Refco Group is launching a series of vehicles for European investors in conjunction with PlusFunds Group, tracking the performance of two S&P investable hedge fund indices.
Dave Kugler, senior vice president at Refco, said PlusFunds has a licensing agreement with Standard & Poor's to use two indices for products ' the managed futures index with 14 underlying funds and its fund of hedge funds indices with approximately 40 underlying portfolios.
The managed futures product was seeded with $70m in December, and had grown to $85m by mid-April.
The investable sub-set of funds from these indices, from which the products will be derived, are selected to replicate as closely as possible the broader indices, and capacity is guaranteed in the underlying funds via segregated accounts.
The vehicles to be launched will differ to suit various European markets' needs and regulations, so may be released as structured notes in one jurisdiction, protected products in another.
Refco is securing partners for distribution in the various markets, and Kugler said Refco either had partners or was in 'late stages of discussion' in France, Austria, Germany, Italy and the UK.
He added Refco may also distribute products from the investable index into Asia and the Middle East. For offshore investors Refco has established Cayman-domiciled structures and is also considering Luxembourg structures and listed vehicles.
Calculation of the indices' values to produce daily net asset values also takes into account the costs of running the portfolio and management fees, so the products based on the indices do not display markedly different performance to investing directly in the funds, and paying associated costs.
Managers whose style drifts from their original remit will be replaced in the investable indices, and so in the products based off them.
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