Gulf Bank Launches Capital-Protected Hedge Fund

by Lorys Charalambous, Investors Offshore, Cyprus

08 July 2002

Gulf International Bank (UK) Limited has announced the launch of the Falcon Capital Protected Relative Value Fund on 1st July 2002. The Fund, which combines investment in GIB’s Relative Value investment strategies with 100% capital protection at maturity, has attracted over $30mn for its first share series. Further series will be made available to investors in the coming months.

The Fund has been tailored for a wide range of investors in the Gulf and beyond, and is marketed specifically to those who are seeking to enter the equity market and enjoy the potential for medium-term capital growth, regardless of whether stock markets go up or down and without risk of loss of capital. The structure also allows investors liquidity on a monthly basis.

The Asset Management Division of GIB has developed the Relative Value investment strategies utilised by the Fund over the last 10 years. The success of these strategies has been illustrated by the performance of the Falcon Relative Value Fund, a market neutral multi-strategy hedge fund based on the same Relative Value investment strategies which has produced an average annual return since inception of 23% and a return of 6% in the last 12 months. The same London-based team, David Waite, Peter James and Paul Harrison that manage the Falcon Relative Value Fund, will manage the new Fund. The objective of the strategies is to produce a return in excess of 3 month USD LIBOR and their nature allows for investment returns regardless of the prevailing equity market environment. The Capital Protection element is being provided in conjunction with Barclays Bank Plc.

David Waite, Head of Asset Management, at GIB said today “The Falcon Capital Protected Relative Value Fund is further evidence of the strength of GIB as a leading provider of investment products in the Gulf region. This innovative investment product allows investors exposure to the highly successful market neutral relative value strategies with the comfort of a Barclays-backed capital protection at maturity after 5 years.

A month ago, Gulf International Bank received the award for Best Fund in the category of "Event Driven, Single Manager Fund" at the European Hedge Fund Performance Awards 2002 held in London for the Falcon Relative Value Fund.

Gulf International Bank is a leading merchant bank in the Middle East with its principal focus on the GCC states. Its leadership position is based, inter alia, on an in-depth knowledge of the Gulf market and the provision of financial services that are tailored to satisfy customer needs. Corporate finance, project finance and asset management are particular areas of emphasis. The bank's financial strength is based on conservative asset and liability management policies, its high-quality asset profile and strong capital base. GIB had total assets in excess of US$15 billion as at 31st December 2001.

The six Gulf Cooperation Council (GCC) governments equally own 72.5 per cent of GIB, while the Saudi Arabian Monetary Agency (SAMA) and J. P. Morgan Overseas Capital Corporation own 22.2 per cent and 5.3 per cent respectively. The GCC states are Bahrain, Kuwait, Qatar, Oman, Saudi Arabia and the United Arab Emirates.

Gulf International Bank (UK) Ltd is responsible for the management of client assets valued in excess of US$7 billion of which US$250 million is in mutual funds. The Funds managed by GIB within the Falcon suite include the Relative Value Fund, Capital Protected Relative Value Fund, Trend Selection Fund (Futures and FX), the US$ High Yield Fund (Corporate Debt), Emerging Market Bond Fund, Euro High Yield and the Global Rights II Private Equity Fund.

Gulf International Bank (UK) Limited, a subsidiary of Gulf International Bank BSC, is incorporated in England and Wales and is regulated by the Financial Services Authority.

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