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The fund will be managed by Mark Hawtin and target high net worth investors. It will aim to achieve absolute returns in all market conditions and have low correlation to equity markets along with low liquidity.

The manager will focus on stocks and themes well positioned to benefit from major change or innovation, as the dispersion of returns between winners and losers is often the greatest.

Mr Hawtin will also invest in themes and companies where he identifies a large difference between market value and intrinsic value.

The portfolio will typically have 100 holdings, with stock selection focusing on fundamental research to identify investments as well as operating an effective trading and risk management strategy to maximise profits and protect capital. The fund will be open for investment from February 1 2009 for a limited period.

Mr Hawtin said: "The recent performance of hedge funds has left many investors disappointed with returns as they had hoped these strategies would protect them from major market drawdowns. I am looking forward to launching a product that embodies much of what hedge funds traditionally stood for, where hedging out of market risk is considered just as important as the need to generate absolute returns."

David Solo, group chief executive officer, commented: "A key strength of Mr Hawtin’s investment strategy is his flexibility. Adopting an eclectic investment style is about making use of the best elements of all systems and ensuring that the balance between fundamentals and trading is managed according to the market environment."