Trowbridge Targets Illiquid HNWs For New Fund

Feb 5 2007 | 4:10pm ET

There’s a new commodity futures fund out there for high net-worth individuals with cash locked into illiquid investments. Grosse Pointe Park, Mich.–based Trowbridge Management has launched the Trowbridge Global Fund, a managed futures fund that invests exclusively in Welton Investment Corp.’s Global Directional Portfolio program, a systematic diversified strategy.

The Global Fund, which launched last September, serves as a diversifier from other illiquid investments made by high net-worth individuals, according to Stan Dickson, president of Trowbridge Management. “There is a need out there for illiquid investors to make investments in the commodities market whereby they could use their illiquid assets as collateral or borrow credit at a 2% interest rate,” he told FINalternatives.

The fund’s most notable feature is a tax efficient funding structure that Dickson says is well-suited to high-net-worth investors with assets that carry burdensome tax consequences if divested.

“Trowbridge can offer referrals to banks capable of issuing letters of credit against assets like real estate, investment portfolios, and company balance sheets, among others. Trowbridge will then accept these letters of credit for fund access into the Global Fund program. Investors have the potential to utilize their otherwise illiquid assets to generate incremental, tax efficient yields.”

The firm will also make loans to investors at an annual 2% interest rate for investments into the new offering.

Dickson said he selected Welton’s GDP program “to have a low correlation to equities and equity-based hedge funds, and has the stability of a multi-manager pool.” 

Welton's global futures program returned 16.4% to investors last year, outpacing the Barclay Group’s Hedge Fund Index (12.35%), Hennessee Group’s Index (11.36%), the Dow Jones Industrials Average (16.29%), and the S&P 500 (13.62%).

GDP trades global futures markets including the currency, commodity, interest rate and stock index sectors. It employs proprietary systematic trading models in three directional trading sub-styles that draw on a variety of statistical, technical and fundamental market data. The program managed some $171 million as of the end of December.

The Trowbridge Global Fund charges fees of 0/20 with a $250,000 minimum investment requirement.

Carmel, Calif.-based Welton provides investment management services for institutions, banks, fund of funds, and family offices and is managing approximately $216 million in total assets.

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