Fund manager Henderson Group is set to launch its first European ABS opportunity fund to take advantage of prices in the sector. The new fund will be managed by Jim Irvine, who is head of structured products at the firm.
The fund aims to raise 250 million ($349 million) with a first close slated for July 1. The fund has a five-year life and is aiming to capture the recovery of highly-rated ABS tranches. It will target returns of between 4% and 5% a year above Euribor, the rate at which deposits in the eurozone are offered by one bank to another.
"There are swathes of ABS trading at discounts due to general market illiquidity as opposed to being fundamentally impaired or distressed," Irvine said in a statement.
According to market reports, 75% of the portfolio will be invested in RMBS or CMBS. At least 75% will be in triple-A rated securities, while the balance will be invested in double-A and single-A securities, a spokesman said.
Henderson said it will also consider the launch of a European special situations fund to be managed by Richard Pease, who is the manager currently in charge of the £476 million ($763 million) New Star European Growth Fund.