Investec Asset Management launched the Sterling Target Return fund, an absolute-return fund for pension funds and other institutional investors, said John Stopford, head of fixed income. Between five and 10 investors, mainly pension funds in the United Kingdom and South Africa, have invested about $40 million, Mr. Stopford said; he declined to name them. The fund has between $150 million and $200 million in commitments from several other pension funds, he added.
The fund's benchmark is between three and four percentage points above LIBOR. Investec will spread the fund's risk over "a range of alpha sources including country and credit exposure, currency positions, duration decisions or yield curve positioning and may include emerging market debt, high yield or index-linked bonds," according to a news release.