Liberty Ermitage the international fund group with $2.2bn dollars under management, has been appointed as investment advisor to a new hedge fund of funds launched by Standard Bank.
Seeded with $20m and with current assets of $35m, the Standard Asset Selection Fund is domiciled in Jersey and will be run along broadly the same lines as Liberty Ermitage’s flagship Asset Selection Fund. Asset Selection has over $250m under management and targets returns of two times cash plus over a three year period or longer. It has a three-year record with a current standard deviation of 1.8 and a risk profile significantly lower than bonds.
Charles Minnaar, Head of Alternative Investments at Standard Asset Management, New York, commented: “After an extensive due diligence of a number of fund of fund managers, we decided to appoint the Liberty Ermitage Group because of their in-depth qualitative approach to hedge fund analysis and the fact that they have significantly more resources and experience than most of the firms and institutions we met. There are few hedge fund of fund evaluators that have such a rigorous process and solid track record.”
The fund will be promoted internationally by Standard and offers two separate classes, a leveraged and non-leveraged version. Minnaar added: “We believe that in the current low interest rate environment the appeal of a leveraged version where we put in a dollar for every dollar invested should have huge attraction. Liberty Ermitage generated around 7% last year in their own fund without the use of leverage.”
In a world where traditional bond investing has lost appeal and value and is likely to remain this way for some years to come, the Standard Asset Selection fund is a viable alternative. The graph below shows out performance in the last three years of the Liberty Ermitage product 30% v Salomon World Government Bond Index -4%.