Thames River Capital has launched a UCITS III-structured absolute return fund of funds, taking advantage of the growing pool of UCITS III absolute return funds, the London-based investment firm said yesterday.

The fund, for which £47 million (approx $76.6 million) has so far been raised, will invest across multiple asset classes on a global basis, with a bias towards more liquid classes and developed markets. It will hold a diversified portfolio of 20-40 absolute return funds with allocations of between 1- 5 per cent of net asset value, including equity long-short, global macro, convertibles, credit, event driven, and emerging markets long-short funds, the firm said in a press statement.

Initially the focus will be on market-neutral equity and macro funds, as Thames River Capital believes equities will struggle to break their 2007 highs and that “volatile financial markets” will favour the performance of macro managers.

The fund is targeting a 5-10 per cent return with volatility of 5 per cent, and aims to outperform bonds as measured by the Barclays Aggregate Bond Index.  

The fund is being managed by alternatives specialist, Ken Kinsey Quick, and assistant fund manager, James Rous, who will be supported in this by the multi-alternative team.

“Over the past few years, many experienced hedge fund managers have established UCITS III absolute return funds and our proprietary database includes a talent pool of well over 300 absolute return funds.  Although the track records of many of these UCITS funds are short, the managers themselves are well known to us and have extensive experience managing offshore vehicles,” said Mr Kinsey Quick.

This month WealthBriefing has already reported on a number of such fund launches, including offerings from Veritas Asset Management, Dalton Strategic Partners and Pictet Funds.