for many years been used by large financial institutions and their
wealthy private clients as a means of risk diversification.
Now this investment avenue is about to become available to a far
wider audience with the launch by asset manager Skandia Investment
Group (SIG) of a multi-manager fund offering investors access to a
range of alternative asset classes within a single structure.
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According to SIG, a unit of UK insurer Old Mutual, the new fund is
unique in that instead of investing into one alternative asset
class it will invest in 10.
The fund’s initial asset structure, which SIG said has been based
on feedback from financial advisers around the world,
encompasses:
• Diversified hedge fund exposure which will be achieved via a
fund that gives similar exposure to a diversified fund of hedge
funds.
• Listed timber via a fund that invests in listed timber
related securities such as companies that own and manage
forestry.
• Precious metals via funds that invest in securities related
to the extraction and production of precious metals such as gold,
nickel and silver.
• Listed water via a fund that invests in listed water related
securities such as utilities and water purification.
• Listed infrastructure via a fund in securities related to
infrastructure such toll roads, airports and electricity
generation.
• Hard and agricultural commodities via a fund that invests in
securities related to commodity prices such as oil, metals, wheat
and soy beans.
• Active currency management via a fund that seeks to profit
from currency volatility.
• Global macro strategy via a fund whose manager seeks to take
advantage of arbitrage opportunities between different markets and
asset classes.
• Long/short equity strategy via a fund whose manager runs
both long and short equity positions in equal proportions.
• Volatility via a fund whose manager seeks to profit
from inefficiencies between the expected and realised volatility of
equity markets.
SIG noted that the fund’s managers would be monitored by 40 of its
own analysts and portfolio managers. SIG also has the flexibility
to replace managers at any time and add different and additional
asset classes.
Established in late-2007 to consolidate Skandia’s three asset
management units under a single entity, SIG manages 100 segregated
mandate portfolios with average assets of over $100 million each
and 2,400 retail funds. SIG has total assets under management of
$115 billion.
