TwentyFour Asset Management is looking to raise up to £150 million to set up a new closed-ended fixed income fund.
The TwentyFour Select Monthly Income fund will target a total return of 8-10% per annum and is backed by broker firm Numis Securities.
The fund, which will be run by Gary Kirk, Eoin Walsh and Felipe Villarroel, will invest in niche markets such as European leveraged loans and mezzanine asset backed securities.
The trust is expected to use hedging instruments to manage duration, which is expected to be around two years initially.
Commenting on the move, John Magrath, head of distribution at TwentyFour, said: "It will buy less liquid bonds and offer a regular healthy income stream paid on a monthly basis. It will have more interest rate risk than the TwentyFour Income fund, as 95% of it will be in fixed rate bonds, so the team will manage the duration and keep it low."