Laxey Readies UCITS-Compliant Investment Trusts Hedge Fund

Feb 18 2010 | 2:15am ET

Laxey Partners is the latest hedge fund to join the UCITS III bandwagon with a fund that will invest in investment trusts.

The London-based activist firm plans to launch a Dublin-domiciled absolute return fund that seeks to profit from discount volatility in investment trusts, the Financial Times reports. While the new vehicle will be a passive investor, it will often invest in the same trusts as other, activist Laxey funds, potential boosting the hedge fund’s strength in battles with management.

Laxey sees an opportunity in a sector where widespread activism before the economic crisis kept discounts to net asset value low.

“Hedge funds have more redemptions and deleveraging to go through so we think the extra-tight discount discipline that was producing will be absent for the foreseeable future,” Laxey co-founder Andrew Pegge told the FT.

The firm said the new fund would meet client demand for onshore hedge funds.

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