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April 08, 2005 at 08:00 PM
BRISBANE, Australia (HedgeWorld.com)–The terms of HFA Asset Management’s “Octane” series might sound a little risky, but while it does employ leverage it also carries capital protection.
The HFA Octane Series 2 opened March 21 with an offering period that lasts through June 10. The closed-end unlisted unit trust already has been given an investment grade rating by Standard & Poor’s, evaluated the underlying fund of funds managed by Lighthouse Partners LLC, Palm Beach, Fla.
The Lighthouse Partners portfolio, the LHP Fund, is a portfolio of 62 hedge funds that invest across 11 broad hedge fund strategies. The US$4 billion firm uses sophisticated proprietary financial modeling tools in the management of portfolio risk.
“We concur that a grouping of hedge fund strategies based on performance behavior characteristics is desirable,” said Greg Hogan, S&P fund analyst, in a statement. “We believe that retail investors deserve clear classifications–even if stylized–giving them useful summary information when they are contemplating investment in a portfolio of hedge funds.”
S&P’s classification system is based on returns and risk relative to a traditional long-only investment portfolio. LHP has a 54% focus on risk reductions and 36% focus on return enhancement, according to S&P’s analysis of the fund’s returns, risk and correlations in comparison to a traditional portfolio.
HFA’s survey of Australian retail investors last fall showed that there was keen interest in absolute return strategies. According to HFA’s marketing documents, investors who are remitting directly–through self-managed superannuation funds or via a portfolio service–and/or have a medium-term investment horizon are well suited to the Octane Fund.
