UK- Man Investment Products has launched its first product to guarantee investors a return of at least 120% of their initial investment at maturity.
The new product is the fourth in the series of Man IP’s 220 structured funds but different from its predecessors in that the bank Lloyds TSB is providing a guarantee to ensure returns above 120%.
The previous three products have guaranteed investors a return of 100% with the original Man IP 220 product so far having achieved an annualised net return of 18.8% since inception in December 1996.
Series 4 is available in both US$-class bonds maturing in 2013, and euro-class bonds, set to mature the following year.
The proceeds of the bonds will be invested in the Man-AHL Diversified Programme - a directional trading system taking advantage of price trends in around 100 global futures markets - and the Man-Glenwood Portfolio, which maintains investments across a range of hedge fund managers and strategies.
James Jacklin, senior manager at Man, says they should raise over $200m by the end of the offer period at the beginning of October.
Unlike ordinary bonds, the Series 4 will not pay a regular coupon. Rather the 120% plus return will be redeemable at maturity. Bonds sold prior to that date are not subject to the guarantee.
The target for each class of bond will be medium-term annualised growth of around 17-18%, with volatility restricted to around 14-15%.