year for active fund managers

Let’s start with defining your absolute returns strategy? How does it actually work at Cazenove? TR: We had three aims when we started our hedge funds. The first is a return objective and everyone says they are absolute return, but our view is you can only claim to be an absolute return fund if you are going to run with a broadly market neutral structure through a cycle. Because that is effectively saying we are not taking market risk, we are trying to add value from stock selection. Anyone who is running funds and claims they are producing absolute returns while essentially 50%-100% n...