Redhedge Asset Management LLP (“Redhedge”), an FCA regulated investment manager, announced today the launch of the Redhedge Relative Value UCITS fund.

The UCITS fund has been launched to meet demand from institutional investors, such as pension funds and family offices that cannot invest in non-UCITS products and are searching for a product that is decorrelated from major financial markets. The fund will be managed by Andrea Seminara, CIO and CEO at Redhedge, and Voon Kiat Lai, Senior Portfolio Manager.

The fund applies a hedged investment strategy in developed European investment-grade credit markets, which is actively managed by Redhedge’s team of portfolio managers and analysts. The investment approach involves both a quantitative and qualitative process, and Redhedge’s quantitative model, combined with fundamental analysis, allows the team to identify market dislocations, and therefore, potential trade opportunities.

The UCITS fund is a continuation of Redhedge’s alternative investment fund, the Redhedge ICAV, that launched in 2015. It adopts the same fundamental strategy, philosophy, and principles in an adjusted form that adheres to the regulatory, and eligible investment, requirements of a UCITS vehicle. It is more liquid than the alternative fund, in order to be UCITS-compliant and be able to reach a wider audience amongst professional clients – investors will be able to subscribe and redeem daily.

Andrea Seminara, Fund Manager and CEO at Redhedge noted on the fund strategy: “We listened to our clients’ needs and are pleased to be launching the fund now to meet their demand. The UCITS fund offers institutional investors access to a market-neutral, low-volatility and risk-averse product. Through our relative value investing strategy, we look to achieve steady returns, with low volatility, that are uncorrelated to wider market movements. We take advantage of fair value dislocations in the bond market to form pair trades that are hedges of each other.”

Commenting on the market trends behind the launch, Voon Kiat Lai, Senior Portfolio Manager at Redhedge said: “The current low-rate environment has led to high cash balances and created a major challenge to invest in non-negative yielding assets, especially in credit markets. Our investment product addresses this issue.”

The initial offering period of the fund opened this month and will close on 1 March 2021. The fund will continue to be open to investment for the foreseeable future.