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Canadian Hedge Funds Move Into New Fields

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TORONTO (–National Life, a Canadian insurance company, recently introduced two hedge funds of funds designed for retail investors, describing them as a potential conduit for general investors to access hedge funds.

Canada has other retail hedge funds, but National Life’s Multi-Strategies funds come with a 75% principal guarantee as well as a low minimum investment, C$1000 (US$659).

The two funds under this umbrella have different managers. Montreal-based Norshield Financial Group is responsible for Multi-Strategies (Univest) fund. It promises to beat traditional investment returns while keeping risk below that of a typical Canadian bond index.

The other Multi-Strategies fund is run by Global Asset Management, part of UBS AG, and targets absolute returns with low volatility and long-term capital appreciation. These hedge vehicles are part of National Life’s segregated funds, meaning they are separate from insurance products.

In addition to this new joint venture, Norshield also announced that it has taken over the First Horizon Bank in Barbados and a group of funds previously managed by Horizon Group. Horizon, however, expects to stay in the hedge fund business, continue to manage the Horizon Mondiale fund and possibly launch new products.

Another Canadian hedge fund manager took a different tack, establishing a European presence. Toronto-based Leeward listed its Bull and Bear fund on the Irish Stock Exchange, in order to fulfill the requirements of European institutional investors. The firm, apparently the first Canadian manager to get an ISE listing, plans to open an office in Europe.

The vehicle is the offshore version of a long/short North American equity fund for Canadians. Leeward President and Chief Investment Officer Brendan Kyne predicts a rough market in 2003 and accordingly has strong positions in gold and natural gas.

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