F&C to launch Thames River European AR fund

F&C is preparing to launch a European absolute return fund for latest hire Randeep Grewal.

The Thames River European Absolute Return fund will be structured as a Ucits III OEIC, domiciled in Dublin, targeting a return of 10% net of fees over a three- to five-year cycle.

It comes to market on 1 March, seeded with £15m-£20m by a "cornerstone investor".

Reporting to head of F&C's European equities Paras Anand, Grewal will use the long-only team's research capabilities to generate stock ideas.

The manager will invest according to 10 themes, with between three and five stocks in each.

Possible themes include agriculture, such as dairy farmers and crop producers, and logistics and transport, including oil tankers and containers.

One holding at launch may be C&C Group, an Irish drinks manufacturer which sells heavily into the UK. "This stocks fits in with our agriculture and food theme," Grewal adds.

The fund will be run as a pan-European multi-cap mandate, although Grewal expects his main focus to be on mid and large caps in developed Europe.

"We have chosen the widest remit we could have," he says "There is a limit on the exposure we can have to Russia, but we can go anywhere is Europe. However, there are more opportunities in liquid large caps in the developed markets."

Grewal joined F&C in October last year from alternatives house Tudor Capital, where he ran European equity long/short mandates. He will run the fund with David Moss as deputy manager.

AMC on the fund is 1.75%, with a performance fee 12.5% above a hurdle rate of three-month EURIBOR + 2%.