Cairn Capital Launches Sub-Financials Fund

Sep 26 2011 | 11:05am ET

London-based money manager Cairn Capital will launch a subordinated financials fund on October 3 with €45 million of committed seed capital from two of the firm’s existing investors.

UK-based Stanhope Pension Trust and the San Bernardino County Employees' Retirement Association have provided the startup capital for the new fund which will target returns of 15-25% annually, focusing on financial debt instruments—particularly legacy instruments within Europe.

The fund is intended to capitalize on the opportunities it sees in the sovereign and regulatory stresses currently affecting the market, taking advantage of recent selling pressure and high levels of dispersion, reports Hedgeweek.
Cairn has used the strategy to manage pension fund assets in segregated accounts since 2009.

Said Senior Portfolio Manager, Philippe Kellerhals: “We think that the asset class offers exciting opportunities longer term, but with particular value over the next 12 months. The market is under incredible stress at this point which is providing excellent entry points to certain assets that we think are mispriced, even under selected sovereign default and recessionary scenarios. Many of these assets are fundamentally sound but oversold."
The fund will be managed by Kellerhals, supported by financials analyst Folkert Jan van de Veer.
Cairn Capital has about $24.1 billion of assets under management and long-term advisory.

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