Polar absolute return fund will have convertibles focus

Long/short fund will target 5-8% with limited downside

Investment firm Polar Capital has rolled out a long/short absolute return vehicle to be managed by its global convertible team.

The Global Absolute Return Fund Ucits will be run by David Keetley (London), and Steve McCormick (Connecticut), supported by David Sugarman and Jake Collins in London along with Uttkarsh Lal in Connecticut.

The Irish-domiciled fund will invest predominantly in convertible securities, with the flexibility to invest in both corporate debt and equities. Most positions will be hedged.

It is “targeting a 5-8% net return with limited downside and a return volatility of around 6%” and has been launched due to investor demand.

Long convertible positions

David Keetley, global convertible portfolio manager at Polar Capital said: “This new fund has characteristics of a long/short equity fund, except that the long exposures are generated through long convertible positions.

“It also has some characteristics of a convertible arbitrage fund. The investments we make are split into five categories: equity hedged convertibles, asymmetric profiles, put trades, income/defensive investments and covered convertible call writing.

“The current market environment is creating many excellent investment opportunities for teams with the right skills. These are ideal market conditions for this team and for this fund.”

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