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HSBC Launches Placings for Two Funds of Funds

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LONDON (–HSBC Republic Investments has launched placings to raise additional capital for two exchange-listed funds of funds, the HSBC European Absolute and HSBC Global Absolute funds. The placing will close on June 23, with dealings to commence on June 29.

“Fund of hedge funds products such as European and Global Absolute allow investors to benefit from diversified investment in an asset class normally characterized by high barriers to entry,” said Tina Hugo, head of U.K. distribution for HSBC Republic Investments, in a statement. “We have seen a continuous demand for shares from both institutions and private clients and these share issues will meet the demand from existing shareholders, as well as enabling us to attract new investors.”

The offer proceeds for both funds will be allocated to equity/long short managers. New fund strategies will also be considered, according to HSBC Republic. The subscription offer is being sponsored by Kleinwort Wasserstein Securities.

European Absolute since its inception in April 2001 has delivered annualized returns of 7.3% with a volatility of 4.3%. Prior to the placing, European Absolute fund had total assets of 65.1 million euro and a Sharpe ratio of 1.04.

The management fee is 1.5% per annum. The performance fee is capped at 3% of net assets and subject to high watermark provisions of 10% of euro three-month LIBOR for Euro shares and 200% of sterling three-month LIBOR for sterling hedged shares.

Global Absolute since its inception in April 2001 has delivered annualized returns of 7.1% in dollar terms with a volatility of 3.1%. The fund had $89.3 million under management April 28 and a Sharpe ratio of 1.59.

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Contact Bob Keane with questions or comments at [email protected].