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Shares in Man AHL Guaranteed Futures 2 Ltd will be distributed through 19 local firms, in the hope that it will raise assets in excess of the $52 million raised for the first version. Mimicking the first offering, the minimum investment will be $5,000. There are monthly redemptions, the management fee is 3%, and the performance fee is 20%.
The fund has a five-year fixed tenor and is authorized in Hong Kong as a futures and options fund; the only one of its kind bearing a guarantee feature. It is not therefore treated as a hedge fund for regulatory purposes.
Tim Wong and his London-based team will manage the product. The same team is primarily responsible for Man AHL Diversified Futures, which currently runs $18.8 billion. The difference between this pair of retail products and Man AHL Diversified Futures is the existence of a capital guarantee courtesy of HSBC. The level of that guarantee starts at 90% of capital, rising to 100% as profits are retained. At that point the guaranteeÆs contingent liabilities are capped.
ôWe want people to see this as more a vehicle for capital appreciation rather than capital protection,ö says Giselle Lee, head of sales at Man in Hong Kong. ôThatÆs why we cap the guarantee at 100% of capital.ö
The fund will operate in more than 100 global financial markets, concentrating in currency, bonds, energy and equities respectively. The target return of the new fund is 12-15% net of fees.
In its first six months, the first product made 7.33% net. The returns will correlate with those of the general Man AHL Diversified Futures Fund, which in the last 12 months has returned just 0.5%. This was attributed to a poor performance in the middle of 2006.
These particular futures and options funds are conceptualised in such a way that they donÆt like sudden sharp changes in volatility. They are trend-followers rather than pacesetters. Therefore, these funds have a distinct tendency to sulk and under-perform if confronted with the volatility that was experienced in summer 2006.
AHL is a division of Man Investments, which has global assets under management of over $60 billion through its core investment managers AHL, Glenwood, Man Global Strategies and RMF. Approximately 40% of ManÆs AUM is estimated to be sourced from the Asia-Pacific region.
In Hong Kong, the firm now has a new head honcho in the form of Tim Rainsford. He transferred recently from Man Australia, where he had been the head of institutional sales. He took over at the helm from Matt Dillon, who had been something of a local celebrity given his involvement with the Man Booker literary festival in Hong Kong and his ownership of a modern art gallery in Wyndham Street. Dillon has gravitated up the Man hierarchy and is now based in Switzerland.
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