Absolute Capital rolls out capital protected fixed interest fund

Sydney-based boutique manager Absolute Capital has launched a new listed debt investment that is offering investors a high return along with capital protection.

Tuesday, November 29th 2005, 6:38AM

The Packaged Income Notes – known as PINs – will be listed on the NZDX market and are targeted to pay 9.25% annually, with interest paid quarterly.

The 100% capital protection is being provided by ABN Amro. ABN Amro bought a stake in Absolute last year. The PINS notes will have a seven-year term.

Absolute Capital managing director Deon Joubert says another key feature of the notes is that they have what he calls a “rear ended performance fee structure”.

During the life of the notes the manager receives a “small” on-going management fee, and the main payment is made at the end of the term.

Joubert says this is a new innovation in the market. “The rear-ended performance fee structure offered by PINs Securities NZ for this PINs product has never been made available before to New Zealand retail investors (it is usually only offered to institutions.)

“Under this arrangement the manager’s fees are offered to retail investors for the first time in New Zealand generating considerable alignment of investor and manager interests throughout the life of the investment.”

Joubert is also keen to point out the fund is not investing in collateralised debt obligations (CDOs), rather it is an international, multi-manager fixed interest fund.

He says it will invest in a “diverse range of internationally diversified credit and other investments.”

“The product’s returns will be generated by a diverse credit investment portfolio that will be invested in 20 specialist credit managers who in turn invest in a range of countries and industries with a number of strategies.”

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