UK manager plans hybrid fund of funds

Crystal Partners is looking to raise $300m for a fund of fund that will build a portfolio of private equity and hedge fund investments.

Crystal Partners & Co, a London-based fund manager, is launching a multi-strategy, multi-asset class fund of funds. According to a press release, the fund has a target size of $300 million and will invest in both private equity and hedge funds.
The firm, which is awaiting approval for the launch from the Financial Services Authority, said in the release that the fund would aim to dampen volatility and deliver consistent long-term rates of return. Crystal intends to deliver an annual return of 14 to 16 percent, 'regardless of prevailing market conditions'.
'At a time of economic uncertainty and volatile equity markets, many qualified investors are looking beyond the traditional mix of investments to maximise returns and further diversify their portfolios,' Roger Wilson, the firm's head of alternative Investments, was quoted as saying. 'Thus they are recognising the advantages of using a variety of alternative asset classes to mitigate the effects of a down market.'
Crystal plans to invest in around 40 funds. Of these, 10 to 15 will be private equity partnerships of various strategies. The fund will also invest in between 20 to 25 hedge funds using more than 12 strategies including event-driven, short-selling and emerging-markets.
Geographically, the fund will divide its investments between North America (35 percent), Western Europe (30 percent), Asia Pacific (15 percent) and emerging markets (20 percent).
The minimum investment will be $100,000, and shares can be subscribed, switched or redeemed on a monthly or quarterly basis. Crystal will charge a 1 percent annual management fee and an incentive fee of 10 percent.
Crystal claims to have already attracted interest from a range of institutional investors in North America, Europe, Asia and Africa.

A spokesperson for the firm declined to elaborate further, citing FSA regulations.

In the press statement, Crystal describes itself as a business organised to provide “value-oriented asset management and innovative investment banking services”.