SEB fund arm plans credit hedge fund
* Swedish bank unit sees "polarisation" of fund demand
* Will use leverage for new hedge fund strategy
* Beefs up private equity team to reopen listed fund
MONACO, June 23 (Reuters) - The fund management arm of Swedish banking group SEB (SEBa.ST) is planning to launch a global credit hedge fund in the autumn to take advantage of mis-pricing opportunities in the credit markets.
Peter Branner, global head of investment management at SEB, said the fund would use leverage and take long and short positions in the investment grade and high yield credit markets where the turbulence of the financial crisis has thrown up undervalued and overvalued assets.
SEB will target institutional and private banking clients for the fund, he told Reuters at the Fund Forum industry conference.
Branner said SEB still saw demand for hedge fund-style products, despite the negative publicity around the sector and a broader backlash against disappointing absolute return funds.
"There is some polarisation of demand," he said.
"Investors are buying low-risk money market funds on the one hand and hedge fund style products on the other. This year we are seeing a lot of interest in fixed income."
SEB has also doubled the number of investment professionals in its private equity team to four with the aim of reopening its listed private equity fund in August, he said.
Branner said that this would invest in both infrastructure deals and secondaries, where managers buy up other investors' obligations in private equity vehicles.
"Forced sellers are a good starting point," he said.
The market for secondary private equity assets has mushroomed as the credit crisis intensified, with new investors attracted by often steep discounts as owners seek to raise capital. [ID:nLL207860] (Editing by Hans Peters)
