JERSEY, The Channel Islands (HedgeWorld.com)--Liberty Ermitage Group plans to offer a new hedge fund of funds that will invest in hedge funds and in the companies that manage them.
Called the Strategic Partners Fund, the fund will be seeded with US$50 million and is designed to profit from both investment returns and from the equity participation in hedge fund firms. The fund will invest in European hedge fund managers primarily. It is designed for institutional investors with a minimum investment of US$10 million.
Liberty also is offering increased transparency and guaranteed capacity. The transparency will be offered at both the fund and business levels, meaning Liberty will be negotiating with managers for greater access to portfolios and fund operations. Liberty also will require that fund managers offer unlimited capacity for investors in the fund.
Investors in the fund will be invited to discuss the underlying hedge funds in a monthly forum to help keep them apprised of their dual-focused investment. "Investors will in effect 'double dip' into future revenue streams, as they will receive returns from the underlying hedge fund strategies and share in the dividends received from the economic participation in the hedge fund management partnerships," said Director Jonathan Wauton, in a company statement.
Even though some in the industry have predicted that hundreds of hedge fund managers are going to fail in coming months, Liberty's executives believe that now is an ideal time to be seeding new managers. Liberty spent more than a year studying how to structure and offer the fund, according to the company statement.
The fund is slated to open for investment Dec. 1 running through March 31, with the first subscription period set for Feb. 10, the statement said. The fund charges a 1.5% management fee and an incentive fee based on 25% of the equity participation.
Liberty Ermitage Group manages US$900 million in hedge funds and US$2.3 billion overall. The manager is owned by Liberty Group, a South African life insurance company.