Kames Capital is launching another absolute return bond fund, as the company is 'mindful' of capacity constraints with the existing Kames Absolute Return Bond fund.
The Kames Absolute Return Global Bond fund is expected to launch in the second quarter of this year, subject to regulatory approval, targeting a return of three-month Libor plus 2.5% per annum after fees.
Registered in Dublin with sterling as the base currency, the fund will be managed by John McNeill, Sandra Holdsworth and Nick Chatters.
Meanwhile, Citywire AA-rated Stephen Snowden (pictured) and Colin Finlayson manage the existing £1.2 billion fund Absolute Return Bond fund - which will no longer be actively marketed in order to control inflows.
Kames head of fixed income David Roberts said: '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.'
The new Global Absolute Return fund will have a similar mandate but follow a slightly different investment strategy that will ultimately allow for larger capacity.
Over the past three years, Snowden and Finlayson have returned 6% with the existing Absolute Return Bond fund compared to 12.9% by the average manager in the absolute return sector.