Threadneedle is planning to launch a UK Absolute Alpha Fund in fourth quarter of 2010.
Threadneedle said that in line with the new fund launch, it will close the existing Cayman-domiciled UK Crescendo Fund in October this year.
The new fund, which will be structured as Undertakings For The Collective Investment Of Transferable Securities (UCITS) III, will use a similar investment process to the £16m UK Crescendo hedge fund, which will see its assets merged into the new fund.
Threadneedle said that the new fund is being launched in anticipation of significant reform and in response to clients demand for a UK absolute alpha product.
Threadneedle UK Wholesale head Gary Collins said that the introduction of UCITS III regulation has triggered strong growth in the regulated absolute return sector and the migration of hedge fund strategies to the transparent, liquid and highly regulated UCITS market looks likely to continue to drive investor interest.