Cairn Acquires Credaris Credit Hedge Fund

Apr 20 2010 | 12:04pm ET

Money manager Cairn Capital has added a Credaris credit hedge fund that has struggled to hold on to assets.

The Credaris Credit Fund will move to the Cairn platform, and five members of the fund’s team are joining the US$35 billion firm, including portfolio manager Sam Cowan and chief investment strategist Graham Neilson.

Cowan worked at Cairn before joining Credaris.

The fund has seen its assets plummet to just €17 million from €165 million earlier this year, despite posting double-digit returns in each of its four years. The fund returned 24% last year and 56% in 2008, and, as a separately-managed account, 58% in 2007 and 26% in 2008.

The fund’s largest investor, Germany’s Landesbank, yanked its investment after its lockup expired, and other investors have expressed wariness about putting their money with a small firm.

“We’ve taken away what investors have told us has been their major concern: the solidity and diversity of the platform,” Andrew Jackson, Cairn’s chief investment officer, told Financial News.

Jackson said Cairn aims to make the Credaris fund one of its flagship products and hopes to attract between €75 million and €100 million to the fund in relatively short order. Eventually, Jackson sees the fund growing larger than €200 million.

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