Gartmore Investment Management in London will launch a European investment-grade credit hedge fund in the second half of the year, according to Richard Hodges, head of European fixed income. The fund will use cash and synthetic exposure to credit to take positions and expects to buy protection on names that have tightened too far. He declined to give further details on the size of the fund or specific strategies to be pursued.
Separately, Hodges said Gartmore is planning to start investing in credit default swaps in its European bond funds as of the end of February.
"We're seeing a lot of demand from investment-grade investors who think spreads are too tight and who are looking for alternatives to long-only strategies," Hodges said, explaining why the asset manager is planning to launch the fund now.
He added Gartmore has built up a solid track record with its existing global credit hedge fund and various currency hedge funds. Gartmore already has over £5 billion under management in 14 hedge funds across a range of strategies.
The new fund will be run by Christophe Tamet, who joined Gartmore in late 2004 from Fortis Investment Management in Paris, where he headed up European structured finance. The team will start investing in March with seed money provided by Gartmore's parent Nationwide, but will only start marketing the fund to investors in the third quarter after an initial incubation period.
