UK - HSBC Investments has launched a life wrapped pension hedge fund product aimed at small- and medium-sized final salary schemes.
HSBC Investments’ (UK) head of institutional business development Julian Lyne said: “The combination of the fund of funds structure and the life wrapper now makes it much simpler and more transparent for these pension schemes to invest in hedge funds.”
The underlying holding is the HSBC Global Absolute Limited fund of hedge funds product, which invests in up to 40 hedge funds and launched in 2001.
Minimum initial investments in the new product start at £100,000, with an annual management fee of 1.25%. A 10% performance fee is applied if three month returns hit Libor plus 3% pa.
The underlying fund is listed on the London Stock Exchange and as an institutional share class, benefits from daily dealing. Discount control mechanisms, share buy back and redemption limit the risk of shares trading at a large discount to its net value.
Lyne added: “Pension fund managers are increasingly recognising the benefits that hedge funds offer, but only the very large schemes have the resources or expertise to select their own diversified portfolio of hedge funds.”
Most respondents in this week's Pensions Buzz do not think businesses should be able suspend AE contributions if in financial distress.
Former BHS owner Dominic Chappell has lost the appeal against his section 72 conviction and sentence for failing to hand over information to The Pensions Regulator (TPR).
This week's top stories include Marsh and McLennan Companies agreeing to buy JLT, and the home secretary calling for AE to be scrapped in a no-deal Brexit scenario.
Lesley Titcomb says the watchdog wants closer interactions with pension funds to spot problems sooner and act before having to use its more stringent powers