New York (HedgeCo.net) – California-based alternative investment firm, Coast Asset Management, it is divesting itself of its fund of hedge funds business in order to focus on fixed income arbitrage investment strategy.

“We are pleased with the way our fixed income arbitrage strategy has performed during the challenging market conditions of the past several years and recent industry recognition we’ve received suggests that the industry has taken note,” said Dave Smith, Coast’s founder and CEO. “Coast has always sought to manage risk and minimize volatility while achieving competitive returns,’’ Smith said. “We look forward to implementing our investment ideas through our fixed income strategy and we believe that current and future market conditions will continue to present attractive investment opportunities for this strategy.”

The firm has obtained the consent of its investors to sell its fund of hedge funds business to another asset management firm. Coast anticipates that the transaction will close within the next few weeks. The transaction terms will not be disclosed.

“The Coast fixed income strategy maintains a concentration in highly liquid US Treasuries and seeks to outperform other fixed income strategies in a variety of market conditions.” The firm said in a press release, ” The Coast fixed income strategy employs a pure relative value approach and market neutrality. It is intended to be uncorrelated to major market factors and generate a return stream that is defensive in nature.  Coast maintains a positive outlook on the opportunity set in fixed income arbitrage due to volatility that Coast believes will result from economic uncertainty domestically and abroad.”

Alex Akesson
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