CQS (UK) launched its latest fund, CQS ABS Alpha Fund, with $140 million of assets and immediately “soft closed” the fund to new investors, according to a client letter obtained by P&I Daily.
The new fund has additional commitments of $60 million through April 2, and CQS noted in the letter that “further inflows will be contingent on market opportunity and hence the fund has been soft closed at launch.”
Michael Rummel, a CQS spokesman, said in an interview that the CQS ABS Alpha Fund was “launched following the significant widening of credit spreads and the downward revaluation of the asset backed-securities sector during the second half of 2011.”
Alistair Lumsden is the fund's portfolio manager, Mr. Rummel confirmed.
Compared to the existing CQS ABS Fund, the CQS ABS Alpha Fund will have higher leverage, lower hedge ratios and higher concentrations in less-liquid strategies and therefore will have a one-year soft-lockup period and a 25% maximum redemption gate, according to the client letter.
“In global ABS markets there is considerable value following the downward repricing during the second half of 2011 driven by portfolio liquidations, investor concerns regarding European bank liquidations and diminished dealer liquidity. We have an ABS team with a successful track record and I am confident in their ability to continue to identify value and deliver returns,” wrote Michael Hintze, CQS CEO and senior investment officer, in the firm's January market insights client report, which was obtained by P&I Daily.