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Catley Lakeman launches fund of structured products
by David Campbell on Aug 16, 2013 at 11:20
Structured product broker and consultancy Catley Lakeman is to target discretionary investors with the launch of a conservatively managed fund of structured products (SP) in October this year.
The Irish-domiciled, Ucits IV-compliant AHFM Structured Products fund has been running in-house since January. It is managed by Catley Lakeman’s asset management subsidiary Atlantic House Fund Management, which received Financial Conduct Authority permission to trade last month,
The fund will be run with a relatively cautious return profile, with a more aggressive version being considered for a later date. It will be available from a minimum investment of £250,000 with the total expense ratio capped at 95 basis points.
‘The first fund is likely to be cautious with relatively low delta as that replicates most closely what most clients buy, but will be followed by a higher delta fund later,’ said company co-founder Russell Catley (pictured).
In a second deal, the company has also been contracted to manage the security selection for a macro-thematic hedge fund on behalf of US analyst and asset allocation business Parala Capital.
In addition to providing a diversified and balanced exposure to a range of relatively cautious SP strategies, Catley said the Ucits packaging had planning and tax benefits.
‘The simple fact is that lots of discretionary managers use structured products, but see them more as a diversifier than a core holding. This allows them to access a range rather than a single strategy. There are also structural advantages. For instance offshore bonds can’t hold direct securities [such as a listed SP] so you run the risk of having exposure in regular portfolios but none in offshore wrappers.’
Discretionary managers are increasingly important for originating banks, with SP consultancy the Investment Bridge estimating intermediated investments drive 50% of new business versus just 15% four years ago.
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