Randall Dillard, a former head of merchant banking at Nomura, the Japanese bank, has launched a fund of hedge funds with an aggressive target of 15% to 20% net returns.

Liongate Capital Management, Dillard's firm, has set its performance target significantly higher than that of most fund of hedge funds, which typically aim at 8% to 12% net returns. Dillard said he was going to take more risk: "Most funds of hedge funds sit at 2% to 3% volatility. We want to bump up to volatility of 8% to 10% and that should show on the return side."