Iveagh Private Investment House, the Guinness family office and asset manager, has teamed up with 47 Degrees North Capital Management to launch a Newcits fund of funds.
Newcits, or hedge funds that comply with UCITS guidelines, have galvanised the hedge fund industry. Brevan Howard, MAN Group and GLG Partners have launched UCITS hedge funds over the past year. Deutsche Bank has also recently announced that it will launch a Newcits fund every three weeks over the next few months.
The Iveagh fund of funds (Iveagh Newcits Fund), will offer investors access to a portfolio of UCITS regulated absolute return strategies. 47N will act as advisor to the funds.
Iveagh Chief Executive Officer, Paul Ross, said: Our investment in absolute return UCITS funds goes back to 2008 when we were at the forefront of this paradigm shift in European absolute return investing. The combination of Iveaghs asset allocation experience with 47Ns thorough and robust process in specialist alternative investing creates an outstanding opportunity to expand our efforts with this dedicated Newcits fund.
Claude Porret, CEO of 47 Degrees North, said: We believe that the growth of absolute return strategies within the UCITS structure is creating many opportunities for our particular skills and expertise and that 47N can offer much needed analytical clarity in this fast-growing investment universe. Given ongoing events in the hedge fund industry, investors will value active selection and management of hedge fund risk by a highly experienced and successful team.
However, a recent survey by the EDHEC-Risk Institute has cast a shadow over the burgeoning industry. Many respondents feared that hedge fund strategies would need to be altered in order to fit into the UCITS structure. The liquidity demands of UCITIS funds led to 69% of participants stating that liquidity premium of hedge fund strategies will disappear and that performance will fall.