The fund will be managed by both Barry Norris and Oliver Russ and will look to achieve an annual return of 10 per cent.
The Argonaut European absolute alpha return will have 40 long positions and 30 short, with the 30 per cent in cash at launch. The fund will also have 20 pair trades which, combined with the shorts, will see the funds exposure fall from 70 per cent to 10 per cent with each stock position accounting for 1 per cent of the portfolio.
Both Russ and Norris have been running a paper portfolio for the fund which the group says has returned 5 per cent in the past three months.
The managers will also hedge all non-Sterling currency into Sterling to reduce risk.
The fund is set for a September launch, subject to FSA approval, and will have an initial and annual charge of 5.25 and 1.5 per cent respectively. It will also charge a 20 per cent performance fee on absolute performance of 5 per cent or above subject to a high watermark.