LONDON (HedgeWorld.com)–Shares of the third fund of funds from Dexion Capital plc have begun trading on the London Stock Exchange.
The closed-ended fund, Dexion Trading Ltd. (LSE: DTL) closed its first day, Nov. 29, up a penny, to ?1.01, on volume of 181,451.
The week before, Dexion Trading’s initial public offering raised ?83 million (US$157 million), leading Nick Brown, the director of Dexion Capital to say that the company was very pleased. “A trading portfolio complements our other managed products and enables investors to further diversify their sources of return,” he said.
The investment adviser for Dexion Trading will be FRM Investment Management Ltd., Guernsey. FRM manages the broadly similar fund Absolute Alpha Opportunistic Funds, which since April 2001 has returned to its investors 29.23% (sterling class) and exhibited long-term volatility of around 3.5%. Dexion noted in a statement last week that Absolute Alpha has outperformed the MSCI world TR index (US$) as well as the FTSE all share index since June 2002. Dexion Trading and Absolute Alpha are expected to have a 60% or more overlap in managers.
The company’s objective with the new fund is to target U.S.-dollar annualized returns of between 7% to 12% (net of all fees) and an annualized volatility of less than 9% over any three- to five-year period, with little or no correlation to traditional equity benchmarks (see ).
Hoare Govett Ltd., London, sponsored the Dexion Trading IPO. Hoare Govett is a member of the ABN AMRO group.
“This issue brings the amount of money raised by ABN AMRO and Dexion Capital to over ?400 million, which is a clear endorsement of the listed closed-end structure and confirmation of investor demand for institutional quality fund of hedge fund groups,” said Bob Cowdell, managing director of ABN AMRO, in a statement.
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