Emotional Assets Management & Research is taking a fund of funds’ approach to 60 per cent of its new Emotional Assets Fund 1, an offshore fund investing in tangible assets such as art, photography, coins and stamps.
The company will use a hybrid strategy of investing in funds and directly in assets. A fund of funds’ structure will provide a long-term strategic core, with direct investments in satellite holdings providing the tactical asset allocation. Around 60 per cent will go into funds that invest in art, photography, musical instruments, diamonds, coins and stamps, while direct investments will be made into vintage watches and jewellery, rare ceramics, manuscripts and atlases.
Investments may be made directly in assets where there are no available funds or where due diligence finds them unsuitable. Due diligence will take place on the sustainability of the underlying fund as well as the underlying asset and each fund will comprise 5 to 10 per cent of the portfolio.
Emotional Assets Fund 1 will target annual returns of 15 per cent during its five-year life and is available to investors with a minimum investment of £100,000.
The company says that broadening the portfolio to include a range of assets will provide a universe of around 20 funds and it believes there will be more funds to choose from as further launches take place over the next 12 to 18 months. The fund will have exposure to around six funds, which are expected to be transparent.
Emotional Assets Management & Research managing director Bernard Duffy says: “We will insist on transpar- ency to those funds we give assets to, otherwise we could not manage our fund. Some funds may not be transparent but if you go along to them with a cheque from a fund of funds’ manager, they become transparent. We hope to act a catalyst in this area for greater transparency.”