WILMINGTON, Del. (HedgeWorld.com)–Wilmington Trust is planning to sell a public Securities and Exchange Commission-registered hedge fund, the Wilmington Low Volatility Fund of Funds.
The multi-strategy hedge fund will be managed by Wilmington unit Rodney Square Management Corp. and subadvised by fund of funds firm Guidance Capital LLC, Chicago. Guidance recently was named sub-adviser of four planned registered funds in the works at the firm Aspen Strategic Alliance, Atlanta .
Wilmington officials declined to comment on the fund because of registration rules.
As the fund’s name implies, the managers will seek out consistent long-term returns with low volatility, investing in a broad range of hedge fund strategies spread among 15 to 20 different hedge funds, according to the SEC filing on the fund. Included strategies are: convertible arbitrage; fixed-income arbitrage; managed futures; merger arbitrage; what the filing calls balanced long/short equities; distressed securities; private placements; capital structure arbitrage; index arbitrage; special situations; and volatility arbitrage, according to the filing.
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Management fees paid by the fund to Rodney Square and Guidance amount to 1% of assets plus an incentive fee of 10% of returns over a hurdle rate set by a rolling 12-month geometric average of three-month U.S. Treasury bill rates. Rodney Square and Guidance have agreed to waive a portion of management fees in order to keep fund annual expenses capped at 2% of assets until December 2014, with Guidance waiving a maximum of 50 basis points, its total fee on the fund, the filing states.