Barclays Capital and Signet Capital Management are launching a bond offering access to a diversified, multi-manager, multi-strategy fund of hedge funds.
Performance is linked to the Barclays-Signet Global Hedge Fund, a bespoke fund of hedge funds created and managed by Signet Capital Management within overall risk guidelines monitored by Barclays Capital. It invests in approximately 30 underlying hedge funds.
David Stuff, Head of UK Investor Solutions at Barclays Capital, said: "With Signet's experience and unique hedge fund risk management process this product offers clients something different for their investment portfolio. We've already had significant interest and hope to see the deal oversubscribed."
The Signet group, established in 1993, is a specialist fund of hedge funds investment manager and investment advisor. Signet's clients comprise financial institutions, pension funds, high net worth individuals and family offices.
Seymour Banks, Director, Signet Capital Management said: "We want to give smaller investors the opportunity to access the best fund of hedge funds on institutional terms in a relatively secure environment".
The bond provides investors with a combination of:
Up to 200% exposure to the underlying fund with additional funding provided by Barclays Capital
Capital Protection with a minimum of 90% repayment of the initial capital investment, whether the value of the fund goes up or down
An annual variable coupon giving investors a regular annual return equivalent to half of the annual growth in the fund
Portfolio diversification away from equities and bonds.
Tax efficiency - gains on the bonds are taxable as a capital gain
Access to Signet's significant investment management experience.
Signet's management team consists of 12 investment professionals, and the senior principals at Signet have over 150 years of relevant investment and hedge fund experience.
Signet's CIO Robert Marquadt said: "We place great emphasis on stability of returns and believe that this investment should be viewed as being a relatively conservative one that seeks to provide:
• Stable investment returns of 3 to 5 per cent above Libor on an annual basis
• Low volatility (the fund's expected volatility is less than 4 per cent)
• A high level of diversification across both underlying investment strategies and investment funds."
The Barclays-Signet Global Hedge Fund bond launches on 30 October 2005.
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