The fund, which is subject to FSA approval, will launch on September 7 and will target a return of 10 per cent plus over the medium term. It will be managed by Neil Pegrum and Paul Marriage and will focus on small and mid-cap companies. The product will adopt an unconstrained approach by holding 30 to 50 UK stocks in both long and short positions.
Absolute UK dynamic will adopt a similar approach to Pegrum’s existing hedge fund, which was launched in May 2005. Synthetic shorting on the fund will be through contracts for difference.
Cazenove expects the fund’s long positions to be similar to the hedge fund as well as the group’s UK dynamic fund, a sub-fund of the Oeic, which Pegrum launched in 2004.
Pegrum says: “Following the launch of my hedge fund which has exceeded our initial expectations, I am excited to be launching this new Ucits fund. Paul and I believe that our approach and experience are well suited to providing investors with attractive returns, with a relatively low level of volatility.”