London-based fund managers Tiburon Partners are preparing for the launch of a Ucits-compliant fund focusing on renewable energy.

The Terra Fund is set to be launched in October. It aims to invest across the energy sector focusing on natural resources and alternative energy sources.

Fund manager Steven Miller said the fund's strategy would be primarily long/short equity, looking at investments across the globe.

Miller said Tiburon was seeing a "lot of valuation anomalies" in conventional energy stocks and thought alternative energy was more competitive. The sector was growing across the world thanks to a continued emphasis on environmental concerns.

Tiburon had chosen a Ucits-compliant vehicle due to continued doubt over future regulation for the hedge funds industry.

"There seems to be a lot of uncertainty with where Cayman and other offshore vehicles stand with regard to Europe. At least with Ucits you can see clearly where you stand," Miller said.

The Terra fund will launch with $10 million of capital. Miller said he thought capacity could reach $1 billion.

The fund will be listed on the Irish stock exchange with US dollar, euro and sterling share classes.

The minimum investment will be $15,000 or £10,000 and redemption will be daily.

The fund's prime broker is Crédit Suisse, with Northern Trust as administrator and custodian. PricewaterhouseCoopers will be the fund's auditor and Dillon Eustace its solicitors.

Miller said the fund will charge a 1.5% management fee with a 20% performance fee.

The fund intends to target pension funds, endowments, funds of funds, family offices and high net worth individual investors.

Miller will co-manage the fund alongside John Payne.