Global Vision Investments has revised the planned launch date of its $30 million DynamiteF3 flagship fund to December. The newly-formed Cayman Islands-based investment advisor had originally planned to launch its fund-of-funds-of-hedge-funds offering in May.
The firm’s partners, Jürg Bühler and Steven Butlin, explained that the delay is in order to help investors understand more clearly the benefits of fund-of-fund-of-funds. “Many investors are concerned about the three levels of fees and the impact of diversification on performance,” said Butlin. “However, with DynamiteF3, we have created an investment product that addresses both of these concerns.”
According to Butlin, DynamiteF3 is not a pure fund-of-funds-of-hedge-funds offering, since up to 40% of its portfolio is invested directly in either single-manager funds. And while DynamiteF3 charges fees of 1% for management and 10% for performance, in addition to the fees charged by its underlying funds, the partners said they have negotiated lower terms and rebates with their underlying managers and in doing so are able to pass the savings onto their investors. “By doing this, our goal is to produce a fee structure similar to investing in a fund of hedge funds,” Bühler said.
Unlike other fund-of-funds-of-funds, which seek to generate bond style returns, DynamiteF3 has been designed to produce returns similar to funds of funds but with less exposure to manager-specific and strategy risks, Butlin explains. By combining niche fund-of-hedge-funds, with different investment styles, geographical and strategy focus, the partners believe that they can generate additional alpha. “We believe that this is an excellent product for investors who want to have an exposure to the hedge fund market but who are concerned about the risk of blowups,” said Bühler.
But it remains to be seen how much investors demand this additional level of protection.