LONDON (HedgeWorld.com)–Schroders plc launched its third hedge fund of funds, an aggressive multi-strategy fund called Schroders’ Alternative Investment Fund Blue Mountain.
The managers of the fund are aiming for annual returns of 10% to 15% with volatility of about 7% to 10%, which is a higher risk profile than its two existing funds, said Toby Joll, executive director for Schroder & Co. Ltd. And by combining the new fund with Schroders two other funds, firm executives believe that investors can tailor their risk and return objectives to their particular needs.
Blue Mountain, opening to new investors on May 19, will be concentrated in eight to 12 hedge funds and will launch with US$10 million to US$12 million. The fund will emphasize directional strategies more than Schroders’ other hedge funds of funds, he said. John Parkin oversees a team of nine people in the hedge funds of funds group, which has “grown quite a bit this year,” Mr. Joll said.
Like its existing funds, Blue Mountain will charge a 1% annual management fee and 10% of profits with a high watermark.
Schroders other two funds of funds were launched in November of 2000. The Schroders’ Blue Sea fund is relatively conservative, aiming to be a risk diversifier with relative value strategies that should return 6% to 9% per year, Mr. Joll said. The US$160 million fund has performed well, but perhaps has not been as aggressive as it could have been, he said.
Schroders’ Blue Star fund is a long/short equity hedge fund of funds designed as a moderately aggressive substitute for long equity exposure, Mr. Joll said. Returns should be comparable to global equities, but with less correlation and volatility in the US$50 million fund.