product launch | new Sterling-based savings programme gives investors access to funds normally closed to new investors
Platinum Wealth Management is set to launch the first regular savings programme for private investors wishing to gain access to the potential returns available from hedge funds investments.
The sterling-based Platinum Savings Programme, developed in association with Hansard International, provides investment in either funds of funds or single hedge fund managers at a minimum investment of only £150 per month (or equivalent in other currencies).
The Isle of Man-based savings programme provides investors with access to the Platinum Portfolio, which includes funds normally closed to new investors or which usually have high minimum investment requirements.
Craig Reeves, managing director at Platinum Wealth Management, said: "Funds are chosen on the basis that they have a long-term track record with its management team, the management have a lot of money invested in the product, as well a long-standing relationship with prime brokers."
Initial asset allocation includes 35% in the equity market neutral Platinum AllWeather Fund; 30% in the equity multi-strategy Platinum Equity Plus Fund; 20% in the equity long/short Platinum Washington Fund; and 15% in distressed securities in a new launch: the Platinum Turnberry Fund (see page 7 for more details).
The Platinum AllWeather is an absolute return strategy with the objectives of low volatility and consistent monthly absolute returns. The fund takes advantage of mispriced options created by market volatility and invests in broad-based equity index baskets with an option overlay to hedge. The Platinum Equity Plus Fund is a multi-manager fund of hedge funds. The fund offers access to around 20 managers, many of which are closed to new investment. Portfolio strategies include long/short US equity investment, market neutral and arbitrage.
Reeves said: "We have been testing the product in Japan to see what the reaction was like as the country has a ratio of 40% of the world's savings. So far, it has received a good reaction from investors and we have plans to roll the product out in other countries. For example, we plan to create an EU-friendly version."
Reeves thinks it is a good time to create a product like this as there has been more interest from smaller investors in hedge funds. By having a hedge fund linked to a savings plan makes the product available to smaller investors, not just high net worth individuals.
The product will be sold through intermediaries and not directly to public. This is to make sure it is only available to investors with knowledge of hedge fund products. The intermediaries can decide whether the product is suitable for clients.
Initially, investors will need two years worth of premium to invest and then contribute £150 per month or £1,200 per year. Maturity of the plan can be selected by the investor from 10 years out to a maximum of the investor's 65th birthday.
Once invested, contributions will accumulate in a virtually tax-free environment and, at maturity, a lump sum payment may be made without deduction of Isle of Man tax.
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