First tranche raised $150m for the company in november 2006
New Star is offering a second tranche of its hedge fund tracker this month, with the placing closing on 21 March.
Hedge ETS is a London-listed daily tradable security which gives access to hedge fund performance by investing in the RBC Hedge 250 Index.
Ravi Anand, director at New Star, said: "Hedge ETS offers unique access to the performance of the hedge fund asset class through a well-constructed index with the added benefit of daily liquidity."
The first tranche in November 2006 raised $150m, and attracted investors from 20 different countries, such as Spain, Switzer-land and various offshore jurisdictions.
Anand added: "We believe that Hedge ETS is the most representative investable benchmark for hedge fund industry returns and this second offering is in response to strong demand from investors.
As with the initial offer, we expect interest from institutional investors and wealth managers seeking to benefit from the portfolio diversification benefits provided by hedge fund returns."
Hedge ETS - which stands for Exchange Traded Securities - gets exposure to the RBC Hedge 250 Index through swap contracts with the Royal Bank of Canada. The index was created in July 2005 and has closely tracked returns on hedge funds and outperformed other recognised hedge fund indices, according to New Star.
It has produced an annualised return of 11.1% compared to returns of 8.7% across average investable hedge fund indices. Total assets under manage-ment in the index are $206bn, representing around 20% of industry hedge fund assets under management.
New shares in Hedge ETS are being offered in a global placing outside the US and a public offering in the UK. Two types of shares are being offered. 1X shares offer unleveraged exposure to the index, while 3X shares target three times exposure exposure. Both are available in euro, sterling and US dollars and minimum investment is s50,000, £40,000 or $75,000.
Shareholders will be able to redeem up to 100% of their shares at close to net asset value on the first business day of January or July each year, subject to 120 days notice. The placing closes on 21 March and the issue price will be determined the following day, based on a price equal to the net asset value per share.
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