Nedgroup Investments, a specialist fund of hedge funds provider that belongs to South Africa’s Old Mutual group, has launched the Nedgroup Investments Premium Portfolio to provide institut
Nedgroup Investments, a specialist fund of hedge funds provider that belongs to South Africa’s Old Mutual group, has launched the Nedgroup Investments Premium Portfolio to provide institutional investors with access to a selection of underlying funds that are authentically uncorrelated to equity market risk.
Nedgroup Investments says its aim is to offer a truly alternative investment vehicle to investors who already have significant market exposure to equities. The Premium Portfolio Fund has capacity up to USD1bn and will target a return of over Libor of between 8 and 12 per cent net of fees per annum, with a volatility objective of less than 3 per cent.
The fund will focus on longer liquidity niche strategies that have already been proven within Nedgroup Investment’s flagship Target Return Fund, in which these strategies make up 20 per cent of all holdings.
Since its launch in July 2000 the Target Return Fund has delivered a 4 per cent outperformance of its benchmark, US dollar Libor, with no down years, compared with a target outperformance of 3 to 5 per cent.
The Premium Portfolio Fund will invest in asset-backed lending in the US, Europe and Asia, specialised distressed debt, structured finance, multistrategy funds and insurance.
‘The number of conventional hedge funds which are positively correlated to the equity market has reached unacceptably high levels,’ says Nedgroup Investments managing director Andrew Lodge.
‘A truly uncorrelated return will provide investors with the diversification benefit they are looking for. The excess return provided by a high-quality market neutral style will prove attractive on a relative basis.
‘High quality risk-adjusted returns with low volatility can be accessed in the structured alpha space over a medium time horizon through careful portfolio construction. We have a proven record of delivering risk-controlled investment products that ‘do what they say on the tin’, and the Premium Portfolio will give investors greater choice as they seek diversification of assets in 2008.’
The fund will target institutional investors including pension funds, family offices, banks, and high net worth individuals in Europe, the Middle East, Africa and Asia. Nedgroup Investments, which has offices in London and the Isle of Man, currently has USD920m in assets under management. Its funds are domiciled in the Isle of Man and both Premium Portfolio and Target Return are listed on the Irish Stock Exchange.
