Credit Suisse puts twist on hedge indexing

Date: Thursday, June 28, 2007
Author: Chris Nicholls, Financial Standard

Credit Suisse has launched a new indexed leveraged hedge fund, with a unique daily liquidity feature and exposure to multiple hedge fund strategies and managers.

The Credit Suisse/Tremont Index Strategies Fund, which opened two weeks ago, provides retail investors with access to the Credit Suisse/Tremont hedge fund index of more than 5,000 hedge funds, and offers an option of daily investments and withdrawals, subject to maintaining the minimum balance of $25,000.

The underlying Credit Suisse/Tremont Hedge Index Tracker fund invests in a diversified portfolio of open and closed hedge funds from ten major hedge fund strategies and recently raised US$1.1 billion from investors.

Alex Haynes, national research and platform manager, said the product had been well received from both planners and institutions, and was due to extensive industry consultation at the concept stage.   

Haynes took aboard strong feedback about “in particular, the frustration many financial planners had with accessing hedge funds via platforms, due to the problems surrounding liquidity and the time, for example, it can take for those hedge funds to produce a tax statement – upwards of three months.

The product has gone down well due to its passive nature and therefore lower cost structure, Haynes said.

“Some feedback was that they found many of the current structures in the Australian marketplace very complex and very difficult to communicate to their clients, and they felt the passive, index approach to hedge fund exposure was very attractive.”  

The fund is available directly from Credit Suisse and will be available via MasterKey Custom Investment Service & Self Managed Super Service, as well as BT Wrap from July 2007, with three other major unspecified platforms to follow.

Chris Nicholls