Thursday, 31 July 2014
Last updated 2 hours ago
Jun 14 2013 | 11:31am ET
Algebris Investments is set to launch a long-only financials fund with more than US$100 million in commitments.
The London-based hedge fund will roll out the fund in August with a formal launch in September. The vehicle—which will charge only 0.9% in annual fees—will invest in high-dividend stocks and high-yielding bonds, with the aim of distributing about 7% per year to investors in quarterly payouts.
The fund will seek a further 3% per year in capital appreciation.
"It is the right time to invest in financials," Algebris founder Davide Serra, who met with British government officials this week to discuss the future of the Royal Bank of Scotland, told the Financial Times. "The crisis is over. Financials are going to be the key beneficiaries of raising rates in the next three to five years, which will make their margins expand."
"We are now, imagine, looking at a bottle of water," Serra added. "It was half-full. But after years of building capital, cutting costs, degearing and shedding non-core assets, it's now full. And the water keeps on pouring in—it's going to be running down the sides and that is the dividends we'll be aiming to pick up."
Algebris has already more than US$100 million in commitments for the fund during initial marketing discussions last week. Early investors will pay only 0.5% in fees, as will big investors—those who put in more than US$50 million.
Algebris' two hedge funds focus on financials, and both have posted big gains in recent years. Its flagship credit fund is up 5% this year after a 56% jump last year, while its stock fund is up 30% this year.
Jul 8 2014 | 10:48am ET
The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…