New Star Asset Management has established a fettered fund of hedge funds that invests in an actively managed portfolio of New Star hedge funds.
The New Star managed hedge fund is an open-ended Bermuda-based fund that aims for a return in the region of 10 to 15 per cent a year. The fund is designed to deliver equity-like returns with bond-like risk but will not be correlated to the assets. It will be managed by Gregor Logan, New Star's deputy chief investment officer and co-head of equities at New Star Institutional Managers, and Charles Triton, New Star's head of alternative investments.
The fund invests in seven hedge funds. The New Star hedge fund is a UK long/short fund managed by Alan Miller and will initially make up 26 per cent of the portfolio. New Star Japan hedge Fund managed by Michelle Sanders makes up 20 per cent of the portfolio while New Star convertible opportunities hedge fund managed by Chris Beton and Sajid Ramzan makes up 18 per cent. Around 10 per cent will go into each of the remaining funds - Guy de Blonay's New Star global wealth management hedge fund, Richard Pease and Alan Miller's New Star European hedge fund, and Tim Bray's New Star UK Leaders hedge fund. Finally, Michelle Sanders and Ian Beattie's New Star Asia renaissance hedge fund makes up 6 per cent of the portfolio.
The New Star managed hedge fund is aimed at high-net-worth investors looking to diversify their portfolio and gain actively managed exposure to hedge funds. They will benefit from exposure to a diverse portfolio of hedge funds focusing on different regions, different styles and managed by different fund managers.
However investors will still be relying on a single fund management group to deliver good performance all areas and strategies, whereas some funds of funds blend various specialist management groups to ensure maximum diversity.