Commerzbank Securities is set to launch the second in its series of multi-manager hedge fund products...
COMAS-1, launched in early 2000 and issued as a certificate, was the first product to offer German investors a hedge fund-related multi-manager product.
COMAS-II will continue the same 'absolute return' strategy as its predecessor as well as offer a currency hedge feature to minimise the effects of fluctuations in the global currency markets. It will also have a listing on the Freiverkehr of the Frankfurt Stock Exchange which will enable the product to be sold publicly in Germany and Switzerland.
The product offers access to a diversified portfolio of alternative products. Portfolio construction is actively managed by a team at AIS, the alternative investment strategy group owned by Commerzbank Securities, headed by Kevin Ferro.
Each product gives access to around 25-30 underlying funds, run by external managers mostly in the US and London. The portfolio revolves around seven or eight core strategies with a number of underlying managers in each strategy to diversify business risk.
Key areas of focus include the major arbitrage strategies, including equity and fixed income, as well as event-driven strategies including merger arbitrage, risk arbitrage and other catalyst-driven trading strategies, as well futures managers.
Ferro said: "The COMAS-1 product had a set offer period and closed having taken around $89m. Since then we have seen strong demand from individual and institutional clients looking to access this type of product and as a result we have launched the new vehicle.
"This is partly a result of the strong performance COMAS-1 has seen. Our target was to offer absolute returns with relatively low volatility, and so far the product has not had a single month of negative returns despite the fluctuations we have seen in world markets."
Since the launch of COMAS-1 in early 2000 a number of other German institutions have followed Commerzbank into the alternative multi-manager field with similarly-structured products. Deutsche Bank in particular launched a e1.8bn product earlier this year. Ferro said: "It would be fair to say that this asset class is being validated in Germany. Investment portfolios are becoming increasingly sophisticated. We see strong demand, but at the same time there are some huge product offerings being launched."
Mehmet Dalman, head of Commerzbank Securities, said: "We are committed to leading the way in alternative investment products in Germany, Europe and around the world. COMAS-II is the latest in a series of innovative products that AIS intends to launch for individual and institutional clients in various markets around the world."
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