Pioneer moves into German retail fund of hedge funds market
Pioneer Investments has gained approval from the German regulator (BaFIN) to sell a German-domiciled fund of hedge funds product to the retail market.
Matteo Dante Perruccio, CEO Pioneer Investment Management SGRpA and Head of International, said: "Pioneer Investments is ideally positioned to participate in the initiatives to strengthen the German financial marketplace:
* We have a significant presence in Germany since entering the market in the late 1960s and we are one of the best recognised international asset management businesses.
* We are one of the leading funds of hedge funds managers which is part of the reason we are one of the world's fastest growing alternative investment businesses."
He continued: "Our decision to develop and market this product demonstrates our commitment to the German market. We expect this new product will prove attractive to a wide range of investors seeking consistent absolute returns. We believe their confidence should be enhanced by the high level of transparency and tight risk controls that are integral to our hedge funds. This is a significant development in the European retail market and in time, as other regulators follow the lead of the German authorities our representation in many countries and our credentials as an alternative investment manager mean we are well placed to tap into these exciting business development opportunities."
The new product, HI Pioneer Global Hedge I, is being launched in partnership with HANSAINVEST (the asset management arm of insurance company Signal Iduna) acting as the German investment management company (KAG).
Authorisation was obtained on 13 May 2004, making Pioneer Investments the second FoHF provider to gain approval in the German market.
Day-to-day investment management of the new fund will be delegated to Pioneer Alternative Investments in Milan. The sales target is to raise EUR 100 million by the end of 2004.
HI Pioneer Global Hedge I is a multi strategy FOHF initially incorporating Pioneer Alternative Investments' five single strategy Dublin based hedge funds with a maximum allocation of 20% in each.
Pioneer Investments is already in discussions with external hedge fund managers and plans to include third party single strategy managers before the end of 2004, provided they can satisfy the requirements of the regulator and Pioneer Alternative Investments' due diligence process.
HI Pioneer Global Hedge I will target volatility of 6% and a 10% annual return. Back-testing on the fund has shown a volatility of under 3% and target return of 8.8% since 1999. The minimum investment in the fund is either a lump sum of EUR 500 or EUR 50 per month in a savings plan. Charges are a 1% management fee at FoHF level with zero performance fee.
Background Note: The range of single, multi strategy and multi manager hedge funds are provided by Pioneer Alternative Investments which has its main operations in Dublin, London and Milan, Dublin being the investment centre. Pioneer Alternative Investments (PAI) was formed in 1998 as part of Pioneer Investments' aggressive growth strategy, recognising the increasing importance of the alternative investments industry. Since then PAI has built up a comprehensive range of alternative investment products which include single strategy, multi-strategy and funds of hedge funds. The flagship single strategy fund, Pioneer Global Opportunities Plc, was the first European based hedge fund to receive a fund rating from Standard & Poors. PAI's fund of hedge funds range was enhanced following the acquisition of the Momentum Group in 2002. It has one of the longest established low volatility multi manager funds of hedge funds, AllWeather which has provided consistent returns in all market environments. Pioneer Alternative Investments had total assets under management in excess of EUR 3 billion as at end of April 2004. Pioneer Investments and Pioneer Alternative Investments (PAI) are trading names of the Pioneer Global Asset Management S.p.A. group of companies (PGAM). PGAM is a wholly owned subsidiary of UniCredito Italiano S.p.A.
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