Fleming Asset Management is to fly Botswana’s flag in the European markets as it prepares to list its newly created hedge fund, Zenith Fund on the Luxembourg Stock Exchange in a bid to access the European and Asian markets.
The alternative investment fund, which is estimated at 43 million Euros, was founded during the third quarter of the year in a partnership between Fleming Asset Management and international specialist alternative fund of hedge fund Octane Fund, to join the ivy league of global financial houses.
The company is one of the 9000 hedge funds scattered around the world whose total value is estimated at over US $ 1.3 trillion.
“Octane, the management partner, performs sophisticated qualitative and quantitative analysis to source managers and construct client-focused fund of hedge fund solutions,” the company said this week.
Fleming said the fund, which will be known as┬áThe Zenith Fund, is a BVI (British Virgin Islands ÔÇô the world’s pre-imminent offshore corporate domicile) fund is to be listed in Luxembourg and will be quoted here at Stockbrokers Botswana on a NAV basis.
“Whilst the underlying assets within this fund are currencies, equities etc as per normal investments, it is important to note that it is the strategies that are key to this fund, and they are principally, Global macro, Commodity Trading advisory and Equity Long Short,” Bafana Molomo of Fleming Asset Management said.
He added: “In the case of a Global Macro Strategy, the dominant investment theme is to capitalise on changes in the global macro-economic environment through participation in the various capital markets.
A top-down methodology would, therefore, allow this strategy to utilize all assets classes (equities, bonds, currencies, derivative), available in the global capital markets in an effort to exploit pricing inefficiencies.”
He said the investment is primarily focused on absolute returns in Euro and unlike traditional long only equity funds; it is benchmark aware rather than benchmark driven.
While this fund will be measured against indexes such as the MSCI EAFE, its main aim is to produce an absolute return in Euro at a reduced level of risk as measured by standard deviation. It will, however, be commonly measured against the globally recognized HFRI (Hedge Fund Research Inc.)
Hedge funds, which have been in existence for over century, became popular around the world as an asset class after the dotcom bubble in April 2000.
Normally, hedge fund investing, which can be referred to as alternative investment strategies (AIS) comprise an asset class that seeks to generate absolute positive returns by exploiting market inefficiencies while minimizing exposure and correlation to traditional stock and bond investments.