Coutts, the private bank owned by The Royal Bank of Scotland, today announced that it is to offer clients the opportunity to invest in a new principal protected hedge fund of funds.
Coutts is aiming to raise at least 100 million in the new Orbita Diversified Strategy Deposit. Clients will be able to transfer money from existing accounts into a three year deposit fixture, whose interest is linked to the performance of a newly created hedge fund of funds. After the first year, clients will be offered a quarterly facility to break the fixture, but should this facility be used, there is no guarantee of recouping the initial deposit.
This move reflects Coutts’s ambitions to become a significant player in the alternative investment market. It already has over US$3 billion invested in its Orbita fund of funds range, which includes a global multi-strategy fund and a European multi-strategy fund.
Coutts is planning to add an Asian Orbita fund later this year.
“Orbita Diversified Strategy Deposit further strengthens our Orbita range of alternative investment products and it forms an integral part of our strategy to provide security, confidence and choice for clients,” explains Coutts’s head of alternative investments, Robert Dawkins. “In the current low interest rate environment, many of our clients are looking for ways to increase the yield on their deposits without increasing their risk to capital. The new deposit is designed to do just this.”