Coutts is to offer its clients access to a new fund of Asian hedge funds to add to its already substantial alternative investment fund range.
The fund will have a middle-of-the-road mandate, aiming to give long-term capital appreciation with a moderate amount of volatility, but, in the tradition of hedge funds, it will aim to keep consistency irrespective of the state of the markets.
Robert Dawkins, head of alternative investments at Coutts, said: 'With Asian markets expected to outperform other major markets in the short to medium term, the region is also expected to benefit from the expected upturn in the US economy. We are confident investment conditions in Asia are now ripe for this type of strategy, which will further strengthen our range of alternative investment products.'
The launch comes as the private bank celebrates the fifth anniversary of its first hedge fund product. Launched in 1998, the dollar-denominated capital return strategy has achieved annualised returns of approximately 8.6%.
'As part of a diversified portfolio, hedge funds offer strong performance for clients with relatively low and controlled volatility,' said Dawkins.
The fund attempts to combine the best available Asian hedge fund managers and combine them in a way that their strategies complement each other, the combination keeping the volatility of the funds down.
The risk ratio of the fund is expected to be superior to traditional investment portfolios. The use of alternative investments and the multi-manager approach works to control volatility.
A specialist alternative investment team monitors the managers closely to ensure they continue to meet the objectives of the programme.
The minimum investment for the fund is £75,000, and additional investment may be made from time to time of £37,500.
Investments can made in the fund in US dollars, sterling and euros.
There is an initial placement fee of 1%, and an annual management fee of 1.25%.
A 10% performance fee on returns from the programme in excess of a hurdle rate US three-month Libor plus 2% pa.
Coutts' hedge fund range has now passed the $4bn mark, making the company one of the largest funds of hedge fund managers in Europe.
Coutts & Co is the UK private banking arm of the Coutts Group, an international private banking group owned by The Royal Bank of Scotland Group.
The Coutts Group manages the wealth of 75,000 high net worth clients from a network of 23 offices in the UK and 14 internationally.
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