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Areca Investment Management announced the launch of Areca Value Discovery Fund, a specialized fund of hedge funds dedicated to capture deep value investment opportunities in the fixed income and credit area.

Fund description The Areca Value Discovery fund will blend fundamental credit deep value strategies together with fixed income trading strategies. The core part of about 70 – 80% of the portfolio will be invested in low volatility and specialized hedge funds strategies with asymmetric return profile, in particular into Distressed Corporate Credit, Distressed Structured Credit, Capital Structure Arbitrage and Direct Lending. The satellite part, about 20 – 30% of the portfolio, aims to take advantage of the favorable trading environment in interest rates, currencies and other asset classes by investing in Global Macro strategies. Attractive uncorrelated returns will be achieved through the combination of high cash flow income and capital appreciation. The fund’s target is an annualized return of 12% - 16% p.a. with a volatility of 5% p.a. over a three to five years investment horizon.

Investment rationale The credit crisis has created outstanding investment opportunities to achieve superior returns while investing in the top of the capital structure, especially in Distressed Credit, Leveraged Loans, Capital Structure Arbitrage, Direct Lending and Global Macro Fixed Income strategies.

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