New Fund Of Funds Blends Hedge, Long Only Strategies

Feb 20 2007 | 1:27pm ET

Paris-based Edmond De Rothschild Multi Management recently launched a fund of funds that blends long-only strategies with underlying long/short and event-driven hedge funds.

The new vehicle, the Multi Alternatif Equity fund, is currently 60% invested in European bonds, with between 40% and 60% in hedge funds, depending on the offensive or defensive stance taken by managers, according to the firm.

“The way in which these two universes complement each other is optimized by their integrated management within Multi Alternatif Equity,” stated Pierre Palasi, chairman of the executive board of Edmond de Rothschild. “The managers can select the best strategy through which to invest in a theme, a country or a sector, choose the best manager in the two investment universes or even use the information generated by the alternative to benefit the ‘long only’ management.”

The fund, which offers weekly liquidity without notice or redemption penalties, aims to mimic stock performance over the full market cycle but with 40% less volatility than the Eurostoxx 50. The fund’s portfolio managers are Michel Saugné, a specialized hedge fund manager, and Bernard Aybran, head of the EdRMM diversified management team.

The new offering’s I shares charge management fees of 1.15% and its C shares 2%. Its performance fee is 10% of performance above 7%, which is applicable to both share classes. The minimum investment requirement is €50,000 for I shares and €10,000 for C shares.


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