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Barclays Capital Launches Hedge Fund Options

by Phillip Morton, Investors

20 December 2006

Barclays Capital, the investment banking division of Barclays Bank PLC, has announced that it will offer its clients call options on bespoke baskets of hedge funds on an independent platform.

Clients can build a basket of between 5 and 10 hedge funds from those listed on the HFR Manager Select platform. The platform currently lists over 100 hedge funds across a range of strategies.

This product provides institutional and High Net Worth clients with a new way of gaining exposure to specific hedge funds, allowing them to build a concentrated basket or express a view on a particular strategy. The options will be available in Euros, US Dollars, Pounds Sterling, Yen and Swiss Francs, with a minimum dealing threshold of US$500,000 and will initially have maturities from three to five years.

Frank Gerhard, Head of Fund-linked Derivatives Product Strategy at Barclays Capital, commented: "Barclays Capital is committed to providing investors with innovative ways to gain exposure to hedge funds. The creation of new derivatives products is particularly important in a market where tactical investment in structured products linked to concentrated hedge fund baskets is still hampered by slow turn-around times and cumbersome negotiations. We are confident that a flexible and more efficient solution will be extremely attractive to investors."

Antti Suhonen, Head of Fund-linked Derivatives Structuring added: "Last year, Barclays Capital pioneered a service providing transparent pricing on tradable options on the HFRXGL Index, creating a new industry benchmark. This new initiative on the Manager Select platform is a natural continuation of our efforts to add transparency, liquidity and investor choice in the alternative investment market by extending the availability of option products to more focused strategies in line with the shifts in investor demand that we are witnessing. The HFR platform is well suited for this purpose."

Joe Nicholas, chairman and chief executive of HFR Asset Management, observed: "The creation of the Manager Select Basket Option Programme on HFR’s managed account platform is yet another important milestone in the development of accessible practical products that permit useable exposure to Hedge Fund returns, when the search for efficient access to alpha sources in a reliable risk environment is stronger than ever. Again, Barclays Capital has underlined its position as one of the most forward thinking players in the fund structuring market."

A comprehensive report in our Intelligence Report series examining offshore investment, offshore stock exchanges, and hedge funds is available in the Lowtax Library at and a description of the report can be seen at

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