Threadneedle Investments has launched a third hedge fund in its Crescendo series ' a fixed income hedge portfolio run by the firm's head of fixed income, Robert Stirling.
Cayman Islands-domiciled, Crescendo Credit joins the Crescendo UK and European-focused portfolios and will invest in fixed income securities and related derivatives in a combination of investment-grade, emerging market and high yield debt.
The fund started with around $20m seed capital and offers both dollar and euro share classes.
Dealing will take place monthly for the fund, which carries a minimum investment of $250,000. There is the standard 1.5% annual management fee and a 20% performance fee payable on investments.
Threadneedle has indicated it will mainly target the fund of hedge funds market with the fixed income product, which will draw on the experience of Threadneedle's 16-strong fixed interest team that is responsible for overseeing £16bn in assets.
Stirling said the amount of corporate credit had both diversified the market and greatly improved liquidity. 'This has produced new investment opportunities for long/short funds that actively research and manage credit across the whole spectrum,' he added.
Threadneedle is one of at least three UK retail asset management groups groups launching or considering tranching hedged portfolios. Axa Investment Managers has launched a currency and sector-market neutral statistical arbitrage fund, the Axa Vectris II, which will go long and short large-cap stocks in major stock markets. It is implementing the strategy in three sub-portfolios ' France, the UK and the US.
The fund will use two short-term mean reversion models with daily and weekly time horizons to capture short-term price movements, to hit 12%-14% annual returns on volatility of 10%.
It follows on the heels of Axa's launch of an onshore French structure using the same statistical arbitrage strategy, but with a lower volatility target of 5%. Launched at the end of 2001, it returned 6.64% in 2002.
Cazenove is considering launching hedge funds for Tim Russell, the fund manager who came to the asset management house from HSBC, where he ran the firm's Growth and Income fund and a market neutral hedge fund.
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