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Baring increases hedge fund investment

UK-based Baring Asset Management has announced that it will increase the amount it invests in hedge funds in order to capitalize on rising market volatility.

The global investment management firm will increase the percentage of assets invested in hedge funds from 20 per cent to 25 per cent - across the entire range of targeted risk multi-manager funds.

The move marks a growing feeling among asset managers that, in the current climate, hedge funds are likely to provide the best deal for investors.

David Coombs, director of multi-manager investments at Baring Asset Management, said: "A 25 per cent allocation to hedge funds is not what many investors will expect to see in a typical multi-manager portfolio but we are confident in our decision to increase the weighing."

"The current environment is improving for hedge fund managers and the Baring multi-manager funds are well placed to capitalize on this," Mr Coombs added.

Baring's multi-manager portfolios currently have more than £300 million under management, returning an average of 20 per cent for investors since their launch in late 2004.