Fortress Investment Group, the US-based investment management firm, has launched a new Asia-focused fund designed to weather tough market climates.

The Fortress Convex Asia Fund began operating in 1 May with a $55 million capital. Convex funds are similar to so-called Black Swan funds, which were popular during the 2008 financial crisis for their ability to capture opportunities even when markets tumbled. The catch is that these funds act like insurance policies, where a huge payout is expected when things go wrong. 

However, in calm environments like in Asia, the funds pay regular premiums for protection on their portfolios. The decision to open an Asia-focused fund comes as instruments betting on market volatility are still relatively cheap due to the lack of imminent threats, the firm said in a statement.

"A general state of negative real interest rates across the region is fuelling asset prices and inflation in Asia and are prompting Asian savers to take additional risks in order to generate satisfactory rates of return. This imbalance of risk and return may present opportunities on a sustained basis," it added.

Fortress Convex Asia Fund is based in Singapore and is run by David Dredge and Andrew Wong, former portfolio managers at Artradis Fund Management. Artradis closed and returned capital to its investors in 2011. 

Fortress Investment Group specialises in alternative and traditional investment products and records some $43.7 billion in assets under management as of 31 December 2011.