Pioneer Alternative Investments (PAI) is to close one of its flagship single-strategy hedge funds at...
Pioneer Alternative Investments (PAI) is to close one of its flagship single-strategy hedge funds at the end of March.
Even though the e153m fund is intended to have a conservative risk approach, it has under- performed the CSFB Tremont hedge fund equity market neutral index since autumn 2003.
The closure of the fund has been attributed by PAI to difficult market conditions. A statement said: "A combination of low inflation, low interest rates and limited volatility has produced a difficult backdrop for fixed income arbitrage related strategies. Acceptable returns in the future may only be generated by adopting an unacceptable degree of risk."
Capital from the fund will be returned to investors by 10 April.
PGO is a global relative value hedge fund primarily investing in fixed income and foreign exchange markets. PAI said the fund targeted an annual return in the 'region of Libor plus 500 basis points while maintaining a conservative risk level in the region of 5%'.
£300bn of liabilities
View from the front row
Transfer from occupational scheme
Appointed by FCA and PSR boards