RMF has placed a EUR 150 million bespoke hedge fund portfolio with a German institutional client, one of the biggest transactions of its kind within Germany.
The client will access the RMF Three Pearls hedge fund portfolio through principal protected notes issued by Credit Suisse First Boston International, which guarantees the return of 100 per cent of the initial investment at maturity on 31 August 2017.
The portfolio has been designed to deliver attractive risk-adjusted returns through allocation to three distinct hedge fund approaches:
• a diversified fund of hedge fund portfolio that seeks to capture investment alpha through exposure to a number of leading hedge funds, most of which are closed;
• non-traditional investment funds trading mainly in commodities such as metals, base metals, energy, power and soft commodities;
• funds that engage mostly in long/short equity strategies with a clear focus on the Asia Pacific Region.
The notes will have an initial target exposure to RMF Three Pearls of 100 per cent, but this can be increased to a maximum exposure of 200 per cent depending on performance. They also provide a performance-linked coupon.
"It is rare to find a product that has such a substantial and well diversified approach to Asian and commodity markets", said René Herren, head of Structured Client Solutions at Man Investments. "Asia is rich with unexploited opportunities while commodities have proved to be an excellent source of uncorrelated returns. We believe that these two developing areas of the hedge fund industry will provide significant value in coming years.
"The large size and the portfolio structure make this transaction a significant milestone for RMF. More importantly the fact that a large German firm has taken the placement indicates the increasing appetite for these products."
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