Verity Capital Merges Two Funds

Jan 22 2007 | 5:33pm ET

Buoyed by a big year for its Verity Absolute Return Fund, New York-based Verity Capital has decided to merge its long-only fund into its Absolute Return fund, a long/short vehicle.

In a note to prospective investors, Verity called the two-year old Absolute Return fund “simply a superior product offering the up-side of our value-based equity selection with downside protection.”

The $12 million fund returned 18.34% last year, easily topping the Standard & Poor’s 500 Index, a feat all-too-infrequently achieved by hedge funds in 2006.

The Absolute Return fund invests in between 25 and 30 undervalued names, with a hedge utilizing shorted exchange-traded funds. The firms says it uses the same principles and metrics to evaluate both the long-only equity portion and to find the weakest market sectors in which to short ETFs. The fund has a $100,000 minimum investment requirement.


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