Commerzbank is set to launch an open-ended, Luxembourg-based fund of hedge funds, with fund selectio...
Commerzbank is set to launch an open-ended, Luxembourg-based fund of hedge funds, with fund selection handled by the group's alternative investment strategies group based in New York.
The launch follows the success of the group's two existing closed-ended products aimed at investors in Germany, which operate via a certificate structure. Unlike the two products launched so far, Comas-1 and Comas-2, the new fund will aim to have a higher risk/return profile.
The Comas products give access to around 2530 underlying funds run by external managers mostly in the US and London. The portfolios revolve around seven or eight core strategies with a number of underlying managers in each strategy to diversify business risk.
Key areas of focus for the Comas products are the major arbitrage strategies, including equity and fixed income, as well as event-driven strategies such as merger arbitrage, risk arbitrage and other catalyst-driven trading strategies, as well as futures strategies.
While the Luxembourg product will also have exposure to these areas it will take a further step by venturing into the long/short arena, investing in some managers who have a 'net directional' bias. The exposure to 'net directional' managers will be around 30%, and the fund will target those funds which have a rigorous hedging policy and which have a low beta.
The investment selection will be performed by Kevin Ferro and his team. Ferro said: "We will aim to build relationships with managers. We will target both long and short managers although there could also be some very selective exposure to macro managers."
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