Fund of funds giant HFR Asset Management has joined forces with RAB Capital to launch structured products. The firms were slated to begin marketing their first principal-protected note on Thursday as DW went to press. The note will be issued by Dresdner Kleinwort Wasserstein next month and linked 50% to the HFRX Global index and 50% to the RAB Fairseat Fund, a multi-strategy fund.
The note, which provides principal-protection through CPPI, hedges out interest rate risk using a swaption and can use leverage of up to 175% if the note performs well, according to Edward Hands, director at DrKW. "HFRX is more stable; Fairseat's more funky," John Godden, managing director at HFR, said of the appeal of combining them. Joe Sacarello, a marketer at RAB, said HFR's track record for developing structured products was a driver for the tie-up.
The note has a EUR100,000 investment minimum and the firms are hoping to raise USD75 million. "There are a lot of people who can't buy funds of funds...but can buy structured products," said Godden. The firms will collaborate on further issues if the first roll-out proves successful, he stated.
