SVG Investment Managers, a London-listed company closely associated with buyout firm Permira, has launched an absolute return fund. It is the latest in a series of developments blurring the line between private equity and hedge funds.

The company said its new fund, SVG European absolute return, would apply private equity techniques to take long- and short-positions in European public equity markets. The fund will aim to generate a return of more than 15% a year, with low volatility, investing in about 40 stocks targeting companies with a market capitalisation of between €100m ($130m) and €500m.