Platinum Capital Management has established Platinum portfolio, a multi-manager hedge fund of funds that invests in six of the company’s hedge funds, one of which is also a hedge fund of funds.
The six underlying Platinum funds are managed by companies including US-based Washington Asset Management, Shanghai-based Dynasty Asset Management and London-based City Fund Management. Together, they diversify across hedge fund strategies on a global basis but will not carry equal weightings.
Platinum premier represents the highest weighting at 25 per cent and invests in UK, US and European government securities using long/short strategies and interest rate arbitrage. Platinum all weather invests long and short in companies listed on the S&P 500 index, Platinum Turnberry invests in distressed US debt, while Platinum dynasty applies the long/short strategy to Chinese equities. Platinum Washington invests in US equities using long and short strategies and the Platinum equity plus hedge fund of funds invests in at least 20 hedge funds, some of which are closed to new business.
Each of Platinum’s funds has a minimum investment level of £60,000 but the company wanted to offer investors the chance to access more than one fund without meeting the individual investment levels. The result was that it set the minimum investment level for Platinum portfolio at £30,000.
Platinum believes this is different to hedge fund of funds form other companies because it has invested with the managers for up to five years, which provides evidence of performance throughout the cycle.
The fund is likley to be of interest to sophisticated investors who like the idea of a diverse hedge fund portfolio but cannot meet the minimum investment to invest individually in the underlying funds.
However, it has been a tough year for hedge funds which is unusual considering they are meant to perform best when the stockmarket is flat. Although this may put some people off hedge funds, others will regard the Platinum portfolio as a possible solution due to its high degree of diversity.