product launch | Man Multi-Strategy series 6 to be underwritten by ABN amro and aim for 15-17% annualised returns
Man Group has launched the sixth of its multi-strategy hedge funds, with a 120% capital guarantee underwritten by ABN Amro on notes maturing on 31 August 2016.
The redeemable structured bonds of Man Multi-Strategy Series 6 Ltd will aim for medium-term annualised returns of 15% to 17% on volatility of 10% to 12%. It is available via dollar and euro-denominated bonds until 5 December, with its subscription period having started already.
It will also include a profit lock-in feature assuring investors profits from the portfolio, achieving net new trading profits.
James Jacklin, Europe regional manager for Man Global Investments, said Man would aim to achieve the target returns through bottom-up manager selection between five strategies, and differing allocations to various strategies on the basis of return assumptions. "But it is the quality of the underlying investment managers that is the key," Jacklin said of the portfolio which will be "highly diversified" between managers.
Stanley Fink, Man Group"s chief executive officer, said the company was targeting risk in its products as investors" risk appetites changed over time, and letting returns flow from the targeted levels of volatility in the portfolio. Jacklin said the indicative exposures in the fund, based on 120% participation on day one, would be 43.2% of NAV to managed futures funds - possibly partly through bespoke portfolios constructed by RMF, or through Man"s AHL futures programme.
Another 24% would go to arbitrage funds, spread across its various manifestations, 23.2% in funds of funds and 20% in equity hedge, with the remaining 9.6% to long/short equities.
Given a 100% participation the allocations to the respective strategies would be 36%, 20%, 19.3% and 16.7%, with 8% to long/short equities.
On day one the provider will use $70 in every $100 committed to buy zero coupon bonds, with the remaining $30 supplemented with $20 under a credit facility.
The initial investment exposure of 120% of NAV could well rise to 150% during the investment"s life, with the possibility to increase the guaranteed amount at maturity by implementing profit lock-in once the investment exposure reaches 150% of NAV.
Commitments to the product must be of at least $50,000 or E50,000. The bonds are redeemable monthly. However early redemptions will incur penalties. Redemptions made before 1 January 2005 will incur a fee of 4% the bond"s net asset value (NAV). From 1 January onwards no early redemption fees attach to sales.
FCA checked files
Properties do not exist
Follows active fee cuts in June