UK - Axa Investment Management has launched an arbitrage hedge fund which aims to exploit the volatility levels of debt and equity in companies.
The fund manager says its Axa Kappa fund is different from other arbitrage hedge funds because it does not take any market view on the various elements on a company’s balance sheet. Instead, the fund will look at just credit and equity.
Axa IM claims the fund can exploit the fact both asset classes give different measures of the same underlying volatility.
A three-strong portfolio management team, headed by Axa IM head of securitisation and structured credit Pierre-Emmanuel Juillard, will run the fund.
The other two fund managers are credit derivatives and financial models specialist Guillaume Boulanger and volatility specialist Arthur Lepage.
They will be supported by 27 credit analysts and derivative specialists.
Juillard said: “We believe that both the recent phenomenal growth of the derivative and structured credit markets and our early commitment to this area, has enabled us to efficiently exploit an arbitrage opportunity we spotted early on.
“Our strong position and expertise in the credit and derivative markets provides us with the optimal structure to deliver a truly innovative and unique approach to this volatility arbitrage space.”
Kerrin Rosenberg says while the rise of CDI is positive, understanding the risk and return aspect is a great challenge
Schneider Electric has appointed Aon to provide full fiduciary management services for over £400m of assets held in the Schneider Pension Plan.
Pension Insurance Corporation (PIC) has invested £40m in debt issued by Scottish Borders-based Eildon Housing Association.