Man launches second retail guaranteed fund in Hong Kong

Man Investments, one of the biggest hedge fund managers in the world, will launch a second Hong Kong regulator-authorised futures and options product with a guarantee feature. The offer period is from June 18 to July 16.

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%.