UK – Two major investment groups active in the hedge marketplace, GAM and Man Investments have launched multi-strategy vehicles.
GAM has introduced a new global multi-strategy funds of hedge funds, with a concentrated portfolio, similar to its earlier stable companions. GAM Diversity III will invest in new managers as well as those already held in GAM Diversity and Diversity II.
The fund, domiciled in the British Virgin Islands, will have euro, US dollar and sterling denominated share classes listed on the London Stock Exchange. This will make it attractive to European investors requiring listed vehicles, says GAM.
The focus is on absolute returns with low volatility and low correlation to equity and bond markets, using the same investment approach as its predecessors. The minimum investment is 5,000 euros, with weekly subscriptions and monthly redemptions. The purchase fee is 5% and the annual management fee is 1.7625%.
The new vehicle will be managed by David Smith, chief investment officer of the group’s multi-manager team. Of the11 billion US dollars that GAM manages in hedge funds, 5.7 billion US dollars is in multi-strategy funds.
The Man Multi-Strategy Series 6 is a capital guaranteed structure, which targets medium-term annualised growth of around 15 to 17%, with volatility restricted to the10 to 12% range. It is available in both euro and US dollar denominations.
The guarantee element provides investors at least 120% of the face value of the initial investment at maturity, which is the end of August 2016, says Man. “Provisions have been made to include a profit lock-in feature, which subject to trading performance, has the potential to elevate the level of guarantees at maturity by locking in a portion of net new trading profits following periods of sustained profitability,” the group adds. Both guarantees are provided by ABN AMRO Bank.
The offer period for the product is up to 5 December. The investment is in the form of redeemable structured guaranteed bonds. The minimum investment is 50,000 US dollars or euros. The minimum redemption is 20,000. There are redemption fees on a declining scale, from 4% of net asset value from issue date to end 2005, reducing to 1% in the year to end 2009, but with no redemption fees thereafter. There are no sales charges and dealing frequency is one month.
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