U.K. Firms Join Forces To Launch Liquid Hedge Fund

Oct 26 2009 | 7:49am ET

Aramid Asset Management and Thomas Funds have joined forces to launch a long/short hedge fund.

According to Sean Flanagan, co-founder of Aramid Asset Management, the new vehicle, the Aramid All Asset Capital Preservation Fund, offers liquidity, full transparency and two levels of capital protection.

"We believe this is the first fund of this type to be launched in the U.K. market,” Flanagan. “The fund has been almost a year in development and has been driven investor demand for a new alternative to capital protection.”
  
"Our approach to asset allocation is based on the ratio of expected drawdown risk versus expected gain,” said Thomas Funds’ Glen Cremer, CIO of the new vehicle. “Our first step is to set up a target for maximum loss we can tolerate in the next 30 to 60 days on which we base our allocation to each asset class and the level of hedges. We do not believe in the argument that asset classes are uncorrelated – we assume during times of risk aversion all risky assets tend to fall together and so we hedge each asset class. We also hedge at all times – market timing is almost impossible to achieve.”
 
The Aramid All Asset Capital Preservation Fund has been set up as a master-feeder structure and institutional and funds of hedge fund investors can access it via a Cayman Islands feeder fund. This will be an open end exempted company incorporated in the Cayman Islands which will offer investors liquidity and a SIPPs Share Class.
 
Aramid is also launching another feeder product aimed at the retail investor – the Aramid All Asset Capital Preservation Fund Limited, which has been set up as closed-ended fund established in Jersey as an unregulated exchange-traded fund. The fund will close on at the end of November.


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