Commerzbank Launches New Fund Of Hedge Funds

by Carla Johnson, InvestorsOffshore.com, London

09 July 2001

Germany was the first national market inside the EU to crack the problem of how to market hedge funds to retail investors without falling foul of the regulators. Their solution was to package hedge funds into 'funds of hedge funds' and then to offer units in such funds - even so, it was said at the time that it had taken dozens of lawyers many months to construct a regulator-proof offering.

Now, after two successful hedge fund of fund launches, Commerzbank Securities' Alternative Investment Strategies (AIS) unit is about to launch its third fund of hedge funds in the autumn.

The first two launches, COMAS I and COMAS II, in February 2000 and February 2001 have proved very successful, and Commerzbank is now going to roll out COMAS Plus, targeted at institutional and high-net worth investors. COMAS Plus will offer investors montly liquidity, and Commerzbank Securities plans to create liquidity for unit-holders by offering a marketmaking service on a monthly basis.

AIS chief Kevin Ferro said: "Our pure absolute return products, COMAS I and II, have successfully demonstrated that a properly designed and managed fund of hedge funds can deliver attractive, low correlation returns with a fraction of the volatility of major equity and bond benchmarks. With COMAS Plus we intend to offer our clients a higher return target while attempting, as always, to minimise risk."

AIS will actively manage COMAS Plus' investment strategy through the independent selection of a group of hedge funds from around the world.

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