UK/IRELAND – Barclays Global Investors (BGI) in London has launched a new, high return market neutral hedge fund, a higher risk version of its UK equity market neutral fund.

Kevin Coldiron, managing director of market neutral strategies at BGI, says that hedge fund of funds investors have shown a high level of interest for some time in a higher-return version of BGI’s market neutral strategy and have been content for BGI to use “moderate amounts of leverage to achieve this”.

The new Dublin-based fund, benchmarked against the three month LIBID is available in sterling and US dollar hedge share classes, offering weekly liquidity.

The fund aims to deliver a return of 10%pa above the risk-free or cash return, after fees; to maintain a return volatility of 10%pa and be independent of the return on UK or global equity markets.

Comparatively, the BGI UK equity market neutral fund, launched in October 2000 with £15m(€24.5m) – currently at £100m with investments from pension funds, insurance companies and hedge fund of funds – aims to deliver a return of 5% pa above the risk-free or cash return, after fees and maintain a return volatility of 5% relative to the benchmark. Since its launch the fund has delivered a net annualised return of 11.6%, says BGI.

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