Fabien Pictet & Partners, a London-based hedge fund boutique with USD200 million under management, is introducing a long/short fund dedicated to emerging market debt and will have the capacity to use any type of over-the-counter derivatives. The fund, called GEMs Bond Fund, will start trading next month and although it will not use derivatives extensively, will be likely to use instruments such as fx options, emerging market bond options, credit-default swaps and listed options, said Julian Jacobson, portfolio manager. GEMs is the firm's fourth fund, but the first dedicated to emerging market debt.
The firm already has a fund that trades emerging market equity and debt, but the new fund is being created to focus on emerging debt and benefit from the high returns the asset class has posted over the past four years, Jacobson said. The fund will begin trading with USD20 million under management and Jacobson said the natural limit would be around USD150 million. He plans to trade emerging sovereigns, corporates, convertibles, distressed debt and local currency.
