Dexion IPO raises GBP 130 million

Dexion Capital has raised GBP 130 million for the London IPO of its latest fund of funds, Dexion Alpha Strategies Limited, which is advised by RMF.

Nick Browne, Director of Dexion Capital (Guernsey) Ltd said: 'We are delighted that this launch has been greeted with such enthusiasm by a broad spread of investors in the UK and Europe. Dexion Alpha Strategies is an innovative product that recognises that attractive returns can be achieved by investing early into new opportunities and provides investors with access to a wide range of hedge fund strategies that target emerging or under exploited sources of alpha.'

Gary Gould, Director of Hoare Govett Limited said: 'This is one of the largest initial capital-raisings to date in the London-listed funds of hedge funds sector and highlights the growing demand for hedge funds within the regulated, exchange-traded structure.'

Dexion Alpha Strategies Limited, a new London Stock Exchange listed, closed-ended fund of hedge funds, has been established to seek to exploit opportunities in developing asset classes and/or sectors where alpha is not already widely extracted by hedge funds.

RMF Investment Management will be responsible for the ongoing day-to-day management of the Company's investment portfolio. RMF is a leading provider of alternative investment solutions in Europe, specialising in hedge funds, leveraged finance and convertible bonds.

As at 31 December 2005, RMF managed over USD 19.6 billion of assets, with approximately USD 16.8 billion invested in fund of hedge fund products.

RMF will initially seek to allocate the Company's assets to underlying funds investing across the following strategies:

  • Asian Opportunities
  • Emerging Markets Macro
  • European Loan Opportunities
  • Special Situations
  • Healthcare Opportunities
  • Commodity Strategies
  • Energy and Emissions.

The initial asset allocation policy will be structured so as to target an annualised return of approximately 8 - 10% over LIBOR over the medium term with annualised target volatility of 4 - 9% in current market conditions.

Background notes: Dexion Capital Plc was established in 2000 and researches, develops and markets hedge fund products to an international institutional investor base. Dexion states: 'The cornerstone of the business is an in-depth knowledge of the fund of hedge funds universe and a proprietary database of approximately 550 fund of hedge fund managers/groups and 1500 products'. Dexion Capital Plc is authorised and regulated by the Financial Services Authority.

Dexion Capital (Guernsey) Limited, established in 2002, manages c.USD 1.3 billion in exchange traded funds of hedge funds: Dexion Absolute Limited, launched December 2002, assets under management USD939m; Dexion Equity Alternative Limited, launched April 2004, assets under management USD235m and Dexion Trading Limited, launched November 2004, assets under management USD145 million. On 20 March 2006 Dexion Absolute joined the FTSE 250 Index and Dexion Equity Alternative joined the FTSE All Share Index. Dexion Absolute is the world's largest exchange-traded fund of hedge funds. Dexion Capital (Guernsey) is regulated by the Guernsey Financial Services Commission.

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