Old Mutual Asset Managers (UK) (OMAM) is targeting the institutional market with the launch of the Old Mutual Spectrum Plus Fund.
The new fund, which will be managed by OMAM's Multi Strategy Products team, is expected to be available from April.
'The launch of Old Mutual Spectrum Plus is a logical extension of our product range, complementing our two lower risk products, Old Mutual Spectrum and Old Mutual Prosper 80,' says Richard Tomlinson, head of OMAM's Multi Strategy Products team. 'The new fund is managed using exactly the same, proven investment approach, utilising our managed account platform. With our efficient use of leverage, the new fund offers investors the opportunity to access a higher risk budget with corresponding higher expected returns.'
By launching this fund, OMAM is utilising its managed account platform to respond to the demand for absolute return funds with higher return targets and carefully managed risk budgets. The fund has a target investment return of cash plus 12% p.a. with an annualised volatility target of 12% and will be launched in April 2006 with minimum initial capital of USD 25 million.
OMAM's proprietary managed account platform gives the investment team the ability to use leverage whilst being able to closely manage the portfolio's risk characteristics by having full, real time transparency of all positions in the underlying portfolio.
The team, headed by Tomlinson, has built a strong track record as manager of the Old Mutual Multi Strategy hedge fund and Old Mutual Prosper 80 structured product, which are all managed using the same investment approach and the managed account platform. Old Mutual Spectrum Plus has the highest risk/return profile of the three products. Each risk-focused portfolio is diversified by strategy, style, region and manager and includes long and short positions in a range of instruments, including equities, bonds, futures, options, currencies and commodities.
OMAM will be offering a distributor and institutional share class on a hedge fund, with a minimum investment of GBP 100,000, USD 100,000 or EUR 100,000 for the distributor share class and GBP 5 million, USD 5 million or EUR 5 million for the institutional class, which will carry no annual management fee and a performance fee of 10% over LIBOR. The distributor class will carry the option of up to a 3% initial charge payable to the adviser, a 1% annual management charge, which includes 0.5% trail for advisers and a performance fee of 10% over LIBOR. The fund will be Cayman-domiciled and listed on the Channel Islands Stock Exchange.
At the same time as OMAM launches the Old Mutual Spectrum Plus Fund in April, and subject to shareholder approval, the existing Old Mutual Multi Strategy Fund will be renamed Old Mutual Spectrum Fund and will adopt the same share class and fee structure as Old Mutual Spectrum Plus.
'Our Multi Strategy Products team, are expert risk managers and with the launch of Old Mutual Spectrum Plus, we now have a higher-risk alpha generating product,' says Peter Baxter, OMAM's Chief Executive. 'The team's specialist risk management approach, utilising the transparency provided by our established managed account platform, is tailor made for investors such as institutions looking for absolute returns, excellent risk management and an investment strategy offering long term asset diversification.
'Our Multi Strategy Products team and their range of Spectrum funds and structured capabilities are key to our plans to grow our institutional business and now offer tailored pricing for this market with Old Mutual Spectrum and Spectrum Plus both offering an institutional share class with no aannual management fee.'
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