NEW YORK (HedgeWorld.com)– After a year of preparation, London-based Man Group plc* is on the verge of offering investment products in Canada and the United States. The world’s largest hedge fund business, with US$21 billion in assets, is applying to North America a model it successfully implemented in other parts of the world.
A key component of this approach is the training and support of a wide network of independent distributors who in turn educate individuals about structured notes and other investment options.
After thoroughly engineering the products, said John Kelly, the Man executive who spent the past 12 months developing the firm’s organization in North America, “We focus on making sure they are sold properly.” In particular, high-net-worth investors get information on what hedge fund and futures products can deliver and the diversifying role these play in a portfolio.
Every investor is emphatically told that a draw down will happen at some point, Mr. Kelly explained. That makes it easier for the person to stay with the investment through turbulent times. These funds and structured notes are long-term investments, not appropriate for someone who’s looking to put in money for just a year, for instance.
The firm has an established client base in Europe, Asia and the Middle East. Each offshore office supports a diverse set of distributors that can include large banks and brokers as well as independent financial advisers. Some of these may have no experience with alternative investments.
Mr. Kelly refers to a carmaker and its dealers in explaining this model. The dealers need not know the details of how the products are manufactured, but they do learn all about the features that are of interest to the customer. Besides providing training and support for the network, the regional Man staff sells directly to institutions in the country and in time may also arrange customized products for that market.
Strategic Alliance Approach