Resolution Asset Management’s joint venture, Argonaut Capital Partners, is planning to launch a European absolute return fund for Barry Norris targeting an annual return of 8-10%.  

The Argonaut European Absolute Alpha Return (AEAAR) fund will launch on 1 September subject to regulatory approval and will be domiciled in the UK.

Norris, who has been running a dummy portfolio on the fund for several years, decided to move the fund on to the next stage by launching a paper portfolio three months ago.

The 5% return on the fund over the last three months has helped convince the group it has a strong proposition for the retail market.

AEAAR will typically hold between 20 to 30% in cash in a bid to smooth out volatility. It will hedge Euro denominated stocks back into sterling to reduce currency risk.

The fund will hold a total of 70 positions, 40 of which will be long and 30 short, which includes 20 pair trades.  

It will have gross market exposure of 70% and net exposure of 10%. All positions will have equal weightings of 1%.

Resolution is understood to be seeding the fund with around £50 million.