UK/IRELAND- Credit Suisse First Boston has launched its Hedgefund Index Participations (HIP) tracking fund designed for pension schemes and other institutions wanting to invest in alternative investments.
The HIP fund will maintain a portfolio replicating the performance of the CSFB/Tremont hedge fund index and shares in the fund will be listed in Dublin.
The index is constructed using a database of more than 2,600 hedge funds including both US and offshore but excluding fund of funds. It was designed to track and compare hedge funds with other asset classes.
CSFB says HIP will be diversified across a wide spread of hedge fund managers and strategies. There are neither exit charges nor performance-based fees and the fund will offer monthly entry and quarterly redemptions.
In the eight years since the creation of the CSFB/Tremont, it has returned an average 11.6% a year compared with 8.7% for the FTSE 100 index.
Says Roland Lorenzo, managing director of CSFB: “this new fund offers an even greater diversification of risk than a traditional fund of hedge funds while still offering the potential for excellent capital growth.”
Lorenzo says there remains a reluctance to invest in hedge funds as they are perceived as too risky. “Experience suggests that they are much less volatile than equities while still offering equity like returns with lower risk than traditional passive benchmarks.”