Unigestion to launch two funds of funds
Swiss asset manager Unigestion is launching two funds of funds, one investing in hedge and private equity funds, the other in Asian-based funds.
It has seeded its Distressed Hybrid Fund of Funds with €30m ($47.1m) and will launch it this week. It aims to raise up to $750m (€477m), and invest in 10 to 15 funds. The fund’s investment committee, headed by Unigestion’s chairman Bernard Sabrier, will call on investors’ capital over the 24 months after the fund’s first closing, expected in late summer, as the committee sees investment opportunities.
Jean-François Hirschel, Unigestion’s head of marketing, said: “When we exit underlying funds we will distribute capital to our investors.” He said Unigestion expected to sell funds amounting to about half its total portfolio within three to four years of starting, and return investors their initial outlay and any gains. The balance will remain in the product.
The firm said repricing of risk, increased credit spreads and rising default rates indicated another distressed cycle. Securities related to the mortgage markets were already at “highly distressed prices”, he said. “Over the next 18 to 24 months, the market dislocation is expected to impact the US corporate market in leverage loans and high yield, followed by the European markets in credit, mortgages and loans, real estate and finally private equity transactions worldwide.”
Hirschel added: “The distressed cycle we are expecting now will be more like what we experienced in 1991 rather than like 1998 and 2002. We believe distressed opportunities will come in 2009, and the next cycle will be tougher. We have structured this fund to try to get the best of what is available.”
The fund will invest in funds which invest in distressed consumer and commercial credit, corporate loans, mortgages, high yield debt, distressed private equity, mezzanine debt and distressed real estate.
Stefan Pizzo, Unigestion’s Asia managing director, said Unigestion is also to launch a fund of Australasian hedge funds which will invest in long/short equities funds, funds investing in macro-economic trends and futures markets and arbitrage strategies.
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