Dexion offers access to UK hedge fund
Australian retail investors will soon have the chance to put money into a UK listed hedge fund.
Dexion Capital will be offering its Dexion Absolute fund-of-funds hedge fund, which is listed on the London Stock Exchange, director Andrew Gale said.
“We will be setting up an Australian registered fund that is linked to the listed investment company in London,” he said.
“This will mean investors will be able to buy shares in the London-listed fund in Australian dollars.
The London fund is available to investors in four currencies, including Australian dollars, as it has been available to institutional investors for a couple of years.
Gale said there was about $1.6 billion of Australian superannuation money in the fund, which sees up to $6 million of trades a day.
“Because this is a listed fund, the minimum investment for retail investors will be just one share if they wish,” he said.
“So if the investor wants to put $100 in the fund they will get $100 worth of shares.”
The push into the retail market will be through platforms and the manager will be focusing on the major providers in that market.
But Gale admits there are a few prejudices to overcome before getting on the approved lists.
“Listed investment companies in Australia have not been a happy experience for investors,” he said.
“Also, a lot of people don’t buy foreign shares preferring to put the money in managed funds first.”
Gale hopes by offering the fund in local currency and throughout platforms Dexion can overcome the negatives.
“It is an Australian regulated fund for local investors that invests in a London-listed fund managed with fund-of-fund selection by a global player Harris Alternatives based in Chicago,” he said.
“Australian investors will have access to a fund manager that in the US has a $US3 million minimum investment, but they can access for the cost of one share.”
Harris chooses hedge funds that look for a consistent rate of return with low correlation to equity or bond markets.
The allocation for managers in the fund at present is 37 per cent in long/short equities, 14 per cent in long/short credit and a similar amount in opportunistic funds. The rest of the portfolio is divided up among active and value managers.
Currently there are 55 managers in the fund-of-funds product.
Gale said by offering a listed company structure, investors will have daily liquidity as opposed to the long redemption period of some hedge fund products.
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