Man Investments, formerly known as Man Investment Products, has closed the launch of the Man Multi-Strategy Series 5, according to industry sources. The fund is Man's first in the multi-strategy category to carry both income and capital bonds.
The income bond carries a coupon, which pays 2% annually for the first four years, while the capital bond gives the investor no coupon but higher target returns. The income bonds will target annualised returns of around 14% with an annualised volatility of around 9%, while the capital bond will aim for 17% return a year with a target volatility of 12%. There are no front end fees although there is a redemption penalty of 4% if redeemed before May 2005, falling by 1% each year to no penalty after the start of June 2009. An investment team based in London and Chicago will manage the fund, which is not listed on an exchange.
Globally the fund raised $725 million, a record for the firm. The fund will invest in a range of different strategy hedge funds, with a 100% capital guarantee after 12 years. The amount raised through the group's Hong Kong office in Asia is also reported to be a record, although a detailed breakdown of the figures is unavailable.
The fund, like other Man products, was primarily aimed at private clients and was distributed through retail channels catering for high-net worth individuals, direct institutional sales and joint venture/private label business. The minimum investment for the fund is $50,000.
The previous record an individual fund launch was with the Man-IP 220 Series 4, which was launched in October 2002 and raised $670 million globally.
The strong demand for this fund shows the continued appetite in Asia and elsewhere for alternative investments. In Hong Kong, Man has one authorised managed futures fund, the AHL Diversified Futures, and is looking to introduce a second authorised fund some time in September.
This fund will be submitted under the hedge fund guidelines. The September target is later than originally planned due to the clarification needed in the authorisation requirements, something currently being pursued by industry players with the SFC.
Man's next planned global product launch will be the Man AP Unison Series 1, which will be open for investment on 5 May. This product will target medium-term annualised growth of around 14-16% for an annualised volatility of around 8-10% for both USD and EUR class bonds.