GLOBAL - Barclays Global Investors is targeting US$1bn of investor capital with two new global currency hedge funds.
The Dublin domiciled BGI Currency Fund (US$) and BGI Currency Fund (Euro) will be managed using the same active process used by BGI’s existing currency overlay portfolios since 1999.
The funds will each initially invest in 11 currencies - Euro, Sterling, Swiss Franc, Swedish Krone, Norwegian Krone, US Dollar, Canadian Dollar, Australian Dollar, NZ Dollar, Singapore Dollar, Japanese Yen - and will have a target alpha of 8% net of fees, with a target risk of 10-12%. The annual management fee is 1% with a performance fee of 20% on returns above the benchmark. The hurdle rate is US$ 3-month LIBID or Euro 3-month LIBID.
The minimum investment is e250,000 or currency equivalent.
Mark Fitzgerald, director, alternative investment group at BGI, said: “The currency funds will enhance BGI’s product offering in the hedge fund space and will give investors the opportunity to generate absolute performance returns, building upon the successful track record that BGI has already established in currency management. “Following the success of the existing overlay programme, it was a logical next step to place the strategy within a fund wrapper and make it accessible to investors.”
BGI manages over US$18bn in currency strategies globally and transacted over US$200bn in foreign exchange last year.
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