Giants listed hedge fund launches

Discretionary managers, retail funds of funds and direct investors are expected to be eager investors before Brevan closes its subscription period on 8 December, and CQS a day later.

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The funds, each to be listed in London, are Brevan Howard Credit Catalysts Master and CQS Diversified.

Their flotations will signal the end of a dry period in hedge fund IPOs, although AllBlue, a fund of BlueCrest Capital Management hedge funds, has raised over £500m via new share issues this year.

The vehicles from CQS and Brevan Howard each feed into funds run only by those houses.

This continues a tectonic shift underway in the listed hedge fund universe, where such funds run by just one manager are growing in popularity, while open architecture multi-manager products – which were how the sector got started – wane in appeal.

Brevan Howard is providing access to its one-year old Credit Catalysts fund, run by David Warren at DW Investment Management in New York. Warren worked with Brevan Howard in the US, before establishing himself separately in 2009. He still manages money exclusively for the London-headquartered group.

In CQS’s case, the access is to the actively managed three year old CQS Diversified fund. This invests, without charging extra fees, in five of the $8.2bn manager’s convertible- and credit-focused strategies.

These are the flagship CQS Convertible and Quantitative Strategies, CQS Directional Opportunities, CQS ABS, CQS Asia and CQS Credit Long/Short.

CQS’s ABS fund was the best of 450 fixed income hedge funds in the two years to June 2009 that comprised the credit crunch, making 179%, according to London pension consultants PiRho Investment Consulting.

Prospective investors said the various strategies in Diversified complement one another well.

Good performance from various portfolios at CQS helped Diversified make 10.6% annualised net since inception, including 12.5% this year to 31 October, according to investors.

Michael Hintze, CQS chief executive, said the listing was “an exciting and significant new development for CQS. The company’s proposed listing on the LSE will provide investors with access to a differentiated convertible and credit-focused investment company.”

CQS said: “We believe there is an excellent opportunity set in specialist convertible and credit strategies. Volatility in credit and equity markets and ongoing dispersion of credits are creating idiosyncratic opportunities.”

 

Categories: Investment

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Tags: Hedge funds | Credit

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