French boutique launches convertibles absolute return fund

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French asset manager Karakoram has launched the K2 fund, which consists a total return diversified strategy, mostly invested in convertible bonds and equities.

The two drivers of the fund will be the short transactions made on equity markets and the selection of convertibles operated by the fund management team.

The K2 fund seeks to annually outperform the Eonia + 5% over a three-year investment horizon with a volatility of around 3%. The equity exposure of the fund is comprised between -30% and +30%.

In order to bolster its expertise in the field of convertible bonds, Karakoram has hired Jean-Philippe Cridlig, who joined from Crédit Agricole – Corporate Investment Banking where he was managing director responsible for the trading of convertible bonds.

Commenting the launch of the fund, Jérôme Fourtanier, chairman of Karakoram and co-portfolio manager of the K2 fund, said : “The K2 fund meets investors’ current expectations in the persistent low yield environment. The fund was built in a similar way to the Annapurna fund (absolute return) but differentiates itself by a slightly higher volatility resulting from a different calibration.”

Karakoram was established in 2011.