TORONTO (HedgeWorld.com)–BluMont Capital Corp. launched a multi-manager, multi-strategy principal guaranteed hedge fund, BluMont Man Multi-Strategy Notes.
The notes are an extension of BluMont’s relationship with Man Investments,* London, which will manage the hedge fund portfolio in the notes using its Man Multi-Strategy Guaranteed Ltd. fund as the model. Man also helps manage the BluMont Man-IP 220 Series 1 and Series 2 notes, which together raised C$146.4 million (US$108.9 million) in assets this year .
BluMont is aiming for double-digit returns with volatility that is less than the equity markets for the ten-and-a-half year notes. The investments in the note fall into five categories: futures management, arbitrage, funds of funds, equity hedge and long/short equities.
Principal repayment is guaranteed by Citibank Canada through a swap agreement. The notes are leveraged, with each C$100 invested resulting in C$150 of investment.
A management and risk-transfer fee of 1% a year is charged on the Bermuda-domiciled notes, while Citibank will be paid 50 basis points a year for providing the swap that allows the principal guarantee to be put into place, according to the offering document.
The sales charge to buy into the notes is 5.5%, according to the offering document. Selling agents on the notes are: Citibank Canada, CIBC World Markets Inc., RBC Capital Markets, BMO Nesbitt Burns Inc., National Bank Financial Inc., TD Securities Inc., Desjardins Securities Inc., HSBC Securities (Canada) Inc., Canaccord Capital Corp., Dundee Securities Corp., First Associates Investments Inc. and Raymond James Ltd.
BluMont Capital Corp. is a unit of publicly traded BluMont Capital Inc., which is 46.1% owned by Integrated Asset Management Corp., a publicly traded Toronto investment firm. BluMont managed C$375 million (US$279 million) as of Aug. 31. Man Group plc manages more than US$30 billion in alternative assets.
*Man Group plc is a minority investor in HedgeWorld.