Hedge fund Centaurus returns to event-driven-sources

Fri Jul 17, 2009 4:52pm BST

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* Centaurus partners put $15 million in to start fund

* Fund has reached $50-$100 mln -industry source

* Move follows closure of $1.2 bln Alpha fund

By Joel Dimmock and Laurence Fletcher

LONDON, July 17 (Reuters) - Hedge fund group Centaurus Capital has made a return to event-driven investments with a new fund backed by the firm's partners, two people close to the fund said on Friday.

Centaurus managers invested $15 million in the new fund in March and assets have since grown to several times that figure after attracting outside investors, one source told Reuters.

The fund's assets have grown to $50 million to $100 million, a separate hedge fund industry source with knowledge of the matter said.

The fund, as yet unnamed, represents a new move into the event-driven sector after a chastening 2008, when performance of the flagship $1.2 billion Alpha fund tailed off. The portfolio was wound down after investors rejected a plan to return cash and refocus on more lucrative areas such as distressed credit.

Centaurus, founded by Chairman and Chief Executive Bernard Oppetit, has become known as a high-profile activist investor, including a campaign at French IT services firm Atos Origin (ATOS.PA). That activity has subsided, and the firm has been concentrating on efforts to pick M&A plays and track down clients for the new fund.

"It's been picking up good traction in assets, performance has been strong ... spreads have been extremely attractive," said the first source, without providing details.

The source said clients had returned to the event driven sector after finding themselves overexposed to macro funds or commodity trading advisors (CTAs) and faced with a large amount of long-short funds.

Many investors had built up exposure to global macro funds -- which bet on movements in bonds, currencies, equities and other assets -- and managed futures, or CTAs -- that follow trends in futures markets -- after they outperformed most other strategies last year.

Centaurus decided to move back into event-driven after watching other players drop the sector like a stone as the financial crisis rumbled on.

The first source close to the fund said investment banks have withdrawn, while large multi-strategy funds who were dabbling in risk arbitrage had abandoned Europe and Asia and retrenched to home markets in the United States. (Editing by Andrew Macdonald) (For the Hedge Hub blog: blogs.reuters.com/hedgehub) (For Global Investing: here)