Key Takeaways
- • Forsyth Partners launched the Alternative Strategies Series One – Income Generator Note, a capital-protected fund of hedge funds with a Dublin registration and May 20, 2004 closing date, requiring a minimum investment of $50,000.
- • The fund guarantees return of original capital regardless of underlying hedge fund performance, with tiered returns: Years 1-5 offer the greater of 2% income or 50% growth in underlying funds semi-annually; Years 6-10 offer 50% growth semi-annually (provided the portfolio remains above initial levels).
- • Fee structure consists of 2.5% annual management fee, 20% performance fee, 4% initial commission, and 0.5% renewal commission, reflecting typical alternative investment pricing from the period.
- • The fund provides diversified exposure across multiple hedge fund strategies including long-short equity, global macro, and market-neutral approaches, managed as a fund of funds with cash allocation.
- • Forsyth Partners simultaneously expanded its broader alternative strategies product suite, launching the Bermuda-domiciled Forsyth Managed Strategies Funds, a multi-asset class range offering lifestyle-focused risk options (Cautious, Balanced, and Aggressive) alongside a dedicated 100% hedge fund allocation fund.
Summary
Forsyth Partners expanded its alternative investment product offerings in May 2004 with the launch of the Alternative Strategies Series One – Income Generator Note, a capital-protected fund of hedge funds targeting both income and growth. The vehicle, registered in Dublin with a €50,000 minimum investment, represented a structured approach to hedge fund exposure designed for investors seeking capital preservation alongside upside participation.
The fund's structure incorporates a ten-year term with a full capital guarantee, ensuring investors receive their original capital regardless of underlying fund performance. The return mechanism is bifurcated: during the first five years, investors receive the greater of 2% income or 50% of growth in the underlying portfolio every six months; from years six to ten, returns are capped at 50% of portfolio growth semi-annually, provided the underlying portfolio remains above its initial value. This tiered approach balances early-period income generation with later-stage growth participation while maintaining downside protection.
The fee structure reflects standard alternative investment industry practices for the period: annual management fees of 2.5% coupled with a 20% performance fee, plus an initial commission of 4% and renewal commission of 0.5%. The fund constructed its portfolio using a diversified mix of hedge fund strategies, including long-short equity, global macro, market-neutral, and convertible arbitrage exposures, with cash allocation to support the capital protection guarantee.
Concurrently, Forsyth Partners introduced the Bermuda-domiciled Forsyth Managed Strategies Funds, a broader alternative strategies product line designed on a fund-of-funds basis. This multi-asset class range addressed institutional demand for lifestyle-based investment solutions by offering three risk-tiered options—Cautious (low risk), Balanced (medium risk), and Aggressive (high risk)—alongside a dedicated hedge fund allocation product with 100% exposure across diversified hedge fund strategies. The product suite, available in USD, EUR, and GBP, reflected third-generation fund management philosophy emphasizing tailored solutions based on risk-return parameters rather than relative benchmark performance.
The fund's structure incorporates a ten-year term with a full capital guarantee, ensuring investors receive their original capital regardless of underlying fund performance. The return mechanism is bifurcated: during the first five years, investors receive the greater of 2% income or 50% of growth in the underlying portfolio every six months; from years six to ten, returns are capped at 50% of portfolio growth semi-annually, provided the underlying portfolio remains above its initial value. This tiered approach balances early-period income generation with later-stage growth participation while maintaining downside protection.
The fee structure reflects standard alternative investment industry practices for the period: annual management fees of 2.5% coupled with a 20% performance fee, plus an initial commission of 4% and renewal commission of 0.5%. The fund constructed its portfolio using a diversified mix of hedge fund strategies, including long-short equity, global macro, market-neutral, and convertible arbitrage exposures, with cash allocation to support the capital protection guarantee.
Concurrently, Forsyth Partners introduced the Bermuda-domiciled Forsyth Managed Strategies Funds, a broader alternative strategies product line designed on a fund-of-funds basis. This multi-asset class range addressed institutional demand for lifestyle-based investment solutions by offering three risk-tiered options—Cautious (low risk), Balanced (medium risk), and Aggressive (high risk)—alongside a dedicated hedge fund allocation product with 100% exposure across diversified hedge fund strategies. The product suite, available in USD, EUR, and GBP, reflected third-generation fund management philosophy emphasizing tailored solutions based on risk-return parameters rather than relative benchmark performance.
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