its Jacobson Global Hedge Fund in February and Optima Fund Management will begin trading in May with The Scott's Cove Fund.

Bermuda is a popular location for registering hedge funds as its legislation allows the flexibility these types of funds need. Both new funds are aimed at either high net worth individual investors or institutional investors.

Jacobson's fund is a low-volatility market neutral fund which allocates 80 percent of assets to equity indexes and 20 percent to forex trades. Equity indexes are tapped through futures contracts and include such major benchmarks as the FTSE 100, CAC 40, DAX, SMI and the S&P 500. Including currencies in the mix is intended to hem in volatility on the portfolio level.

This new hedge fund strategy is intended to attract pension funds, endowments, funds of funds and other institutional investors. Minimum investment level is $1 million and separately managed accounts start at around $5 million to $10 million.

It is exchange listed in Dublin and already has around $17 million under management. It does not use leverage and aims for annual returns of about 20 percent with volatility of about 8.5 percent.

Optima is aiming its new fund, due to begin trading May 10, at private and institutional investors. Its focus is US distressed securities and investments will be made without leverage and on the basis of fundamental proprietary analysis.

Investment targets will include securities issued by companies which are highly leveraged or misunderstood, bankrupt, undergoing reorganisation or recently capitalised. Key investment parameters include risk reduction achieved by analysis of risk/reward ratios of individual securities, a continuous assessment of the portfolio and a specific emphasis on evaluating the management of target companies.