Legal & General to launch third hedge fund

Date: Thursday, January 7, 2010
Author: Joanne Harris, HedgeFunds Review

Legal & General Investment Management is launching this month its third hedge fund. The company aims to attract up to $1 billion of investment from funds of hedge funds (FoHFs) and family offices for the fund.

The LGIM Global Opportunities Fixed Income Fund will invest across a broad spectrum of fixed income assets, with no restriction on region or strategy with a particular focus on investment grade credit.

LGIM head of high alpha fixed income Richard Hodges and head of credit Christophe Tamet have been running the fund since July 2008 using internal seed capital.

Assets under management are currently around $45 million. The fund has returned almost 18% since inception with only two negative months. Tamet said capacity could reach $1 billion.

The fund will be marketed to FoHFs, family offices and private banks in the UK and continenatal Europe. LGIM head of hedge fund distribution Philippe Broadhead said it would appeal to "sticky" investors seeking capital preservation. Broadhead added that the fund should do well in any economic climate.

The fund is domiciled in Dublin and denominated in US dollars with the minimum investment being €250,000, payable in dollars.

Broadhead said Ireland gave investors the benefits of an offshore jurisdiction but within the European Union.

Redemption is monthly. The yearly management fee is 1.5% with a performance fee of 20%.

HSBC Ireland is the fund's administrator. Barclays Capital and Morgan Stanley are the prime brokers. LGIM took legal advice from Simmons & Simmons.

LGIM also runs macro and UK small companies equity hedge funds.