Socially-Responsible Hedge Fund Aims For 25% Returns

May 12 2010 | 3:04am ET

Socially-responsible money management firm EquityStar Capital Management will launch a new hedge fund in June with plans to invest some of its profits in impoverished African countries.

EquityStar Global Partners will be a quantitative market-neutral fund, trading only the most liquid global companies, the Washington, D.C.-based firm said. The new fund, which is targeting annual returns of between 25% and 35%, features weekly liquidity and no lockup.

In addition to the hoped-for big returns, investors can also feel good about the fund’s other mission of investing in emerging African economies. According to a release, the fund “will help give citizens of emerging nations the confidence to reinvest in their own economy by helping to open up their markets to free trade and encouraging foreign capital.”

“The 2008-2009 market deleveraging left many pricing dislocations within the capital structure. As a result there are multiple opportunities to capitalize on mispriced assets,” Steven Zoernack, portfolio manager, said. “Much of the global equity, debt, currency and commodity markets still retain valuable relative value and unique opportunities.”

EquityStar said it expects to raise $50 million for the fund, set to launch on June 1, by September and $100 million by the end of the year. The fund has a capacity of $1.5 billion.

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