Close and BlueCrest team up for fund launch

Close Fund Management and BlueCrest Capital Management are to join forces to launch the Close AllBlue fund.

The fund aims to bridge the gap between traditional fund of hedge funds and single strategy/manager products. It will offer access, via AllBlue, to a portfolio of seven diversified strategies managed by BlueCrest. This is the first time investors will be able to access this portfolio in an Alternative Investment Market-quoted format.

“The Close AllBlue fund is not a fund of funds. It is a balanced vehicle allocating across several different strategies and there are lots of advantages to it,” says Marc Gordon, managing director of Close Asset Management.

One of these, he says, is the transparency of underlying investments within each of the strategies. This, he notes, is important for risk control and useful for getting a better understanding of the correlation between the different strategies.

“This structure makes it easier to create a better portfolio without over-diversifying,” says Gordon. “And it allows you to manage your volatility in a more effective fashion to create more interesting returns.”

Gordon argues that most British private and institutional investors cannot easily invest in offshore hedge funds. In addition, hedge funds have limited liquidity. “This, however, is an onshore investment company,” he says. “It will have a price every day, a net asset value will be published weekly and it will be in sterling, whereas most hedge funds are in dollars.”

Gordon expects the issue of shares to May 18, 2006, to raise 100m. This is because he says it will appeal to investors as it is “the next step away from fund of funds”.