Morley Fund Management is set to launch a £200m Absolute Growth Investment Company (Magic) which star...
The Guernsey registered split capital investment company derives growth for its portfolio from a hedge fund.
Some 55% of the portfolio will be invested into the Morley Alternative Strategy hedge fund,a pan-European long/short hedge fund investing in FTSE 250 and Eurotop 300 indices.
The remaining 45% of the portfolio, managed by Roger Bade, will focus on fixed interest securities, primarily investing in the shares of investment trust-geared ordinary shares.
According to David Keen, director of investment trusts at Morley, the trust is designed to offer positive returns regardless of market movements.
Geared ordinary shares will make up 42.5% of the capital structure, alongside capital shares and zero-dividend preference shares which make up 7.5% each.
Gearing is provided by bank debt making up 32.5%, which will be supported by mezzanine debt financing - a form of junior bank debt - of 10%.
Zero dividend preference shares in the fund have a ten-year life and promise a gross redemption yield of 8.75%.
Managed by Mike Bishop, director of pan-European equities, the hedge fund has an unlimited life and will be available to retail investors through IFAs, although there is no commission on sales.
A minimum investment of £5,000 is required for the fund which is available to retail investors only through IFAs.
An annual management fee of 1.55% is charged on the fund, made up of 1% on assets outside the hedge fund and 2% on the hedge fund itself.
This article first appeared in Investment Week
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