SVG launches hedge fund

The private equity investor and asset management company has launched its first hedge fund to exploit its proprietary investment techniques to the full.

SVG Investment Managers, the asset management arm of SVG Capital, a listed private equity investor and fund manager, has launched a hedge fund using private equity techniques and further blurring the alternative asset class lines.

It is the company’s foray into European quoted markets and it plans to cap the SVG European Absolute Return Fund on €200 million with a €20 million seed investment from its parent. It will list on the Irish Stock Exchange in April after an extensive road show run by its broker UBS.

Adam Steiner, head of research, public equities SVG, said: “We always intended to do Europe when the time was right. The hedge fund enhances the strengths of the investment process of our existing products. Stock selection is what drives our returns not the markets.”

He said investors were looking to increase absolute returns and reduce market risk. According to Steiner the SVG public equity team could point to the success of its SVG UK Focus Fund and SVG UK Alpha Strategy, which have delivered high risk adjusted absolute returns for investors from UK quoted equities.  

Structured as a European long/short equity hedge fund, the fund’s investment objective will be to generate a return in excess of 15% per annum with low volatility. The team will look to invest in an average of 35 to 40 stocks in both long and short positions targeting companies with market capitalisations greater than €100 million for the long positions and €500 million for the short positions.