Guernsey-based ARENA Fund Management Ltd is set to launch two Bahamas-domiciled funds of hedge funds at the end of the month.
Both the ARENA Conservative Fund and ARENA Dynamic Fund will invest in a diversified portfolio of hedge funds, employing a variety of directional and hedged strategies. The ARENA Conservative Fund is aiming for a return in line with the CSFB/Tremont Index (6 to 12 per cent and a volatility below the fixed income level, while the ARENA Dynamic Fund is constructed in order to match the volatility of the CSFB/Tremont Index but, with a return largely superior (12-24 per cent).
ARENA Fund Management Ltd bought their methodology from Soprigest SA, Société Privée de Gestion, a company based in Geneva, lead by Guido Sessa, which has successfully constructed and operated funds of hedge funds for managed accounts since 1996.
"Our Conservative Fund was created to be a replacement for the role of a bond or deposit allocation in an investor's portfolio," said ARENA risk manager Stéphane Gosteli, The audited nine-year track record posted an annual return of 8.82 per cent (net of fees - no negative year) with a 3.16 per cent volatility.
The ARENA Dynamic Fund uses only long/short funds with a very diversified geographical breakdown. Its audited nine-year track record, has produced an annual return of 14.23 per cent (net of fees - no negative year) with a 8.43 per cent volatility. Both funds will be allocated to a maximum of a dozen hedge fund managers.
Both funds will be allocated to a maximum of a dozen hedge managers while the sharpe ratios for both are also are very good with a value of 1.92 and 1.56 respectively for the ARENA Conservative and the ARENA Dynamic Funds
Pictet & Cie (EUROPE) S.A. in Luxembourg, is the sub-administrator and custodian of the funds and the auditing is being carried out by Deloitte & Touche SA (Luxembourg). Both funds are out of the ESD scope.