Allianz Global Investors is set to enter the UK absolute return space in the first quarter of this year with UK equity and multi-asset products.
The group, which is the third largest global active asset manager, intends to leverage experience gained in running institutional 130/30 and multi-asset products and plans to have the vehicles ready for a March launch.
Nick Smith, managing director and head of fund distribution, expects the funds to be UK domiciled.
"Allianz believes that as a business we should be able to offer absolute return funds to the UK," he says.
"The funds are likely to be quiet different from each other, with the multi-asset aiming for a consistent return over time - while the UK fund will target similar returns, but as an equity-only strategy."
"It is likely the funds will be managed in the UK, with some input from our other international offices."
UK investor appetite for absolute return products was high last year, with Philip Gibbs' Jupiter Absolute Return fund becoming the most successful launch of 2009, taking in more than £244m in its fund raising period.
Meanwhile, Cazenove had to close its UK Absolute Dynamic fund to new investors just one week after launch after raising £123m.
Smith has also earmarked further funds focused on the BRIC regions. The firm is keen to develop products around its £699m Allianz RCM BRIC Stars fund, which is managed by Michael Konstantinov. The fund has returned 59.9% since launch in 2006 against a sector average of 35.1% to 30 November 2009 according to Lipper.
