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Man guarantees the hedge

MAN INVESTMENTS

Man RMF Multi-Style Series 2

Type:
Capital-protected hedge fund

Aim:
Growth by investing in managed futures, relative value, event driven equity hedge and global macro strategies

Minimum investment:
Lump sum $50,000, euros 50,000

Investment split:
50% managed futures, 23% relative value, 13% event driven,
7% equity hedge, 7% global macro

Place of registration:
Bermuda

Guarantee: Original capital returned in full at end of term regardless of underlying investments

Term:
13 years

Return:
13%-15% growth a year

Closing date:
October 4, 2004

Charges:
Annual up to 1%,
10% performance fee

Commission: Subject to negotiation

Tel: 020 7144 2000

The Man RMF Multi-Style Series 2 is designed to perform independently of bond and equity markets by investing in a range of hedge fund strategies.

Chase de Vere Financial Solutions research manager Justine Fearns points out that the first tranche of this product was relatively well received by the IFA community.

She feels the product can offer peace of mind and that the fund of hedge funds structure will ensure there is a large degree of diversity. For investors who are investment savvy, Fearns thinks access to a hedge fund with tax chargeable to CGT is a plus..

While Fearns likes the simple bullet pointed, simple product presentation, she is concerned that it may be too simple. “We want to make sure people fully understand what is happening to their money,” she says.

Looking at the charging structure Fearns says: “Like other products with guarantees and protection built in, the charges are implicit. We&#39re happy with this and I think most investors are. There is clearly no fit from a transparency perspective but this product is not billed to meet those requirements.”

However, on the down side Fearns says: “As hedge funds tend to have a negative correlation to standard asset classes, it begs the question of whether guarantees are needed on hedge funds. Are we just adding cost to a product that, if blended properly with other assets, doesn&#39t need a guarantee.”

“I have a suspicion that normally the answer is yes. However, what Man and Close have been able to do in applying the guarantee is gear the investment into the fund and chase a higher level of return. With these additional risks in place, it felt it was prudent to guarantee the product and that the additional cost will be negated by the expected returns.”

BROKER RATINGS:

Suitability to market: Average
Investment strategy: Average
Charges: Average

Overall 6/10

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