Multi-strategy fund of hedge funds FRM Diversified Alpha has raised £61.8 million (US$122 million) by listing on the London Stock Exchange.

The FRM Diversified Alpha fund, managed by Guernsey-based FRM Investment Management, invests in a diversified portfolio of hedge funds including equity long/short, specialist credit, relative value and directional trading.

FRM began managing diversified funds of hedge funds in January 1998 and currently manages more than US$10 billion in this strategy for institutional investors, including around 300 pension funds.

Paul Dunning, chief executive of Financial Risk Management, the group's U.K.-based investment adviser, said the fund appeals to investors looking for an equity or fixed-income substitute because of its ability to produce consistent absolute returns in various market environments.

Founded in 1991 by Blaine Tomlinson, the FRM group has more than US$15 billion in fund of hedge funds assets.