product will be launched in conjunction with aspect capital at the end of february next year
Gem Advisors is to launch an eight-year capital guaranteed product in conjunction with Aspect Capital at the end of February.
Some 60% of the portfolio will be invested according to the philosophy of Gem's own Low Volatility fund of hedge funds, with the remaining 40% invested in Aspect Capital's Diversified Portfolio, a futures and commodities fund.
Miguel Abadi, director of the 15-year-old family office and investment managers, which plans to open a London office in January, said investors will receive full participation from the outset with unlimited upside growth potential.
The product will start with 120% leverage but can leverage up to 150%. The capital guarantee for Gem's third structured offering is provided by SociÃ©tÃ© GÃ©nÃ©rale and will use the bank's managed accounts platform to run the portfolios.
Allocations between the product's two portions will be rebalanced to keep the 60/40 split, according to Abadi, with Aspect's strategies providing a balance to the convergence arbitrage strategies in Gem Advisor's fund of hedge funds. The portion based on the investment philosophy of the Gem fund will have 10-15 underlying managers working in M&A arbitrage, relative value and event-driven strategies.
Aspect's four-year-old Diversified Portfolio invests in roughly equal portions of commodities, currencies, short-term interest rates, longer-term bonds and equities in about 100 markets. The $166m fund will be leveraged five times for use in the protected product.
The combined product targets a 15% annualised return and offers weekly liquidity. It will be available throughout Europe via banks in euro and dollar denominations, as well as sterling given sufficient demand.
Minimum investment is $10,000, with 2% annual and 20% performance charges on the Aspect Capital portion and 2% annual and 10% performance charges on the Gem Advisors portion. There is no initial fee but a back-end load diminishing annually from 4% to nil for early exits during the product's first four years.
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