Hermes BPK is launching the Hermes BPK Trading Fund which aims to allow investors to exploit the positive attributes of CTAs alongside other selected trading-oriented strategies which when combined offer the potential for uncorrelated returns and steady capital appreciation in most market conditions.

Because non-correlated returns are available in strategies other than just CTAs, by blending systematic and discretionary trading-oriented managers together, Hermes BPK believes it is possible to create an investment portfolio that generates consistent alpha in most market environments while providing attractive, non correlated returns in dislocating markets. The fund’s trading focus should appeal to investors who have existing hedge fund allocations, as well as those who wish to hedge more traditional long-only portfolios.

The fund, seeded with $100m of capital from a selection of institutional investors, will have an innovative fee share option of no management fees and a 15% performance fee, a reflection of BPK’s confidence in this offering and commitment to enhancing alignment between institutional investors and fund managers. It will aim to generate absolute returns in excess of 10%, and will have monthly and 45 day liquidity.

Mark Barker, Co-CIO and founding partner of Hermes BPK, said of the new fund: ‘With the current market outlook remaining uncertain, it is our belief that strategies with a trading focus are a powerful complement for those who express their long term buy and hold approach through traditional equity and fixed income allocations. As such, we believe that the Hermes BPK Trading Fund should deliver attractive, non-correlated returns (while at the same time reducing portfolio risk) both for investors who have existing hedge fund allocations as well as those who wish to hedge traditional long-only portfolios”.