UK - German bank WestLB’s asset management arm has made its first foray into the hedge fund market with the launch of an absolute return fund that it expects will generate “significant” returns in excess of cash.
WestAm said in a news release that it has launched its first hedge fund. The Navigator Global Fixed Income Absolute Return Fund aims to generate significant returns in excess of cash – measured against the London Interbank bid rate – “through directional and non-directional positions in developed fixed income and currency markets”. It is aimed at the fund of funds market, it added.
Management of the fund began on September 23.
“Returns generated by the fund are expected to be relatively uncorrelated with traditional asset classes, including fixed income,” it added.
The bank added that risk management is an integrated component of the investment process in a bid to avoid stock market volatility and provide some “downside protection”.
WestAm has 2.27 billion euros of European pension assets under management out of a total of 38 million euros under management.
The fund would be run by Nigel Jenkins and Moe Daniel. Jenkins is chief investment officer of the firm’s fixed income and currency team.
WestAM added that it is already planning to launch a second hedge fund. This will be the WestAM navigator Multi-Strategy Fund, to be run by Frank Naylor and Thomas Tilse.