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Old Mutual offers sophisticated return


Old Mutual Global Dynamic Fund

Oeic fund of funds

Growth by investing in a portfolio of Old Mutual unit trusts and hedge funds, and externally managed property funds

Minimum investment:
euros 125,000

Investment split:
40% equity unit trusts, 6% bond unit trusts, 40% alternative strategies, 14% cash

Place of registration:

Annual 0.75%,
performance fee 10%

Subject to negotiation

Tel: 0808 100 2715

The Old Mutual global dynamic fund is an offshore Oeic fund of funds aimed at high-net-worth clients. It has the ability to invest across five asset classes – equities, bonds, hedge funds, property and cash. The equity, bond and hedge funds within the portfolio will be managed in-house, while the property funds will be externally managed.

Charter Devon Law principal Michael Posner says: “This product is undoubtedly suitable for incorporation in a portfolio for the relatively risk averse, but investors must be adequately sophisticated to understand the nature of the product.”

Posner points out that the fund aims to deliver absolute returns, while also offsetting risk by diversifying across investment strategy, asset classes, managers, and regions. He says: “This intention fits effectively into the mind-set of the average investor at this time and has lead to the increase in the popularity of this type of fund in the post-Sandler environment.”

Posner regards the charging structure as reasonable. He says: “As the overall charges are based on Old Mutual&#39s belief that it can achieve the benefits for investors, the charges seem fair and reasonable.” He feels the hurdle rate of Libor plus 6 per cent, which must be reached before the 10 per cent performance fee is charged, is a reassuring as it is an absolute bar the company feathering its nest at the expense of their clients. He adds: ” One would hope to see quite a few others emulating very soon.”

On the downside Posner notes that the fund&#39s minimum investment is set at a daunting level because it provides access to Old Mutual&#39s hedge fund range. He says: “Certainly, the current available documentation requires it primarily to be placed before a professional investor, and would require acquisition in the UK by a pension fund, stockbroker or other fund manager. The lengthy prospectus is detailed and does cover every element, pitfall, and benefit of the offering. It has a certain impenetrability that requires the reader to have more than a passing knowledge of the subject under review and is clearly not intended as &#39point of sale&#39 material.”

Posner points out that the restrictions this places on the offering make it too specialist in its present form to be of interest to the average IFA. But, given those restrictions, he feels it still warrants examination for inclusion in a portfolio.


Suitability to Market: Good
Investment strategy: Good
Charges: Good

Overall 8/10


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