The company is raising capital for the fund – its third fund of funds – before launch. It will invest in funds across Europe that have a medium to high risk and return profile and have a target return of 14 per cent a year.
As the name suggests, the fund will be more opportunistic than Arlington’s UK and eurozone funds of funds. The eurozone fund of funds was launched in July 2006 and has an annualised target return of 10 per cent.
The UK fund of funds followed in February this year and aims to outperform the HSBC/AREF All Balanced Funds index by 0.5 per cent a year over rolling three-year periods. It invests in UK property funds that have a low to medium-risk profile.
Arlington is also raising money for the UK fund of funds to increase its size to £250m. This fund is currently invested in office funds but Arlington says it is making new investments to balance the portfolio in other areas as its funds under management increase.
Portfolio manager Morgan Angus says: “We are essentially taking a three-pronged approach with our funds of funds. We hope to launch the adventurous fund in the next three to four months but that depends on how much capital we raise.
“Our UK fund of funds has performed well so far. We have found good value in some of the office funds and we have already recovered our purchase costs in two months. The target is to raise £250m for this fund but we know it is going to take a little while to achieve.”