Robeco issues hedge fund backed bond
NETHERLANDS - Robeco Alternative Investments has launched the Robeco Protected Absolute Return (PAR) Note, with returns based on a basket of hedge funds – the first time such a bond with a principal guarantee has been issued for the Dutch market.
The bond, which is redeemed after seven years will pay no interest in the interim and the redemption, guaranteed by Rabobank Netherlands will be at least 100% of the nominal value.
Robeco says it has launched the bond to allow investors to access hedge funds in a simple way.
The firm has constructed a portfolio spread over six categories (Long/short equity, Convertible Arbitrage, Equity Market Neutral, Event Driven, Fixed Income Arbitrage and Global Macro), and 15 managers.
This fund-of-funds portfolio is managed by Robeco Alternative Investments and the amount redeemed when the note matures in seven years is linked to the net asset value of the portfolio.
A first tranche of e50 million has already been issued, with a second tranche to be offered next month.