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Portfolio > Alternative Investments > Hedge Funds

Arrow Hedge Launches Third Series of Notes

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TORONTO (–Arrow Hedge Partners Inc. launched the Arrow Multi-Strategy Notes, Series 3, after raising C$40 million (US$31 million) in the first two series of notes last year.

The latest series will be open to investors from Jan. 12 through March 19 and, like its predecessors, will offer a guaranteed principal repayment at maturity plus any appreciation in the value of the fund. The notes themselves are issued by BNP Paribas (Canada) and guaranteed by BNP Paribas SA. Arrow Hedge manages the underlying fund assets.

“We’ve had a lot of demand for our third series of notes. There is a pretty good chance we can raise as much as we did in the first and second series,” said Mark Purdy, managing director at Arrow Hedge Partners.

The low investment minimum of C$5,000 is attracting many investors, as is the idea that they can use the vehicle for their retirement accounts. The first two series of notes have had positive performance since their respective June and October launches.

The notes’ performance is linked to the Arrow Multi-Strategy Hedge Fund, which has an annual absolute return objective of 7% to 9% net of fees. The fund invests in 20 to 25 hedge fund managers across nine investment strategies.

Including the notes, Arrow Hedge now has C$200 million (US$156 million) in assets under management. Jim McGovern, managing director and chief executive officer at the firm, said that officials there are preparing for asset growth in 2004.

Officials announced this week that the Arrow Epic Capital Fund would return some capital back to investors on Jan. 31. That fund was closed to new investors last August. The motivation behind the capital distribution was to “limit the size of the pool capital to a pre-determined maximum level” to allow the firm to maximize the risk-adjusted returns generated by the fund, Mr. McGovern said in a statement.

The Epic Capital fund is advised by Epic Capital Management Inc., Toronto. The Arrow Epic fund is only available to investors now through the Arrow Multi-Strategy Notes, Series 3.

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