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Man Launches Fund for Tax-Exempt U.S. Investors

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NEW YORK (–Man Group plc* is starting to distribute an unusual product, a registered fund of funds designed to fit individual retirement accounts as well as employee benefit plans, pensions, foundations and endowments.

Man-Glenwood Lexington TEI LLC is especially structured to eliminate unrelated business taxable income, which generates taxes for investors that otherwise are tax-exempt or have tax-deferred status. Being available for a minimum investment of US$25,000, TEI potentially is within reach of IRAs, as long as the account holder is a qualified investor.

While the vehicle has a novel structure for tax purposes, its underlying portfolio is a fund of funds with a 10-year track record. Man Group chief executive Stanley Fink said in a statement that Man-Glenwood Lexington, a registered fund launched last year and based on the same portfolio, attracted interest from tax-exempt and tax-deferred investors–hence the TEI version to meet their tax requirements.

TEI previously was registered with the Securities and Exchange Commission (see Previous HedgeWorld Story). It will be distributed by Man Investments Inc., a U.S. subsidiary of the Man Group, through intermediaries.

Man had US$38 billion in total assets as of March 25. Headquartered in London, it has an investment arm in Chicago, Glenwood Capital Investments, which is responsible for managing US$5 billion in hedge fund assets. Another part of the company runs a hedge fund incubator investment operation out of New York.

*Man Group plc is a minority investor in HedgeWorld.

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