Crown Managed Futures: LGT Capital Partners

Best Performing Specialist Fund of Hedge Funds Over One Year: Highly Commended; Best Performing Specialist Fund of Hedge Funds Over 3 Years: Highly Commended

Crown Managed Futures provides investors with access to an actively managed portfolio of trading managers focussing on commodity, equity, fixed-income and foreign exchange markets globally.

Since its launch in 2000 it has invested via LGT Capital Partners' (LGTCP) proprietary managed account platform and provides full position transparency, a high level of liquidity and complete segregation through a ring-fenced cell structure.

LGTCP's invested assets in CTA/macro funds totals in excess of $1 billion.

"Crown Managed Futures is the flagship offering from our CTA/macro team," says Thomas Weber, head of hedge fund investment management at LGT Capital Partners. "The fund offers sophisticated asset allocators the opportunity to mitigate their equity beta risk, especially in moments where that is most needed."

In addition to Crown Managed Futures itself, LGTCP offers a range of diversified funds whose asymmetry of returns is enhanced by their exposure to CTA/macro funds.

"Managed futures strategies offer true diversification. Conceptually, their focus on systematic technical factors makes them different from the vast majority of investment strategies that focus on fundamental analysis and discretionary decision making," he says.

That said there are extended periods of time where fundamentals and reason do not rule markets. "Often they are led by greed and fear. Empirically in those periods, managed futures strategies have excelled," says Weber.

The space occupied by the Crown Managed Futures fund is not for everyone. "LGT Capital Partners has invested in the managed futures arena since our inception thirteen years ago. There are those that hate this space and those that like it. We are very much in the latter camp," says Weber.

"In contrast to other players, we believe in and have proven to add value by active portfolio management. This can mean shifting allocations from trend following to non-trend following strategies, allocating to different sub-strategies within these two categories as well as the active re-sizing of exposures to individual managers."

Crown Managed Futures's double digit performance in the last four calendar years to the end of 2008 shows the portfolio's robustness. In 2008, the fund achieved a return of 21.84%. Whereas the returns are impressive, investors still need to understand the market's characteristics and the implications for their investments, Weber says. "Those that invest in managed futures must be comfortable with a higher level of volatility and the propensity for drawdowns."

LGT Capital Partner's CTA/macro team is based in Pfaeffikon and New York. It is part of a 60 person organisation that encompasses five specific centres of competence within the hedge fund universe. In addition to this area, LGT has specialist teams covering Asia, credit, relative value and long/short equity strategies as well as dedicated resources to handle asset allocation and other areas.

"We believe that our core competence approach to hedge fund investing puts us in a strong position to offer tailored solutions and specialist funds such as Crown Managed Futures whilst enhancing our ability to manage more diversified portfolios and leverage off the industry know how and experience that exists within each team," says Weber.

FUND FACTS: CROWN MANAGED FUTURES

Full name of fund: Crown Managed Futures
Name of investment/management company: LGT Capital Partners
Contact: Steve Remy, Schuetzenstrasse 6, Pfaeffikon 8808, Switzerland ([phone]; [e-mail])
Launch date: October 2000
Assets under management: $1 billion plus
Annualised return: 9.02%
Annualised volatility: 12.35%
Strategy: managed futures
Share classes: US dollar, euro, Swiss franc, gold in US dollar
Administrator: Fortis Prime Fund Solutions Administrative Services (Ireland)
Auditor: PricewaterhouseCoopers
Custodian: Fortis Prime Fund Solutions Custodial Services (Ireland)
Domicile: Ireland
Management fee: 1% per annum
Performance fee: 7.5% per annum subject to a high-water mark
Minimum investment: €250,000 or US dollar or Swiss franc equivalent
Lock-in/up: none
Redemption period: weekly with three business days notice