Hedge fund Zadig Asset Management is going long-only.
The London-based firm will launch the new vehicle today, Bloomberg News reports. The Zadig Memnon Fund will be a concentrated affair, investing in no more than 30 companies, but will have a big appetite for assets, all the same: Zadig may raise as much as US$4.1 billion for the fund.
Memnon is having a more modest start, set to debut with €140 million. The fund aims to capitalize on what Zadig sees as unreasonably low valuations in the stock market as skittish players run the other way.
“People have been exhausted by the equity markets,” managing Partner Pierre Philippon said. “You had the tech bubble and the subprime crisis, and they have just lost complete faith. It’s gone too far on the side of cheapness.”
Among the stocks eyed by fund managers Laurent Saglio and Vincent Bourgeois are Banco Bilbao Vizcaya Argentaria and Nasdaq OMX, Philippon said. The duo are targeting returns of 10% annually in excess of the MSCI Europe ex-U.K. Index.
Saglio has been at Zadig, running its €300 million flagship hedge fund, for more than five years. Bourgeois joined the firm from HSBC Holdings in December.