Aegon Asset Management has launched UK Equity Absolute Return Fund to capitalise on the group's equity investment process from its UK equity team.

The fund seeks to invest in long and short positions in UK listed equities, with a focus on reducing volatility and preserving capital. However, the fund intends to provide investors with positive absolute returns regardless of the direction of UK stocks.

Managed by David Griffiths and David Pringle from AEGON Asset Management’s UK equity team, the fund will consist of three portfolios, long equity, short equity and cash. The size of the long and short portfolios will vary according to the manager’s discretion but will typically not exceed a 10% net long or short position. Mr Griffiths and Mr Pringle will be supported by the 12-strong UK equity team headed by Stephen Adams.

The fund is structured to be uncorrelated with the equity market and aims to generate out-performance of its benchmark through diverse and uncorrelated strategies. Although it will not have an overriding theme, it is expected to benefit from macro economic and other themes identified by the UK team working closely with AEGON Asset Management’s head of strategy and chief investment officer.

Steve Kenny, head of retail sales for Europe at Aegon Asset Management, said: “This is an exciting addition to our current UK equity fund portfolio, which will be able to maximise the stock-picking process our UK team has been deploying so successfully over the last few years for its various funds.

“Mr Griffiths and Mr Pringle are very experienced UK equity investment managers and analysts, and they will be ably supported by Stephen and the wider UK team.”