PFPC has won the mandate to service the new KBC fund – a Convertible Opportunities Fund, open to investors from 1st February 2002. The fund builds on the success of the KBC Convertible Arbitrage Fund launched last year, which earned the Eurohedge “New Fund of the Year (Arbitrage Strategies)” 2001 Award. The Arbitrage Fund was launched in July 2001 and by year end had attracted around $500 million in assets under management.
Andy Preston, Chief Investment Officer at KBC AIM, comments:
“Such was the growth of the Convertible Arbitrage Fund that we had to close the fund to new investors. This is an unusual step to take after just six months, but there was such demand for our first fund and we wanted to maintain the integrity of the investment strategy. As a result, we are now launching a new fund to meet with the strong demand for our expertise in convertible securities.”
KBC AIM is part of the KBC group of companies. KBC Bank and Insurance Holding Company’s balance sheet exceeds Euro 200 billion. Hedge Fund KBC AIM, is able to draw on the strengths of its parent group.
Mr. Preston explains:
“The reasons for our success are threefold. First, like most hedge funds we are a small lean unit, but behind us is a strong institutional infrastructure and investors are buying into that pedigree. Second, we offer a high level of transparency, which is not yet commonplace in the hedge fund industry. Finally, our fund outperformed other funds in both absolute and relative terms, and reached a level of assets that usually take funds years to attract.”
The new fund will have a broader investment mandate to meet demand for greater convertible opportunities, and will be scalable to allow for growth. The investment objective is for high absolute returns, low volatility of returns and low correlation to major equity indices. The investment strategy complements the KBC Convertible Arbitrage Fund by pursuing a broader variety of convertible arbitrage opportunities, such as mispricings in distressed convertibles, mandatory convertibles and balanced convertibles with more selective credit protection. The initial goal is to attract $200 million in assets under management and to grow from there.