Black Card To Launch Hybrid P.E. Vehicle, Earmarks 20% For Hedge Fund

Sep 22 2006 | 5:20pm ET

Black Card Global Investment is set to launch a hybrid private equity and venture capital fund on Oct. 1, with a 20% allocation to a New York hedge fund to complete the alternative trifecta.

The Mauritius-based firm, which specializes in commercial property investments and brokerage, is set to roll out the Private Equity Mortgage Fund with $15 million in assets. It will provide financing for private international home buyers and project finance for small- to medium-sized residential and commercial developers.

So far, according to the fund’s Dubai-based manager, Adam Antoszewski, “the amount of interest we have generated has really been phenomenal.”

According to the fund’s prospectus, PEMF is targeting about a 25% annual return, which Antoszewski called “very feasible” and “based on a mathematical formula which will stack up in reality.”

“We’re talking about a product that is essentially fixed-interest,” he says. Half of the fund’s assets will be used for mortgage finance, targeting a 6.75% return. Another 30% will be put into project finance activities, for which the fund receives a 20% equity position and profit share on top of the lending rate.

Both the p.e. and VC segments will be focused on emerging property markets, especially China, the United Arab Emirates, Egypt, India and Turkey, but may also invest in North America and Western Europe. Finally, one-fifth of the fund will be invested in a New York-based hedge fund, which he declines to name.

“It’s not speculative, it’s plain and simple mathematics,” Antoszewski says.

“You load all that in and you come up with an exact return that is predetermined,” in this case, 24.98%.

So far, Antoszewski says, the new fund has attracted assets from high-net worth investors in Taiwan, Shanghai and the U.S., as well as interest from a hedge fund and other institutional clients.

“We’re looking at Scandinavian property groups, specifically architecture firms who have investors lined up and who are looking for an alternative real-estate invest-ment . . . So it’s a combination of institutional and private money.”

So far, with $15 million, PEMF has attracted 10% of its target asset level. “Going by the amount of investment interest we have, it is very feasible that we will get to $150 million 12 months from now,” Antoszewski says, after which the fund will close.

The fund charges 5% off the top to enter the fund and 1.5% in annual management fees. There is a 2-year lockup period, after which investors can withdraw funds with three months notice. Early withdrawals are subject to a 30% redemption fee. The minimum investment is $1 million.

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