Palmer Square Hedged Convertible Income Fund to launch in March

By Toni Weeks

San Diego, Jan. 3 - Investment Managers Series Trust announced plans for a new fund that will launch in March, according to an N-1A filing with the Securities and Exchange Commission.

The Palmer Square Hedged Convertible Income Fund will seek absolute returns that exceed prevailing short-term rates by investing in convertible securities and establishing short positions in the common stock of the issuers of those convertibles. By combining long positions in convertible securities with short positions in common stock of the same issuers, the fund will aim for a "hedged convertible" investment portfolio with returns that are expected to be less volatile and have less correlation with the broader capital markets, prevailing short-term interest rates and capital markets indexes.

The fund will generally invest in convertible securities that are part of an issuance of at least $40 million. The portfolio managers expect to focus investments in high-growth industries such as technology, energy, health care, financials and global industrials and may invest more than 25% of total assets in one of these industries.

The fund will target convertible securities that are undervalued, with the selling of a convertible security and the closing of its related short position in common stock occurring when the convertible security ceases to be undervalued or exhibits an unfavorable change in structure or value.

Class A shares will carry a maximum sales charge of 5.75% and a maximum deferred sales charge of 1%. Class I shares will have neither of these charges.

Management fees will be 1.3% for both classes. Though total annual fund operating expenses have not yet been detailed, the fund's adviser has agreed to limit expenses, excluding shareholder servicing fees, acquired fund fees, interest, taxes, dividends, commissions and extraordinary expenses to 1.74% for class A shares and 1.49% for class I shares.

Christopher D. Long and Angie K. Long of Leawood, Kan.-based Palmer Square Capital Management LLC, the fund's investment adviser, will serve as portfolio managers.

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