product launch |both funds of hedge funds have been listed in dublin to open them up to the retail market
Cardona Lloyd is continuing its retail alternative investment strategy with the Dublin listing of its Hedge Portfolio products, opening them up to personal pension plans.
The two funds of hedge funds have a track record of more than a decade. The manager, who keeps himself anonymous, partnered with Cardona for the purpose of expanding into the retail market.
The first product - the A share class - is a dollar-denominated fund investing in arbitrage strategies; the B class shares are euro-denominated and higher risk, being able to take a wider range of investments. Between them the two funds hold 65 underlying portfolios.
The unnamed portfolio manager has been running the funds for institutional clients for the last 10 years but two years ago joined up with Cardona Lloyd to make the funds available to retail investors. The minimum investment is $/E12,500.
"The dollar fund has only had five down months in the past five years," George Cardona, a former adviser to UK Treasury in the 1980s and now at Cardona Lloyd, said. "The euro fund is more aggressive and volatile," he added. Listing them makes them available through personal pension plans in a bid to boost assets.
In October, the A share was up 0.38% while the Euro B share was up 1.97%. A year to November shows the funds were up 4.79% and 4.43%, respectively. In the longer term, the A fund returned 4.1% in 2002 and the B share 1.9%.
This compares with the MSCI World, which was down 21.1% and the three month US T-bills, that returned 1.7%. In 2001 the funds returned 6.9% and 8.9%, while in 2000 it was 23.5% and 8.6% respectively.
Cardona said: "We are in a partnership with a chap who runs the funds but wants to do it without the publicity, which is where we come in. We shield him while he continues to pick the underlying funds."
The A share's principal holdings in October were Argent Classic, Brevan Howard, Citadel Kensington, DE Shaw Laminar, DE Shaw Composite, Feingold, Julius Baer Diversified, KBC Multi Strategy, Kingate + Trotanoy and Vega RV. The B share's principal holdings were Anegada, Brevan Howard, Caxton, DE Shaw Composite, London Diversified, Niederhoffer Global, Quadrangle, Tower, Vantis International, Vega RV and VR Distressed.
By strategy the dollar fund break down is 27.4% in fixed income arbitrage, 19% equity/options arbitrage, 18.9% multi-strategy, 16.3% distressed/high yield and the remainder in convertible arbitrage and relative value. The euro fund is split 34.4% relative value/distressed and event driven; 25.1% equity long short; 23.4% global trading/futures and macro and 17% in special situations.
Cardona Lloyd & Co is a London-based investment bank- ing firm which offers corporate finance services in addition to investment management. The fund's administrator and custodian is the Bank of Butterfield in Guernsey.
Acquisition completed earlier this month.
Changes to take place by next year
Launched 18 November
Investment Association to create new labels