Investment trusts of hedge funds and onshore absolute return funds make up the bulk of the diversifier fund.
Hasley believes these funds achieve better returns than fixed income by investing in asset classes that have low correlation to equity markets.
It invests in hedge funds through the investment trust route to gain access to a diverse portfolio of hedge funds with liquidity while benefiting from the tax treatment of investment trusts that is not available to funds of hedge funds.
The diversifier fund holds around 20 per cent in cash but Hasler says this is an unusual position that reflects it being a new fund looking for suitable investments. It expects to reduce the cash weighting soon by adding one or two holdings.
Discounts recently emerged on some investment trusts, particularly those that focus on hedge funds with long/short strategies. Many discounts have now narrowed and some of diversifier’s holdings have appreciated but the discounts that remain represent further buying opportunities.
Hasley is also diversifying into life settlements by holding EEA Fund Management’s Epic life settlements fund in diversifier and its multi-strategy fund.