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Investec plants foot in hedge FOF market

Investec Asset Management has established the absolute return fund series II, a fund of hedge funds that invests in a range of hedge funds that use different strategies.

Investec has been trying to get into the hedge fund of funds market since 2001, but did not have the experience to do this. The solution was to outsource the management of this fund to a specialist hedge fund of funds manager, Olympia Capital Management. Investec already outsources some of its investment funds to BlackRock, so this is not a new concept for the company. Outsourcing to Olympia may also provide the fund with access to hedge funds that are closed to new investors.

The fund aims to produce returns of between 5 per cent and 8 per cnet above the US Libor rate in all economic conditions. It will invest in hedge funds that use global macro, fixed income arbitrage, convertible arbitrage, statistical arbitrage, long and short equity, event driven and relative value strategies. Each strategy will suit different economic conditions and a wide selection of strategies should ensure the fund performs well in all conditions.

The fund of funds approach is designed to lower the investment risks through diversification, but another advantage is that IFAs may not have the knowledge and experience to wade through a universe of 6,000 individual hedge funds to select those that are right for their clients.

The fund of funds approach takes this burden away from the adviser and places it with an experienced fund of funds manager who will have a better understanding of the hedge fund industry.


Outside edge

I have a lot of sympathy for Nationwide&#39s stance on the equity-release market. It is clearly both nonsense that two alternative and equally valid solutions to the burgeoning requirement for the elderly to augment their income by using the equity in their home fall either side of the regulatory divide. They are also correct in […]

L&G first insurer to get FSA waiver

Legal & General is the first company to be granted a solvency waiver from the FSA. The regulator wrote to life offices in January to tell them it would grant waivers of solvency rules before a complete overhaul of the system scheduled for 2004.

Revenue dilutes anti-avoidance measures

The Inland Revenue has watered down a series of tough anti tax avoidance measures aimed at Britain&#39s battered life insurance industry.But accountants warned that life offices are still likely to face higher tax bills at a time when many are grappling with huge losses caused by the worst stockmarket conditions for a generation. The Revenue&#39s […]

UK equity income funds to remain strong says CSAM

Credit Suisse Asset Management is predicting UK equity income funds will be the best UK equity asset class for the foreseeable future after recording a strong performance over the last 10 years. Its managing director Ian Chimes says its Monthly Income Fund has outperformed the safer average building society account over this period providing more […]

Retirement - thumbnail

(Another) downhill stroll — retirement planning

A report published this morning by the CIPD (CIPD Employee Outlook March 2015) provides yet more interesting data to the changing landscape of retirement planning. It should be remembered that we are in a period of genuine flux here given that the default retirement age was scrapped three years ago, and new pension freedoms come online in April. Both of these alterations will have a huge impact on how employees plan for their retirement.


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