The fund of hedge funds advisor Ayaltis Investment Management has launched its first offshore fund, which will focus on undervalued assets in the stressed and distressed credit space, and has hired two executives to bolster its existing team.

The fund, called the Ayaltis Acantias Offshore fund, aims to make the most of the current market, which the firm sees as going through a period of “strong technical versus fundamental dislocations,” expected to last for the next few years.

Ayaltis, based in Zurich, is focused on investing in between six to eight seasoned distressed credit hedge funds with proven investment skills, leadership, innovation and management talent. The funds will be selected with the view that they present a market neutral investment bias, as global deleveraging continues.

While the debt market has improved, there are still many opportunities to achieve high returns within specific stressed and distressed credit managers in the next few years, as economic growth fundamentals are still weak, according to the firm.

“Excessive balance sheet leverage, increased low grade issuance... are creating unique investment opportunities in debt of stressed and distressed companies with a sound business, healthy asset base and attractive cash flow characteristics,” a statement by the firm said.  

The Acantias Offshore fund’s target is an annualised return of 18 – 24 per cent per annum with a volatility of 8 per cent over a three- to five-year investment horizon. The fund is up 8.35 per cent year-to-date since its launch in March 2010, reports Ayaltis.

In other news, Ayaltis has appointed Guillermo Worlicek and Massimo Martino to strengthen its existing team that manages three funds.

Worlicek joined Ayaltis from Harcourt Investment Consulting, where he worked for five years, most recently as executive director. In his new role he will be a partner, responsible for implementing a risk and quant management framework within Ayaltis.

Martino joined Ayaltis from Banca del Ceresio, where he spent more than six years as fund operations manager of six fund of hedge funds managed by the bank. He will be responsible for the complete life cycle of the fund operations service in his new role.