Man launches second retail guaranteed fund in Hong Kong

Man AHL Guaranteed Futures 2, which will mature on November 30, 2012, is based on its predecessor’s structure and also has a five-year tenor, with a minimum investment of $5,000. Man AHL Guaranteed Futures – launched in August 2006 and maturing on November 30, 2011 – raised a total of $52 million.

Man hopes the new product will raise even more, says Giselle Lee, Hong Kong-based head of sales at Man Investments, citing strong distributor demand – 19 banks will be distributing the product, up from 15 for the first issue.

“[The August product] launch did not deplete sales of our open-ended product in Hong Kong,” says Lee, “so we knew there was retail demand out there that was untapped.”

Like its predecessor, the new offering has a capital guarantee from HSBC of at least 90% of the initial investment on maturity, and a profit lock-in feature means the guarantee could rise to 100%. For example, if the product makes a net trading profit of 10%, half of that will be locked in and the guarantee will rise by 5%, says Lee.

Man has set the initial guarantee lower because it wants to retain greater potential upside for the investor, says Lee.

London-based AHL – on whose funds the product is based – is one of Man’s core fund managers and exclusively uses quantitative, or algorithmic, computer trading models to manage its investments. AHL has $18.8 billion in assets under management and has a track record stretching back to 1983.

Man Investments launched its first open-ended, Hong Kong-authorised futures fund, Man AHL Diversified Futures, in May 1998. As of April 30, 2007, that product had delivered an annualised return of 12.9%.