United Kingdom-based asset management group Fortune is planning to launch its flagship Market Wizards fund of hedge funds to Australian institutional investors.
The Market Wizards fund of hedge funds takes a different approach to traditional funds of funds because it actively manages each underlying manager within the portfolio.
Whereas traditionally underlying managers are free to follow whatever strategy they choose, the Market Wizards approach aims to keeps them under close tabs.
The managed accounts will be held on a platform managed by HFR Asset Management in Chicago.
According to Jack Schwager, the pioneer of this type of investing and author of the Market Wizards series of books, the structure guarantees transparancy and liquidity.
"We set up a single manager trust where the ownership lies with the investing side rather than with the managers. We place the funds on a platform that is permanently monitored, which increases transparency and liquidity," Schwager said.
He said the structure meant the net asset value of the fund could be checked on a daily basis, something no other fund of fund could do.
The Market Wizards fund has targeted 27 underlying managers that will follow about 12 separate hedge fund strategies.
It has already raised between US$50 million and US$60 million overseas, and is planning an initial public offering on the London Stock Exchange in May.
As of the end of October 2006, the Market Wizards fund had an annualised return of 12.3 per cent since its inception in 1999.
