Aquila Capital, a Hamburg-based alternative investment manager, is launching what is believed to be the first commodity trading adviser fund in a Ucits III format.
CTAs were widely viewed as one of the hedge fund strategies that would not be compatible with the more rigorous risk, diversification, liquidity and eligible asset constraints of the Ucits world.
Aquilas Pharos Evolution CTA will ensure liquidity by settling all its managed futures positions overnight, ensure a wide range of counterparties to meet diversification rules and restrict leverage to comply with the value at risk measure embedded in the sophisticated Ucits structure, although leverage as high as eight times may still be possible.
It will use certificates to gain exposure to some assets that would otherwise be deemed ineligible. According to Lauren Damask of Aquila, it had attracted enormous interest from institutional investors, with many other CTA managers likely to follow suit.
We are the first, I believe, but there will be more Ucits CTAs that will be launched, says Lauren Damask. It has been extremely well received. People are saying we have never seen anything like this before. Investors are looking for regulated investment structures with risk controls.
L.D.