Platinum Capital Management has introduced a hedge fund that invests in US equities using long and short strategies.
The Platinum Washington fund is available directly or through the Platinum wealth management bond. It will be managed from the US on Platinum's behalf by Washington Asset Management, which has a similar fund called the Washington US fund.
The existing fund is now closed to new investors, but the Platinum Washington fund will be managed on the same basis. It will take long positions on stocks listed on the S&P 500 that look likely to grow, but will go short on stocks which are likely to fall in price.
The fund aims to limit the downside in falling stockmarkets, so investors lose less than they would if they invested in conventional equity funds, while also producing the high returns when stockmarkets recover.
Craig Reeves, managing director of Platinum Capital Management, says that the company is usually reluctant to offer single hedge funds to investors, but has made an exception in this case due to Washington Asset Management's track record in long and short equity strategies in the US.
This fund is likely to appeal to institutional investors such as private banks. But it could also attract high-net-worth clients who can meet the high minimum investment and who feel that there may be a recovery in the US within the next 18 months. However, this fund's narrow focus on the US and the use of one strategy make it a high-risk fund compared with global funds of hedge funds.