Long/short equity fund launches on Merchant’s Ucits platform
Merchant Capital, a Ucits III platform provider to the hedge fund industry, has announced that its first client is now fully operational.
Robert Maxwell of Tressis will act as investment adviser to the fund, named the Merchant European Equity Fund, while Merchant Capital is the fund’s investment manager.
Tressis, a Spanish distributor of investment funds, structured products, fixed income and other financial products, is also the distributor of the fund.
The fund’s strategy is primarily equity long/short based on a universe of 600 stocks, with characteristics of an equity market neutral strategy. The initial structure of the Merchant European Equity Fund will be based on 20 long and 20 short positions, which are re-balanced on a monthly basis. Typical gross exposure will not rise above 180 per cent and in compliance with Ucits III regulations, the fund has a hard limit of 200 per cent gross exposure. Net exposure will be kept within a range of 20 per cent at all times.
Merchant’s Ucits III umbrella structure allows asset managers to launch Ucits-compliant investment vehicles, typically hedge funds. Managers who use the platform are free to brand their products as they prefer to best reflect the style and investment philosophy of their fund.
The fund is fully Ucits III compliant and offers investors weekly net asset valuations. The fund is initially targeting high net worth individuals and institutional investors across Europe, with plans to also reach family offices in Europe and North America.
George Cadbury, director of Merchant Capital, says: “Tressis’ fund is an excellent example of how we wish to facilitate innovative investment managers with the essential operational and regulatory support to bring their investment ideas quickly to market. We are now in advanced discussions with a number of other fund management companies looking seriously at how they can use us to launch Ucits funds this year.”
Maxwell adds: “We believe that a fund of this type within the Ucits structure provided by Merchant Capital will be very well received by investors looking for consistent returns with low volatility.”
PNC Global Investment Services (Dublin) provides the fund’s fund administration services, and PNC International Bank (Dublin) is the custodial and trustee services provider. Carne Global Financial Services provides independent corporate governance to the fund while Merchant uses Kinetic Partners for risk management and valuation.
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