Invesco launches its first hedge fund outside US
GLOBAL- INVESCO is to launch its first hedge fund outside of the US, aimed at institutional investors and wealthy individuals in Europe. The INVESCO Absolute Return Fund, as it is to be known, will be a Dublin-domiciled, open-ended investment company and will aim to provide an annual net return of about 10%.
Large cap US equities, S&P500 stock index futures and US Treasury Bond futures will form the fund’s investment base, with strategy combining a bottom-up long-short neutral approach with a top-down futures strategy.
The fund will be managed by INVESCO’s structured products group based in New York and will launch 1st November 2002.
Brett Bastin, head of product development for absolute return strategies at INVESCO claims the fund will have two distinct advantages– risk-adjusted absolute returns for investors in a variety of market environments, and low correlation to traditional assets.
Hedge funds are expected to see significant growth in Europe over the next five years partly as they are seen to be low in volatility as their returns have little correlation with equity markets, and as alternative investment styles become increasingly accepted and understood.
In 2001, the average asset allocation across Europe is estimated to have been 0.4% in hedge funds (e60bn), according to consultants Oliver, Wyman and Company and UBS Warburg. It is expected that this will grow by one percentage point within the next four years so that by 2006 asset allocation to hedge funds will be e298bn – an annual growth of 38%.