LONDON (HedgeWorld.com)–INVESCO launched its first offshore hedge fund, the INVESCO Absolute Return Fund.
The fund will rely on strategies developed in its structured products division in New York, which began offering hedge fund-like strategies earlier this year. The fund combines a bottom-up long/short U.S. equity market-neutral approach with a top-down futures strategy in U.S. stocks and bonds, according to an INVESCO statement.
INVESCO will use a team approach for managing the fund, which is targeted to achieve annual returns of about 10% after fees, with annual volatility of 8%. The Dublin-domiciled fund will charge 1.5% annually for Class A shares and 1% annually for Class C shares, which are for institutional investors.
A performance fee of 15% is charged after a hurdle rate based on the rate for 30-day U.S. Treasury bills is achieved. A sales charge of up to 3% will be charged to the Class A shares, while Class C investors pay no sales fee. A redemption fee of 2% is charged and paid to the fund within six months of investment, and 1% is charged within the first 12 months.
The fund will be priced weekly, available for purchase two times a month, and open to redemptions monthly. Shares can be purchased in U.S. dollars or euros with a minimum investment of 125,000 euro or the equivalent.
Morgan Stanley & Co. is prime broker, and PFPC International is the administrator.
Brett Bastin, head of product development for absolute return strategies, said in a statement that the current market conditions favor the new fund, which offers risk adjusted absolute returns and low correlation to traditional assets. INVESCO’s structured product group currently managers US$1.5 billion in absolute return strategies.
INVESCO will sell the fund in all markets already served by the firm and where regulations allow it, the statement said.