DFD Select is set to launch a fund of hedge funds concentrating on em-erging managers on 15 Octobe...
DFD Select is set to launch a fund of hedge funds concentrating on em-erging managers on 15 October.
The Condor Fund, managed by Jeff Barr and David Martin, will invest up to 25% of assets in managers with short track records in order to capitalise on entering good hedge funds early, when the capital managed is small.
Funds with large assets under management can miss opportunities because they find it difficult to invest in small-cap companies, according to David Tucker, president of DFD Select.
'You make most money on hedge funds when you get in early. This gives us the ability to move into managers who are small enough to move their money around. Bigger players can easily outgrow their strategy,' he said.
The fund's assets will typically be invested in between eight and 30 funds.
DFD's risk management is based on choosing uncorrelated strategies and underlying funds that have a high degree of transparency.
The fund will not invest more than 20% of its assets in any one underlying fund. It may also hold up to 10% of assets in cash.
The performance target for the underlying funds is average annual returns above 15%, with targeted downside volatility of -5% to -10%.
The Dublin-domiciled and listed fund of funds will be available for a minimum investment of E25,000.
It will carry a 1.5% management fee and a 10% incentive payment for managers.
'Failure to pay attention can result in enforcement'
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