Merrion Stockbrokers will introduce a sizeable hedge fund over the next few months with the help of four investment specialists who recently resigned from rival broker NCB.

The four former NCB employees, who left the broker in February, will begin working with Merrion today. Their job will be to establish a hedge fund for the firm, which does not currently offer such a structure to its clients.

It is expected the new hedge fund will be launched within six months. As is normal with such funds, it is likely to be open only to high-net-worth investors. This will mean that the average contribution will be around the €200,000 mark, with the minimum investment likely to be at least €100,000.

Two of the four new Merrion employees - Mr David Conlon and Mr Paul Deeney - were behind the launch of a hedge fund with their former employer.

The popularity of hedge funds has grown over the past few years in the Republic as increasing numbers of wealthy of Irish people are unsatisfied by the returns available on deposit-based investments or stock market performance.

The underlying aim of the structures is to achieve above-average investment returns in all kinds of market conditions.

They typically use more aggressive investment strategies than traditional funds, such as short selling or arbitrage. They do not, for example, track prescribed industry benchmarks and are designed to protect investors from volatile markets by making more speculative investments.