130/30 fund meaning

A 130/30 fund is an equity fund using a long-short strategy: the manager shorts approximately 30% of the portfolio and uses the short‑sale proceeds to take about 130% long exposure, leaving net market exposure near 100% and gross exposure around 160%. The term is descriptive industry usage, not defined in legislation or case law. In the UK and Ireland, 130/30 strategies are commonly implemented either within UCITS (typically via derivatives to achieve synthetic shorts) or as alternative investment funds (AIFs) using physical shorting through prime brokerage. Key legal features include leverage and short‑selling controls, disclosure of global exposure and leverage (commitment or VaR), robust risk management, collateral and rehypothecation terms, and securities lending/prime brokerage documentation (e.g. ISDA, GMRA, GMSLA). Regulatory considerations include the UK Short Selling Regulation (UK) or EU Short Selling Regulation (Ireland), FCA rules (COLL/FUND) and Central Bank of Ireland UCITS/AIF Rulebook requirements. Prospectuses and constitutional documents must clearly describe the strategy, investment limits, benchmarks and risks, and set out borrowing, counterparty exposure and liquidity parameters. Usage and legal treatment are broadly consistent across England & Wales, Scotland, Northern Ireland and Ireland.