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Fortune favours Mom structure

Hedge fund multi-manager Fortune Asset Management expects its closed-ended market wizards fund to list on the London Stock Exchange within four weeks.

The company is promoting the fund this month in a series of roadshows across Europe, including the UK. It says the fund will be the only UK-listed hedge fund to invest solely through managed accounts.

Fortune moved market wizards to a manager of managers structure from a fund of funds structure at the end of last year to solve the problem of a lack of transparency in the hedge fund market. Managed accounts allow hedge fund multi-managers greater control over the underlying assets compared with funds of hedge funds.

Liquidity can also be a problem for funds of hedge funds as some of the underlying funds have a tie-in which forces redemptions to take place gradually.

Monthly redemption is possible through managed accounts but Fortune says even this is not enough for some investors. The London listing will improve liquidity further by allowing daily redemptions.

The listed fund will be invested in the existing portfolio of managed accounts held within a Bermuda-registered trust. Fortune says the trust-based managed account structure avoids the need to acquire the shares of multiple offshore companies and separates the control and custody of the assets from the underlying managers. The managed accounts will be held on a platform managed by Chicago-based HFR Asset Management.

Director and investment adviser, UK, Andrew Groves says: “The listed fund will have the same process and same strategy of investing in managed accounts as the original market wizards fund launched in 1991.”

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