GHK Asset Management is making its debut in the hedge fund market with the GHK First Equity fund at a time when many industry participants believe returns could start falling.

The long/short equity fund, which will be capped at £200m (€310m), will invest in US and UK equities and is targeting 15% per annum. Long/short equity funds lost a net $407m (€432m) of assets compared with a net inflow of $1.9bn in the last quarter of 2001. Long/short investing involves buying and holding stocks the manager lilkes and selling, without owning, stocks that are overvalued.