Man Plans Black Box Sovereign Debt Fund

Apr 20 2012 | 2:24am ET

The Man Group's year-old Systematic Strategies unit is readying a quantitative sovereign debt hedge fund.

The Man Systematic Fixed Income Fund will be Systematic Strategies' fourth—a quantitative commodities fund was launched last month. The unit is still working on the strategy and Man declined to project a launch date, Reuters reports.

The new fund will seek out dislocations in government bond markets, hoping to attract investors who agree with MSS's bleak outlook for the asset class.

"Traditional fixed-income investing [is] unattractive," MSS wrote in a note. Among the problems are "yields close to zero percent, increased credit risk in many government bonds," and "little upside [and] big downside of being long bonds in [the] current environment."

But, MSS says, "market inefficiencies [are] likely to prevail in fixed-income markets, creating investment opportunities."


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