For those people who believe that everything is relative, Invesco Asia has scored a massive success. Its 360° Strategic Guaranteed Segregated Portfolio - Hong Kong's first guaranteed fund of hedge funds - raised over $27 million from Hong Kong investors during the offer period which closed on May 30. Given the high costs of establishing retail hedge fund products and registering them with the Securities and Futures Commission, this is a modest amount. Certainly it pales in comparison to the hundreds of millions of dollars that a well-marketed guaranteed mutual fund can pull.

But only the churlish would deny Invesco its due. In February the firm had made its minimum target $20 million. No one has expected retail hedge fund sales to be large. The late March launch coincided with the outbreak of Sars in Hong Kong, not to mention took place across a series of short holiday weeks.

Moreover, the strategy of employing a principal guarantee seems to have worked. The four other authorized products - single strategy and fund of hedge funds - have raised even smaller amounts.

Indeed, looking at the March fund flow numbers of the Hong Kong Investment Funds Association, Invesco may be turning the tide. According to the HKIFA, gross hedge fund retail sales in March were a paltry $11.3 million, representing a net redemption of -$1.3 million. The April numbers are not yet available but Invesco will certainly return the retail hedge fund story to the black.

"$27m of assets raised for a new product initiative is not only evident to the fact that local distributors are ready for more sophisticated investment concepts, but shows also that the investing public is excited to explore innovative products," says Edith Ngan, Hong Kong CEO. "In addition, we can tell from this exercise that local investors do have an appetite for hedge fund-related products. Marrying this concept to a guaranteed fund proved well received."

The fund was distributed through banks, including Citibank, ABN Amro, Dah Seng and Citic Ka Wah, as well as through IFAs.

The underlying authorised fund, the Invesco Absolute Return Master Fund, currently has no other products feeding into it, although Invesco says it is considering various ideas and product initiatives.