UK – HSBC Republic Investments Ltd (HRIL), part of the international private banking division of UK financial and banking services group, HSBC, has launched a new open-ended fund of hedge funds that is targeted at institutional investors and pension funds.

The fund is a sub-fund within the Guernsey-domiciled HSC Republic Alternative Portfolio and its investment objective is to achieve absolute returns from selective investments in hedge funds worldwide.

The minimum entry level is set at US$2.5m (€2.9m) with an institutional level management fee of 1%.

The fund will be managed mainly form London, but will also draw on the knowledge of HRIL’s teams in New York and Geneva.

HRIL says that investing through a fund of hedge funds allows institutions to place their assets in diversified portfolios, thus reducing risk and avoiding the high minimum investment levels that many hedge funds impose. It expects this approach to appeal in particular to pension funds and institutionals that are looking at this point to “test the water”.

Says Paul Dunning, chief executive of HRIL: “There is an increasing awareness amongst institutions and pension funds of the opportunities provided by alternative investments, such as hedge funds, to produce positive investment returns regardless of market direction”.

HRIL is part of HSBC Republic, the international private banking arm of HSBC. HSBC Republic provides trustee services as well as banking to high net individuals and their families and has over US$145bn (€166bn) under management.