Bruno Crastes, co-founder at H2O, said the twin effect of tighter regulation and the gradual withdrawal of central bank support would cause a liquidity contraction, presenting prime conditions for this fund.
H2O said it would rely on its alpha strategies to achieve an absolute return in low or rising yield environments given the inflection point in the bond market, which he said would unlikely deliver levels of performance as seen in the last two decades.
A UK Oeic, the fund will invest across fixed income, equities and currency markets on a global basis using four key strategies: long/short; relative value and arbitrage; specific or thematic – including bond and stock picking; and short-term trading, on futures or FX markets.
The process is global, active and top-down, claiming to combine the search for relative value with full diversification in its bid to outperform one-month Libor by 4% on an annual basis over a three-year time horizon.
H2O’s CIO Vincent Chailley and Jeremy Touboul will co-manage the fund, the first Oeic launched to the UK retail market from the boutique, which also runs eight Ucits products.