Ex-Insight managers launch multi-asset firm

* Funds will target returns above inflation

* Will hold wide range of assets

* Says hedge funds illiquid, opaque, expensive

By Laurence Fletcher

MONACO, June 16 (Reuters) - Former Insight Investment fund managers Patrick Armstrong and Ana Cukic-Armstrong have launched a new fund management business that will invest in a broad range of assets and seek to beat inflation.

The firm, Armstrong Investment Managers, will try to combine hedge fund-style flexibility with the liquidity and lower fees of traditional asset management. It will launch funds for retail, high net worth and pension fund investors at the end of the summer, Patrick Armstrong told Reuters on Tuesday.

The pair were co-heads of the multi-asset group at Insight Investment, now owned by Lloyds Banking Group (LLOY.L). They ran around 1.2 billion pounds ($1.97 billion) in assets including the Diversified Target Return fund, which over the past three years fell 2 percent, beating an average 11 percent fall among peer funds.

"We think there is a middle ground between traditional funds and hedge funds," Armstrong said. "Hedge funds have been opaque, illiquid and had very high charges."

He declined to give details on the funds that the firm will launch, but said they would aim to beat inflation. At Insight Armstrong invested in asset classes such as hedge funds, property funds and commodities.

He added that the managers are currently keen on corporate bonds and have a large allocation in this sector.

"It's a very flexible mandate, there's always something working somewhere," said Armstrong, who has been on gardening leave after leaving Insight in October. "We won't have any excuses.

Toby Hayes, who worked in the multi-asset team at Insight, and Vlade Milanovic, who previously worked as a quantitative analyst at New Bond Street Asset Management, have also joined the firm. (Editing by Rupert Winchester)

($1=.6080 Pound)