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The company is sounding out select IFAs and discretionary managers to discern demand.

It is thought Gartmore will make use of wider Ucits III powers, which could include the use of covered calls, to create a new range.

Although the company said there were no firm products in the pipeline, Phil Wagstaff, global head of distribution at Gartmore, said these concepts were being considered.

He explained: "Gartmore has a strong hedge fund business and a strong long-only side, so we might be able to do a hybrid product, such as an absolute return or 130/30 fund."

He added: "We are looking at that space and are gauging reactions, but there is nothing on the drawing board at the moment."

Mr Wagstaff said while absolute return funds were popular, it was important to discern a product type that would find favour irrespective of market movements.

"We have to look at the whole range and see what our capabilities are, as well as what demand is on an on-going basis, and where we can add value," he said.

"It is an interesting space and we would like to explore the ways we can do something for clients in that area."