Man Investments is planning to launch a product specifically tailored for UK investors in conjunction with Close Fund Management.
Close Fund Management is a UK-based specialist retail and institutional provider and a market leader in protected funds.
Man has a history of distributing its products with joint venture partners and has launched around 400 structured products. The alliance with Close represents a new milestone in opening up hedge fund style funds to UK investors.
Last week Man announced that funds under management are now in the region of USD 38 billion. James Jacklin, Regional Manager, Europe, Man Investments said: "This partnership with Close Fund Management, a recognised leader in the delivery of specialist investment products, enables us to offer hedge fund returns in a format tailored to the needs of UK-based investors and to avoid the drawbacks previously associated with these products. Our partnership with Close is very exciting as we feel we have created the ideal formula."
"The UK market is lagging behind other European markets in its take up of hedge funds but we believe this is now set to change. Recent market volatility and negative returns has led to a growing appreciation of the benefits of hedge funds in all market conditions."
The joint Man Close venture will launch a vehicle that invests in hedge fund style strategies specifically designed for the UK market place. It is likely to be modelled on the Man Multi-Strategy Guaranteed portfolio which, with an annualised return of 13.5%, has performed independently of traditional stock and bond investments since its inception in July 2000 thereby providing valuable diversification benefits from a traditional investment portfolio. It is anticipated the new fund will be launched in mid-April.
Close said that its leading position in guaranteed and protected products makes this move a natural extension. Commenting on the new venture, Marc Gordon, Managing Director of Close Fund Management said: "This move is highly significant and could certainly bring about a shift in the UK investment landscape as hedge funds are increasingly drawn upon to diversify traditional portfolios and manage risk. There is now far more focus on generating absolute or real returns which is why we are constantly exploring new asset classes to fulfil this need. We anticipate strong demand for a product that is not correlated to equity markets and which is designed to meet the requirements of the UK investor."
Hedge funds are the fastest growing area in investment management, with funds managed by absolute return managers estimated to have increased by an average of 20% per annum since 1990.
Total funds under management in hedge funds are estimated to total about USD 800 billion worldwide. Fund of hedge funds products have been a major contributor to this growth, with a total of USD 280 billion being managed through the fund-of-funds style.