UK - Two new investment houses are entering the UK institutional market with services aimed at the European pension funds arena.
Cowen Asset Management has been unveiled in the UK by a team of four who previously worked at Swiss Life Asset Management, as the long-only boutique of US investment bank Cowen Group, to initially target small to medium-sized pension funds and multi-manager investors interested in global equities.
Prime Rate Capital Management, meanwhile, is hoping to tap into recent turbulence within the credit markets by launching a range of liquidity and "cash enhanced" services offering AAA bond stability with same-day access to cash, as well as delivering segregated accounts when requested.
Prime is a joint venture with Matrix Group to be launched after gaining regulatory approval from the Financial Services Authority, and is headed by chief executive Chris Oulton, previously head of money market sales at Insight Investment alongside former Insight colleague Judith Benson as chief operating officer.
Ann Ellis, sales and marketing director at Cowen, said the firm has been created by ceo Mark Amery, Madelaine Barker, Malcolm Thomas and herself to offer a range of five open-ended unit trusts (OEIC) - UK, US, Europe, Far East and global focus funds - which will hopefully tap into the cash-generative companies through a bottom-up stockpicking strategy.
Ellis said has been strong interest from UK-based pension funds and investment consultants, arguing pension funds have been reassessing their interest in hedge funds following the turbulence of reaction to US subprime mortgage packaging and subsequent investments taken by hedged investors.
Moreover, the intention is to extend its presence into Europe at a later date, including Ireland through the Irish exempt investors space.
"[Pension funds] are re-evaluating the benefits they get from hedge funds so we believe there is space for new long-only products. We are seeing very few long-only houses launching into the market, particularly in global equities, and we have had a lot of interest and good discussions with consultants because we are long-only," said Ellis.
In contrast, Prime Rate intends to focus on offering qualifying money market funds (QMMFs) following changes to the European regulatory regime, which now allow QMMFs to exist in their own right instead of as an investment of mutual funds.
QMMFs are restricted in their investment universe compared with money market funds, as they must be AAA-rated, have a constant net asset value, along with amortised cost accounting and a weighted average maturity of under 60 days