Close Fund Management opens Hedge Fund to Retail Investors

Close Fund Management is teaming up next month with BlueCrest, a well known US hedge fund manager with more than $9bn under management. This will give access to more private investors interested in hedge fund returns. The Credit Suisse Tremont hedge fund index was up 1.82 per cent in March and almost 5.5 per cent so far this year.

Close Fund Management has had a successful year and recently won the Lipper Fund Award for 2006 for the Equity Sector—Information Technology for Close FTSE TechMARK Fund.

As hedge funds slowly enter the mainstream, wealth managers are seeking to tap into growing awareness of these funds. The main attraction of hedge funds is that returns are normally not closely correlated to mainstream asset classes such as bonds or equities, making them an attractive diversification tool for investors.

According to the Financial Times; Marc Gordon, managing director of Close Fund Management, says its new fund will follow a multi-strategy approach investing in seven different hedge funds managed by BlueCrest.

Initially, almost a third of the fund will be invested in BlueCrest Equity fund, which takes both long and short positions on stocks, in theory enabling it to profit from both share price rises and falls.

This fund seeks to follow a market-neutral strategy, meaning it should be unaffected by a stock market crash. Gordon says the new Close All-Blue fund is different from other hedge funds of funds as all hedge fund allocation and strategy decisions are taken by BlueCrest.

The new fund will be listed on Aim, the junior exchange. Close hopes to raise £200m but has set itself a minimum target of £50m. The minimum investment is £37,500.