Alternative investment firm Coast Asset Management is selling its fund of hedge funds business and focusing its efforts on funds that employ its fixed income arbitrage investment strategy.
Coast anticipates that the sale to another asset management firm will close within the next few weeks. The transaction terms will not be disclosed.
"We are pleased with the way our fixed income arbitrage strategy has performed during the challenging market conditions of the past several years and recent industry recognition we’ve received suggests that the industry has taken note," says Dave Smith, Coast’s founder and CEO. "Coast has always sought to manage risk and minimise volatility while achieving competitive returns. We look forward to implementing our investment ideas through our fixed income strategy and we believe that current and future market conditions will continue to present attractive investment opportunities for this strategy."
The coast fixed income strategy maintains a concentration in highly liquid US Treasuries and seeks to outperform other fixed income strategies in a variety of market conditions. The Coast fixed income strategy employs a pure relative value approach and market neutrality. It is intended to be uncorrelated to major market factors and generate a return stream that is defensive in nature. Coast maintains a positive outlook on the opportunity set in fixed income arbitrage due to volatility that Coast believes will result from economic uncertainty domestically and abroad.
Established in December 1990 and operating since the beginning of 1991, Coast was formed by Smith, who continues to lead the firm as president and CEO. Coast is majority owned by its management and, since inception, has consistently focused on achieving superior risk-adjusted returns while carefully managing downside volatility.