NEW YORK (Bloomberg) — David Linsley's Sirius Investment Fund has raised $70 million since it started in February and seeks to outperform other hedge funds by investing with smaller managers.The so-called fund of funds aims to raise as much as $300 million and generate annual returns of more than 20 percent, Gibraltar-based Sirius Investment Management Ltd., which manages the fund, said. The fund has gained about 2.5 percent since it started, said Hugh Barker, a spokesman for Sirius.

Sirius aims to profit as hedge funds become "increasingly institutionaliSed and increasingly risk adverse," it said.

Hedge funds world-wide attracted a record $126.5 billion in new money last year, even as their average return of 13 percent trailed equity markets.