Man Investments said it has launched the Man Global Strategies Diversified Series 2 Ltd (‘Series 2’), a capital guaranteed structured product which uses the investment selection expertise of one of its core managers.
A guaranteed bond structure with the potential for either profit lock-ins or income returns, Series 2 offers investors alternative ways to access the Man Global Strategies Diversified portfolio in the form of USD/EUR/CHF class capital bonds and USD/EUR class income bonds.
Series 2 aims to generate consistent returns for a conservative level of volatility by incorporating appropriately weighted exposures to hedge fund style portfolios constructed and managed by Man Global Strategies.
The USD/EUR capital bonds and USD/EUR income bonds will target annualized returns of around 13-15% for an annualized volatility of 7-8% while the CHF capital bonds will target annualized returns of around 12-14% for an annualised volatility of around 7-8%.
The Series 2 portfolio includes allocations to arbitrage, directional, equity hedge, long/short equities and managed futures style portfolios, providing exposure to their distinct risk and return characteristics and complementary profile strengths. Each style portfolio in turn allocates to an extensive range of managers, providing an additional level of diversification, a spokesman for Man said.
Series 2 is offered in USD, EUR and CHF capital bonds and USD and EUR income bonds. The capital bonds provide the security of 100% capital guarantees and a profit lock-in feature. The income bonds will also offer 100% capital guarantees, and a guaranteed coupon equivalent to 2.5% of the face value of the bonds will be paid for the first two years, Man said. Following the last guaranteed coupon payment, a discretionary annual performance-linked coupon may be paid on the income bonds.
“Man Global Strategies has been responsible for the construction and management of numerous successful Man Investments product portfolios,” says Christoph Moeller, Managing Director for Global Sales and Marketing for Man Investments. “Series 2 is expected to appeal to a wide range of investors, offering alternative ways to access the impressive Man Global Strategies Diversified portfolio.”
Series 2 incorporates a principal protection structure that guarantees investors the return of 100% of their initial investment at maturity. In the case of the capital bonds, a profit lock-in feature which, subject to trading performance, has the potential to elevate the level of the capital bonds guarantees at maturity by locking-in a portion of net new trading profits following periods of sustained profitability. The operation of both the guarantees and the profit lock-in feature are subject to the terms and conditions of the capital guarantees provided by UBS AG, London Branch.
Man Global Strategies constructs and manages hedge style and multi-strategy portfolios for Man Investments, including many of the portfolios for Man Investments’ structured products. It also creates portfolios for banks and other institutional partners operating in local markets around the world. Series 2 Ltd will be available to investors from 3 May to 14 June 2004 with a possible extension to the offer period, the spokesman said.