Redi & Partners has announced the launch of its first fund of emerging markets hedge fund, the Londinium JPM Emerging Market Fund by investment manager JPMorgan.
The Londinium JPM Emerging Markets Fund was created after a six months study of the economic prospects of emerging countries. Redi & Partners, as Investment Advisor, has selected 19 funds out of a universe of 200 funds, the selections were made through research, direct contacts and personal interviews.
Launched on the 15th of March, 2007, the fund is based in France, where new regulations issued by the French Authorities are attracting the establishment of new hedge funds at the expense of off-shore tax havens.
The initial allocation to each fund has been limited to 5% to create a broad base. Great attention has been placed in studying the strategies and styles of trading of each fund to avoid concentration of the same and reduce the volatility of the new fund of hedge funds. Some of the markets include, Greater China, Eastern Europe, including Russia, Kazakhstan, the Baltic republics, Romania and Bulgaria, India, Brazil, Japan, as well the Pacific market.
BNP Paribas is administrator, with their securities services branch as custodian. JPMorgan is responsible for negotiating the investments in the funds. Preference has been given to hedge funds and long only funds wherever a real hedging was possible.
Funds of hedge funds have seen a 29% increase in 2006, and the trend is expected to continue in 2007. The Londinium JPM Emerging Market Fund will work with the emerging markets equity, cash futures arbitrage, volatility arbitrage, statistical arbitrage, merger arbitrage and convertible bond arbitrage. As well as managed accounts specialized in currency instruments, debt and debt related financial securities linked to global emerging countries.
The unique fund aims at offering the highest level of negotiating power, security, transparency and independence of controls. The pro-forma performance of the basket shows an annualised rate of return of 26.97%, with an annualized volatility of 8.73%. Outperforming by almost twice as much the CSFB/Tremont Emerging Markets Index (+15.36%).
The investments in Managed Accounts 15%, with weekly liquidity, plus the cash 5% totaling 20% allow the Londinium JPM Emerging Markets Fund to flexibly modify its profile, especially in case of unexpected market events, in one week.
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