United Kingdom fund-of-hedge-funds manager Fauchier Partners is looking to appoint more managers to its absolute return fund, eyeing opportunities in the specialist credit and equity hedged sector.
Fauchier's Jubilee Absolute Return Fund contains about 20 underlying hedge finds. The fund has a number of strategies, including macro, volatility trading, fixed income, event driven and multi-strategy.
The firm plans to beef up its portfolio to about 30 managers.
The fund already invests in equity hedged and specialist credit strategies. The firm planned to add more managers that specialised in those strategies due to emerging opportunities, Fauchier Partners partner Dan Higgins said.
"Value is clearly beginning to emerge in the market [specialist credit]. Credit spreads have already widened. We now see opportunity specific to hedge funds," Higgins said.
"At the moment, senior-secured bank debt provides most attractive risk/return pay-off."
The firm, however, would "proceed with caution" during the manager hiring process, he said.
"Credit is still a risky area and managers need to be very specialised. Given the illiquid nature of the sector we will be cautious before expanding into such strategies," he said.
Equity hedged was another strategy offering value, he said.
"Equity hedged is already showing very attractive potential. Currently substantial valuation differentials have arisen between stocks," he said.
Despite the shake-out in the global hedge fund market, he said hedge funds were poised for strong performance.
"Uncertainty has lifted surrounding year-end redemptions with systemic risk falling as short-selling bans continue to be lifted around the world," he said.
Fauchier Partners, which was founded in 1994, has $8 billion in funds under management. BNP Paribas bought a 50 per cent stake in the company in 2004.
Australian institutional clients include REST, CareSuper and Connect Super.
