Schroders has launched a closed ended fund of hedge funds aiming to return investors 6% to 9% annual...
Schroders has launched a closed ended fund of hedge funds aiming to return investors 6% to 9% annually above sterling cash returns.
The offer period for the sterling-dominated Schroders Alternative Strategies Fund Diversified Fund (SASFD), which will charge no performance fee but a 1.5% annual fee, began on 1 September and will close to new investors on 21 November. Reopening the fund at a later date has not been ruled out.
The fund is Bermuda domiciled and listed on the Dublin exchange. It will be similar to the group's existing offshore fund of hedge funds domiciled in Luxembourg, but will not be a mirror portfolio. Its minimum investment of £30,000 may open it to a broader audience of investors than purely high net worth or pension fund clients.
Investors can access SASFD both through Schroder Private Bank and other private client institutions.
The fund, which has no lock-in, will aim for low correlation to equity and fixed income assets by investing in about 20 to 30 underlying funds from Schroders' favoured list of around 98 globally. Most of those selected will use non-directional strategies, such as flexible long/short equity strategies.
The fund is constructed by having between 6% and 12% portfolio exposure to each core fund and then less than 6% to each non-core fund to enhance returns and provide diversification.
The underlying funds will come from equity long short and market neutral, relative value including such strategies as merger and acquisition, fixed income arbitrage and statistical arbitrage.
Other strategies include credit, distressed debt and high yield, along with global-macro and commodities.
Schroders' acquisition of hedge fund business Beaumont earlier this year has added to its team of those experienced in the area.
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