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Polar Capital launches Absolute Return fund

Polar Capital launches Absolute Return fund

Boutique asset management firm Polar Capital is to launch a Global Absolute Return fund.

The fund will be run by the convertibles desk at Polar Capital, and will be permitted to invest in both debt and equity, with most of the investments hedged.

The fund is targeting a return of between 5 and 8 per cent annually.

The fund will be permitted to take both long, that is investing to make money from the rise in the value of an asset, and short, that is, investing to make a return from a rise in the value of an asset, and short positions, that is, investing in a way that makes a profit from the fall in the value of an asset.

The fund will be managed by David Keetley in London and Steve McCormick in the US.

Iain Evans, global head of distribution at Polar Capital, said: "Ten years since the financial crisis and industry commentators suggest we are near the end of the current cycle.

"Before making the final decision to launch the fund, we conducted a round of pre-marketing, all of which reaffirmed our view that investors are actively looking for liquid, alternative strategies that can navigate and benefit from a more volatile environment, there is strong interest in absolute return strategies at the moment.

"Our global convertibles team is one of the most experienced convertible investment teams in the world with a long track record of outperformance in both absolute return and long-biased strategies."

The fund has an annual charge of 1 per cent, is registered in Ireland, and has no minimum investment level.

Patrick Connolly, head of communications at advice firm Chase De Vere, said: "Many investors are cautious and are looking for a degree of security and capital protection in their investment portfolios.

"In theory absolute return funds should be able to provide this, although too many of these funds charge too much and deliver too little.

"Market volatility can provide opportunities for flexible investment managers and Polar will be looking to take advantage of this, although it is a complex product and their target return may be a little optimistic for a fund focused on capital protection."

david.thorpe@ft.com