Old Mutual Asset Managers (OMAM) has launched a bond that invests in hedge funds and offers investor...
Old Mutual Asset Managers (OMAM) has launched a bond that invests in hedge funds and offers investors a protection rate equivalent to 80% of its highest ever price.
The Prosper 80 Bond has a targeted return of cash plus 4%pa after charges. It also offers a protected price of 80% of the highest ever fund price: every time the prices reaches a new high, the protected price rises.
The capital growth will come from a fund invested in an actively managed combination of a diversified hedge fund portfolio and cash. Hedge funds are to be chosen by OMAM's multi strategy products team and will include global equity market neutral, equity long/short, CTAs and global macro.
Investments are held within the OMAM managed account platform, rather than funds. This means the investment team has full transparency of underlying holdings for more efficient portfolio management and full legal title to the assets.
There are no lock in periods and no redemption penalties. As it is an open-ended structure it will have weekly pricing and weekly dealing. The product will be available to investors in the Middle East, Far East and Europe via IFAs in September.
Charles Bathurst, head of hedge fund distribution, said: "Traditionally the preserve of wealthy investors and increasingly utilised by institutions, investors have been attracted by the ability of hedge funds to deliver positive returns in all market conditions with superior risk-adjusted returns."
Min inv: $10,000/e10,000
Commission: 3% intermediary, 0.5% trail
Charges: Annual mgt 1.5%
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected