The fund, which is subject to FSA approval, will launch on September 7, 2009, and will target a return of 10 per cent plus over the medium term.
The fund is to 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 shorts position.
Absolute UK dynamic will adopt a similar approach to Pegrum’s existing hedge fund. Synthetic shorting on the fund will be achieved 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.”
Cazenove director of investment funds Robin Minter-Kemp says: “Neil and Paul have successfully worked together for six years in managing absolute and long strategies. The proposed launch of the Cazenove Absolute UK Dynamic Fund will complement both Neil and Paul’s extensive stock selection experience across the UK equity market combining both managers’ skills in one product.
“The fund further enhances the availability of competitive products within the IMA absolute return sector generated by clients’ needs for uncorrelated returns away from equity market risk.”