Ireland's IIB Bank and HFR Asset Management are partnering to launch an innovative investment bond linked to a dual hedge fund strategy.
The Pinnacle Performance Bond has been specifically designed to offer Irish investors the benefits of hedge fund investing whilst reducing the volatility normally associated with traditional stock market investing. The Bond will have a six year term with no limit on potential returns and be available for a minimum investment of EUR 10,000.
The Pinnacle Performance Bond is a new and original product offering because it will be linked to two parallel portfolios of hedge funds actively managed by HFR. This product offers investors exposure to one portfolio of hedge funds which will be highly equity market correlated - and a second portfolio of hedge funds which will follow a strategy independent of stock markets.
HFR will have the ability to switch instantly from one portfolio to the other, giving investors exposure to the potential upside of equities whilst these are rising, and switching this exposure when the value of equities fall. This dual hedge fund strategy was developed by HFR and IIB Bank in conjunction with Lehman Brothers. HFR is expected to replicate the approach for investors in other European territories following its launch by IIB.
Commenting on the launch today, IIB Private Banking Senior Manager, Mark Donnelly said: "The merits of investing in funds of hedge funds are well proven. Over the last decade, hedge funds have on average delivered returns almost four times that of equity markets. I have no doubt that further opportunities for hedge funds will continue over the coming years as investment markets react to changing circumstances. The Pinnacle Performance Bond will seek to exploit such opportunities by allowing the return to be actively linked to a range of investment strategies at any point in time over the six year term. However, the Bond adopts a 'safety first' approach by ensuring that the investor's capital is never placed at risk."
John Godden, Managing Director of HFR in Europe, noted: "This product is a great demonstration of HFR's ability to work with strong partners to maximise risk rated returns with a package that is very comfortable for first time investors into hedge funds. IIB's understanding of their clients' needs coupled with Lehman's expertise in structuring products and HFR's strong portfolio management skills and risk controls has produced a product that will deliver results for investors irrespective of market conditions. This model is infinitely replicable in the other European markets and we look forward to working with other distribution partners to roll it out in the future."
The new investment bond offers 100% capital security for personal, corporate and pension investors.
A closing date of 1st November has been scheduled for the Bond offering or sooner if the offer is fully subscribed.