Swiss Asset Manager Launches Two New Fund of Hedge Funds

Stephen Harris

22 June 2005

Arena Fund Management, the Swiss asset management group, has launched two new funds of hedge funds, the Arena Conservative and Arena Dynamic. Both are domiciled in the Bahamas and managed from the firm’s new Guernsey office, both are funds of hedge funds and will invest in a diversified portfolio of hedge funds using both directional and hedged strategies. The company’s view is that directional strategies have a large net exposure of long or short and generate more beta than alpha, whereas hedged strategies have a more flexible net exposure and are a good generator of alpha. The company chose the Bahamas over its original choice of Luxembourg because of its flexible regulatory framework. Pictet & Cie in Luxembourg will act as sub-administrator and custodian. The Arena Conservative fund aims to generate returns of between 6 and 12 per cent in line with the CSFB/Tremont Index with volatility below fixed income level. It has been designed to take the place of fixed income and deposit allocation in a portfolio. The Arena Dynamic also tracks volatility in the CSFB/Tremont but with much higher return expectations of between 12 and 24 per cent. Arena will use Geneva-based investment management firm Soprigest’s methodology, which is centred on an international and broad diversification asset strategy that reduces risk whilst maintaining high rates of return. This involves investing in specialised international funds which Soprigest consider highly profitable but less susceptible to volatility.