Absolute Return Partners LLP launched its fifth fund, the ARP Private Finance Fund, on 1 September 2008.
Absolute Return Partners LLP launched its fifth fund, the ARP Private Finance Fund, on 1 September 2008. The fund is designed to take advantage of the cyclical and secular opportunity in the Asset Based Lending (ABL) market.
Due to the current credit crisis and Basel II regulations, banks and other traditional lenders have retracted from the loan market. As a result, hedge funds are increasingly taking market share from these institutions whilst at the same time obtaining better security against loans made as well as higher yields. With only USD 12 billion out of a USD 400 billion market financed by hedge funds, there are plenty of opportunities for hedge funds to grow in this space
The ARP Private Finance Fund is a multi-manager fund which will invest in ABL funds across a wide industry spectrum.
Niels Jensen, Senior Partner at Absolute Return Partners, says, “We are excited to launch an ABL fund at this point in time as we believe ABL funds will offer exceptionally attractive opportunities over the next couple of years.
ABL lending has been an integrated part of Absolute Return Partner’s investment strategy since 2005 and we think the time is right to establish a stand-alone vehicle.”
He adds, “Historically, economic down-turns have not had a meaningful impact on the returns as the managers will ensure a conservative loan-to-value against an asset with a defined market value.
“Furthermore, in this environment, investors are keen to own assets which historically have had very low correlation to equity markets.”
ARP plans to launch a leveraged version of the product on 1 October.
