Financial Products
Institutional Profit Sharing Arrangement ("PSA")
This service is designed for institutional investors (i.e. those managing minimum investible funds of $10.0 million) seeking high absolute returns from active trading. It is not a managed fund, rather a service that Oceans18 will perform with the monies of the investor, without pooling those funds in a unit trust or corporate structure.
The PSA is suitable for institutional investors that are comfortable with the alternative asset / hedge fund sector - primarily, investors that are comfortable with exposure to the volatile, trading dependent returns that will be associated with the PSA’s unique trading strategies.
In addition, institutional investors should see the PSA’s risk profile being at a high level, given that returns will be totally dependant on Oceans18's trading success, rather than the accumulation of any interest, dividends, rent or capital growth. Notwithstanding this, the PSA will follow strict money management rules designed to alleviate investor downside risk, while maintaining sufficient upside potential to be true to a “high absolute return” label.
The PSA allows investors to withdraw capital and earnings from the service on a quarterly basis. The profit sharing arrangement that is entered into by each investor is triggered when sufficient earnings have been generated to replace 100% of the investor's initial commitment, allowing that capital to be withdrawn in full. Details of the profit sharing arrangement will be discussed with potential investors upon receipt of an expression of interest.
Administration is the responsibility of both parties to the PSA. Administration can be conducted by either party, jointly, or outsourced, as mutually agreed.
Traditional Wholesale Fund ("TWF")
This product is currently in development and will take advantage of the same core trading strategies as the PSA, while utilising a unti trust structure.
The TWF is designed for high net worth, sophisticated investors (as defined in the Corporations Act) that seek high absolute returns with active management, while at the same time being comfortable with exposure to the alternative asset / hedge fund sector.
Investors in the TWF will have to accept the higher volatility associated with the fund’s trading strategy. In addition, investors should see the fund’s risk profile being at a high level, given that returns will only be derived from trading, not interest, dividends, rent or capital growth. Notwithstanding this, the fund follows strict money management rules designed to alleviate investor downside risk, while maintaining sufficient upside potential to be true to a “high absolute return” label.
The fund will be independently and externally administered by a ASIC licensed entity.
The TWF will allow for monthly contributions, with withdrawals, distributions to investors and performance fees to the manager on a quarterly basis. The unit price will be updated by the administrator on a weekly basis. A particularly attractive feature of the TWF will be the absence of any management fee, with the investor to only pay a performance fee to Oceans18 if and when the fund meets minimum return criteria.
|