HEDGE fund Man Group yesterday rolled out a new venture with investment bank Nomura to capitalise on the ripe fixed income futures market.
The two firms, who have previously worked together, have opened a fixed income futures fund to swoop on a market largely made vacant by banks darting from the environment due to a rash of regulatory pressures.
The fund, which has been seeded with an initial £50m to get it running, has been in the works since January 2010 and quietly trading for a few weeks but was formally launched yesterday.
The Nomura Man Systematic Fixed Income Fund, as it is known, will have no external leverage and will be comprised of very liquid fixed income products, such as interest rate futures and other fixed income futures – a market previously occupied by investment banks.
A rapid exit from interest rate trading by them since 2008 has left the market ripe for fresh entrants, Man Group said.
Sandy Rattray, chief investment officer of Man Systematic Strategies, a division of Man running the fund, said: “The world’s bond markets are roughly twice the size of the world’s equity markets yet much less money is managed by fixed income than by equity alternative investment managers.
“In an environment where market participant risk-taking in interest rates has been considerably reduced since 2008, this creates attractive alpha opportunities.”
Man will be tasked with running the fund, with former AHL head of fixed income Andre Rzym appointed as fund manager. Nomura will be responsible for distributing the fund.
A UCITS version of the fund is also believed to be under consideration.