The Bennelong Kardinia Absolute Return Fund planned to release a product disclosure statement in about two months, allowing it to open the fund to retail investors, co-portfolio manager Mark Burgess said yesterday.
Burgess said the fund, available only to the wholesale market, had an information memorandum that required a minimum investment of at least $500,000.
“At the retail level, you really want to have a much lower entry threshold. We haven’t decided on what that number is going to be, but you’re talking about a number like $10,000 to $25,000 rather than that $500,000 level,” he said.
Burgess manages the fund with Kristiaan Rehder. Both joined Bennelong Funds Management from Herschel Asset Management in a move Bennelong announced six weeks ago.
The fund contains $16 million.
Asked about the fund’s ideal size, Burgess said: “We are targeting a soft close of $500 million, but if the fund size starts to detract from the performance of the fund, we’d close it a lot earlier.”
Previously known as the Herschel Absolute Return Fund, the product was launched in mid-2006 and has achieved an annualised return of 16.26 per cent.
“We’re pretty confident that we could comfortably manage $500 million, but for us the most important thing is the performance of the fund, not the size of the fund. If we got to $250 million and felt that it was big enough, we’d have no hesitation in closing it at that stage,” Burgess said.
He said he was confident of retail acceptance of the fund.
“Bennelong has four full-time business development managers and they’re reporting an increased interest and awareness in the absolute return space,” he said.
“Investors are looking at the returns achieved by some of these alternative equity strategies over the last three to five years through very volatile market periods and are attracted by those returns and are feeling more comfortable with some of these strategies.”
