London-based Coutts Group has launched a new fund of hedge funds product with a focus on Asian markets.
Coutts' hedge fund range has now passed the US$4 billion mark in assets under management, establishing Coutts, the international private banking group owned by The Royal Bank of Scotland Group, as one of the largest funds of hedge fund managers in Europe.
Coutts said the latest addition to its existing range of alternative investment funds will appeal to clients seeking a diversified but hedged exposure to Asian markets. It will offer long term capital appreciation with moderate volatility in a wide variety of economic and market conditions.
Coutts' head of alternative investments, Robert Dawkins, said: "With Asian markets expected to outperform other major markets in the short to medium term, the region is also expected to benefit from the expected upturn in the US economy. We are confident that investment conditions in Asia are now ripe for this type of strategy, which will further strengthen our range of alternative investment products."
The launch comes as the private bank celebrates the fifth year anniversary of its first hedge fund product. Launched in 1998, the dollar denominated capital return strategy has achieved annualised returns of approximately 8.6 per cent.
"We're delighted that Coutts' capital return strategy has exceeded our expectations," commented Dawkins. "The success of the strategy illustrates that as part of a diversified portfolio, hedge funds offer strong performance for clients with relatively low and controlled volatility."
The new Asian fund is designed to achieve long-term capital appreciation with moderate volatility using a multi-manager approach with world-leading investment managers selected for their different, but complementary investment strategies.
The risk ratio of the fund is expected to be superior to traditional investment portfolios. The use of alternative investments and the multimanager approach works to control volatility. A specialist alternative investment team monitors the managers closely to ensure they continue to meet the objectives of the programme.
The minimum investment for the fund is £75,000, and additional investment may be made from time to time of £37,500. Investments can made in the fund in US dollars, sterling and euros. There is an initial placement fee of 1%, an annual management fee of 1.25%, and a 10 per cent performance fee on returns from the programme in excess of a hurdle rate US 3 month LIBOR plus 2% per annum.
Background Note: Coutts & Co is the UK private banking arm of the Coutts Group, an international private banking group owned by The Royal Bank of Scotland Group. Coutts offers clients a range of products and services covering sophisticated investment products together with expertise in trust and fiduciary services and UK tax and banking services. The Coutts Group manages the wealth of 75,000 high net worth clients from a network of 23 offices in the UK and 14 internationally. The Coutts Group is one of the largest fund of hedge fund managers in Europe.