Fund manager Pengana Capital, in which National Australia Bank has a minority interest, is preparing to launch a new Australian equities market neutral fund.
"We are just about to take to market an Australian equities market neutral fund," Pengana head of distribution Denis Caroll told InvestorDaily. "We've got that in incubation at the moment."
The fund will be launched within a few months, Caroll said.
Market neutral is a method commonly used by hedge funds to create returns from volatility in the market.
Although there are many different ways to use this method, it often involves taking matching long and short positions in different stocks to increase the return from making good stock selections.
"[The fund] targets generating alpha out of exposure to Australian equities," Caroll said.
Pengana has hired two people to help run the fund, one of whom joined from Barclays Global Investors in the UK.
"We've got some very experienced people who have had previous experience with quant fund managers that have built the product," Caroll said.
He did not want to name the managers until the fund was closer to its launch date.
Initially, the new fund will be aimed at the wholesale market.
"We think there is a definite need for quant, market neutral-style managers in Australia," Caroll said.
