Legg Mason's Permal Hedge Strategies Fund invests in 20-40 hedge funds

By Toni Weeks

San Diego, Feb. 1 - Legg Mason Global Asset Management launched the Permal Hedge Strategies Fund, a fixed-income and focused multi-manager, multi-strategy fund that will invest in 20 to 40 underlying hedge funds, according to a press release.

The fund invests in a broad range of fixed-income strategies while employing flexible asset allocation and moving capital between credit and noncredit strategies, according to the release. Investments include developed and emerging market fixed income and long/short fixed income. Small allocations to event-driven strategies, such as risk arbitrage, distressed debt, special situations, activists and both systematic and global macro strategies are included.

"With corporate activity likely to increase throughout 2012, we believe that this is a good area to be in," Javier Dyer, portfolio manager of the fund and Permal Group's deputy chief investment officer, said in the release.

"We expect to see corporate restructurings, both inside and outside of bankruptcy, and distressed credit opportunities. Currently, there are late-stage bankruptcy situations that are offering attractive IRRs for what are effectively liquidations situations. Elsewhere, with many loan and bond refinancing still due for renewal in 2013 and 2014, we again expect multiple long, short and distressed opportunities, with capital markets asserting greater discipline in differentiating between the good and bad credits," Dyer added in the release.

"Outside of corporate credit, we like non-agency RMBS, with many securities offering significantly higher cash yields than corporate bonds."

The fund, available to U.S. accredited investors, has a minimum investment of $25,000. Liquidity is quarterly.

The fund is managed by Baltimore-based Legg Mason Partners and subadvised by Permal Asset Management Inc.

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