the fund of hedge funds manager is planning a foray into the institutional side of the market with new range
Alternative investment specialist GNI has renamed itself Bright Capital amid a flurry of initiatives and product launches, including a global fund of hedge fund launch and a refocus on the institutional side of the market.
The Old Mutual subsidiary is currently retail-focused, but will launch its institutional range after this summer, possibly later taking the same products and offering them back into the retail market.
Despite the changes Bright is still continuing its retail program. The next Bright product being finalised is a retail global multi-manager closed ended hedge fund, to be provisionally available from 19 May to 30 June. This Luxembourg-listed, euro-denominated product will aim to return 11%-13% with a volatility of 8%-10%. Rabobank will provide a seven-year capital guarantee ' the first one it has ever provided to a segregated account structure.
The institutional range will be launched in Q3 this year, offering the same sort of product range but with a capital guarantee only if clients demand it, something Hollier suspects is unlikely.
'Controlling Risk' is the company's new mantra ' every new product will be structured according to VAR, industry exposure, currency exposure, and so on.
Bright Capital emphasises the importance of the fact that it uses managed accounts in its multi-manager fund programme. This gives it a significant advantage over fund of funds players in terms of flexibility and control, according to Hollier.
The main advantages of the multimanager approach appear when a fund starts to perform badly: a managed account can be closed down immediately, rather than having to wait for the next fund redemption date.
And as the account belongs to Bright, the company know at any time what the exact composition of their portfolio is.
One of the perceived disadvantages is that not all fund managers will give managed accounts, limiting the fund universe. So, can Bright access all the best managers?
'To the extent that the answer is not totally 'yes,' it is not a problem,' said Hollier.
First this is because generally Bright is not interested in buying managers who will not give complete transparency. Second, most are open to persuasion if they feel their time spent providing stats is not wasted.
'You have to persuade them you will use the information usefully, not just as wallpaper,' explained Hollier. 'We are looking to provide high-tech daily transparency to clients,' he added. To this end they have spent a substantial $1m buying and installing the latest risk management platform from Sunguard.
This follows an 18-month period of modernisation and change since the appointment of chief executive, Ross Jones, and development director, Matt Hollier.
The change at GNI fits into mother company Old Mutual's strategy of owning a selection of separately-run niche companies, each specialising in a certain asset class or client-type.
Scope for change post-Brexit
To tackle liquidity issues
More than £100m in pipeline
DB data published last week
'Heavily influenced by Morningstar'