In the first of a new monthly series, WealthBriefing brings you a round-up of fund and hedge fund management product launches, as well as ne...

In the first of a new monthly series, WealthBriefing brings you a round-up of fund and hedge fund management product launches, as well as news.

Vontobel has entered into a joint venture with German-based Postbank to develop a joint asset management business. As part of the agreement, Vontobel will manage Postbank distributed funds. Vontobel said in a statement: “This will enable Vontobel to access a new and attractive sales market in Germany - one of its strategic growth market. This step underscores the Vontobel Group's objective of achieving future growth via partnerships, among others.” Vontobel will gain access to more than 450 Postbank investment consultants, which operate throughout Germany. The Zurich-based bank said that further cooperation with Postbank is likely. Currently, Vontobel operates offices in Frankfurt and Munich.

New Star International has launched a new sub-fund of New Star Global Investment Funds, a Dublin-based OEIC. New Star Euro High Yield Fund will be managed by James Gledhill, head of fixed income at New Star and currently rated “AAA” by Citywire. The new sub fund will aim to achieve a high level of income with the potential for modest long-term capital appreciation and is being targeted at cautious investors wishing to protect capital and benefit from a high level of income.

The portfolio gross redemption yield per annum is estimated at about 5.5 per cent and the portfolio gross income yield per annum is estimated at about 6.4 per cent. The Dublin OEIC’s range of funds are aimed at investors seeking greater portfolio diversification. The New Star Euro High Yield is only authorised for distribution by the Financial Regulator in Ireland and an annual 1.25 per cent management charge will be levied.

Meanwhile, New Star Asset Management plans to list on the Alternative Investment Market of the London Stock Exchange in November, according to a statement from the group. The move is expected to be very lucrative for all of the asset manger’s 280 staff, with the minimum windfall expected to be at least £45,000 ($79,500). At least 50 senior members of staff stand to make more than £1 million from the initial public offering. The fund manager, launched by John Duffield five years ago, plans to sell approximately 5 per cent of the shares beneficially owned by the employees and directors, which represents around 3 per cent of New Star's capital. Mr Duffield owns 17 per cent of shares in New Star. The initial public offering is expected to value New Star in excess of £600 million.

Independent asset manager Henderson Global Investors, has launched an Asia-Pacific property equities fund to be managed by Chris Reilly, and based in Singapore. The fund will target long-term capital appreciation by investing in quoted equities which derive the main part of their revenue from the ownership, management and/or development of real estate, throughout the Asia Pacific region.

The fund will be denominated in US dollars and its benchmark will be the FTSE EPRA/NAREIT Asia total return net dividend index. It will be tailored to exclude stocks that derive more than 40 per cent of their earnings outside Asia and to cap the weight of any stock at 7.5 per cent. There will be no preference for yield or growth in its selection process, but the fund will appeal to investors with a total return requirement, rather than those needing regular and predictable income.

The French Parliament has given the green light to a new type of packaged property product for the home market that will boost the country’s €1200 billion fund management industry. Organismes de Placement Collectif Immobilier, are mutual real estate funds, similar to German open-ended real estate funds. The French Asset Management Association had been pressing the French government to introduce the new structure for some time and has welcomed the announcement as the new structures add an element of diversification that both retail and institutional investors have been looking for.

Fortis is creating a new multi-manager funds group called Fortis Multi-Management. The new unit will be launched in the New Year with combined assets of €6 billion ($7.1 billion). The move is designed to combine all the group’s existing multi-manager elements of its business, notably those of the MeesPierson private banking arm and the retail funds business of Fortis Investments. The new unit will include traditional long-only funds of funds, funds of hedge funds and funds of private equity funds.

Two mutual funds, which give investors access to hedge fund-like strategies and returns, along with the liquidity and lower fees of mutual funds, have been launched by Rydex Investments, a US fund management firm. This is one of only a handful of so-called hybrid funds that offer institutional strategies and equity-like returns but with less risk. Rydex only uses quantitative strategies and is offering a long/short and an absolute return strategies fund - a composite of different hedge fund strategies. Fees will be less than two per cent, and the minimum investment will be $2,500.

Finles, a Dutch investment company, is launching a multi-manager fund, the Finles Star Selector Fund. The fund, which will have a more aggressive return target than most fund-of-hedge-funds, will be launched in January 2006. The new fund will invest in approximately 15 single manager hedge funds. Rather than entry, exit and management fees, there will be a 20 per cent performance fee. All the underlying single manager hedge funds have a return target of over 20 per cent.

The fund will be multi-strategy, with the emphasis on global macro, long/short equity, CTA, event-driven and special situation managers. Finles are targeting the 600 smaller pension funds in the Netherlands, high net worth individuals, charities and third-party marketers and has an ambitious target to increase its assets under management ten-fold to €2 billion.

Hedge Funds

October will be the worst month in its history for hedge funds, according to Roger Guy and Guillaume Rambourg, co-managers of Gartmore’s $1.5 billion AlphaGen Capella hedge fund. They told investors in a recent letter that the six-year-old fund was down 3.5 per cent for the first three weeks of the month, a sign that other hedge funds will be down by a similar or even larger amount, according to commentators. The fund, was up 11.5 per cent for the first nine months of 2005 and has returned 19 per cent a year since 1999. It has only suffered four down months in six years, according to the firm, which is confident that any losses will be made good. Many hedge funds have uncovered long positions in energy and utility stocks, sectors which have experienced sharp corrections this month.

Mizuho Corporate Bank, a unit of Japan's second-biggest lender Mizuho Financial Group, has set up two hedge fund companies in the US and the UK.Mizuho is believed to be the first Japanese bank to set up its own hedge fund. The companies aim to have assets under management of around Y100 billion ($87 million) in three to four years time. They will target annual returns of 12-15 per cent, according to the report. The US firm is a wholly-owned unit based in New York whilst the Mizuho Corporate Bank will not contribute capital to the London-based entity but will share a portion of profits. The two firms will soon begin accepting funds from high net worth and institutional investors.

Citigroup Private Bank has launched a platform for wealth management and private banking clients in Asia to invest in single-strategy hedge funds. HedgeForum gives investors a small selection of single-strategy hedge funds, which have the Citigroup Alternative Investments seal of approval having passed its due diligence requirements. To date, 12 hedge funds have been added to the platform, four more will be included within the month. Citigroup are planning for the platform to offer around 20 to 30 hedge funds eventually. The minimum entry level for participation in HedgeForum has been set at $250,000 excluding fees. The platform, which was launched in May, but is only now offered to Asian clients, presently has a total investment capacity of $2.1 billion.

King & Shaxson, a London-based investment management firm, has launched the King & Shaxson Premier fund, a UK equity hedge fund targeted at high net worth investors and institutions. The fund is managed by Alan Brunsden and employs a long/short strategy with a fundamental bias. The minimum investment is £100,000 ($180,000) with management charges of 1.5 per cent and a performance fee of 20 per cent. The fund, which is domiciled in the Cayman Islands and listed on the Irish Stock Exchange, is the first in a series of new initiatives the company has planned.