HAMILTON, Bermuda (HedgeWorld.com)–Butterfield Asset Management Ltd. is offering its first hedge funds of funds to its pension and high-net-worth client base through its Butterfield Select Fund, a three-year old umbrella fund.
The alternative class is being sub-advised by International Asset Management, a London-based firm that specializes in alternative asset management. The new investment class, comprised of a number of hedge funds, is intended to provide diversification and reduce the risk level of a traditional portfolio, according to officials.
The Butterfield Select Fund totals US$107 million of which US$20 million is in the alternative class. The offshore fund is domiciled in Bermuda and was launched as an investment solution to small companies that needed to offer their employees pension funds per Bermuda law.
According to Ian Coulman, managing director at Butterfield Asset Management, the new fund wouldn’t necessarily be for most institutional investors that would likely invest in individual hedge funds on their own. The low investment minimum of US$10,000 is also a selling point to smaller, individual investors.
The partnership with IAM allows investor access to managers who may have already closed to new investment, Mr. Coulman said. He added that Butterfield didn’t have the resources or expertise to research and invest in hedge funds.
Administered by Butterfield Fund Services, an affiliate of Butterfield Asset Management, the new investment class carries a management fee of 1.25%, which is higher than the fees for the equity and fixed-income portions of the umbrella fund that charge 0.875%.