The Kames Absolute Return Global Bond Fund (KARB Global) is intended to pick up from the capacity constraints inhibiting the firm’s existing absolute return bond vehicle, the Absolute Return Bond fund (KARB).
Its release has been brought forward as a result, with it due to launch in Q2 2015 following regulatory approval.
The Dublin-domiciled KARB Global will be run by fixed income managers John McNeill, Sandra Holdsworth, Nick Chatters and Paul Dilworth, using fixed income instruments and derivatives to target returns uncorrelated to the underlying market.
The fund will seek a performance return of three month LIBOR plus 2.5% pa (after fees), similar to the KARB’s three month LIBOR plus 2-3%. It will be available with sterling as the base currency.
Kames said it is discouraging investment in the KARB fund with immediate effect, citing concerns over its liquidity and performance which stem from limitations on the credit and carry modules it employs. Instead, clients will be directed towards KARB Global.
Kames’ head of fixed income, David Roberts, added: “Although optimum fund size is difficult to identify definitively, at Kames we believe that if the fund significantly exceeds £2 billion, its performance and liquidity could start to be affected. Accordingly, given the current size of the fund and our potential sales commitments, we have decided to cease actively marketing the fund.”
