LONDON (HedgeWorld.com)–Capital Management Advisors announced that it has requested admission of its investment company Global Hedge to trading on the London Stock Exchange via a proposed share placement valued at $500 million. CMA, which manages about $1.65 billion, also announced that Global Hedge will seek to be admitted to the Financial Services Authority’s Official List.
Global Hedge will be managed by CMA, a wholly owned subsidiary of the Zurich, Switzerland-based private banking group EFG International. The fund will invest in between 35 and 50 hedge funds, with the aim of creating a strategically and geographically diversified low volatility portfolio. The fund will be registered in Guernsey as a closed-ended investment protected cell company. It intends to offer shares denominated in U.S. dollars, euros and pounds sterling.
The strategy aims to return the London Interbank Offered Rate (Libor) plus 7%. Leverage is targeted at 100% of NAV, which, said a CMA spokesman, will be calculated on a monthly basis. CMA’s 15-strong analyst team will be responsible for research and due diligence, with funds to be selected from CMA’s proprietary database of 2,500 hedge funds.
According to the press release, CMA already has employed this strategy successfully in its CMA Multi-Hedge Arbitrage and CMA Multi-Hedge Growth funds. According to the release, if the same conditions were applied to these funds as exist for CMA Global–a notional leverage of two times and comparable management and performance fees–they would have an annual net return of Libor plus 7.81% since May 1998.
In a press statement, Sabby Mionis, founder and chief executive of CMA, said that he and CMA cofounder Angelos Metaxa planned to invest $20 million in the fund with a two-year lock-up. CMA’s parent company EFG will also invest $20 million.
Before founding CMA in 1997, Mr. Mionis worked in the investment services group of Donaldson, Lufkin & Jenrette, assisting institutional and high-net-worth individual investors to create and implement investment strategies. Mr. Metaxa previously worked as a currency and fixed-income trader with Swiss Bank Corporation from 1991 to 1993 and with SBC Warburg from 1995 to 1997.
With respect to the placement, Lehman Brothers and Merrill Lynch will be joint global coordinators, joint book runners and joint sponsors. EFG Bank and EFG Eurobank will be co-lead distributors.
As regards the management of the fund, Global Hedge will receive prime brokerage services from Lehman and Merrill Lynch, with HSBC Guernsey acting as administrator and HSBC Custody and Clearing Services as custodian. PricewaterhouseCoopers will audit the fund accounts. The legal adviser has not yet been named.
The fund itself will target high-net-worth individuals, private investors and some institutions. Performance and management fee levels have not yet been disclosed, although a company spokesman revealed that these will be within the usual parameters for funds of this type. The precise details along with minimum investment amount will be disclosed at a later date.
Contact Bob Keane with questions or comments at [email protected].