ZEDRA Jersey has launched the ZEDRA Fiduciary Investment Fund. The Fund addresses a gap in the market for an investment solution built for trustees. The structure is highly innovative and offers reduced asset manager risk and reduced portfolio volatility.
The Fund is suitable for trustees wanting to ensure that trust assets are invested in a safe and secure fashion and benefit from best of breed investment management. The fund is an open-ended fund based in Jersey.
The innovative structure and design of the ZEDRA Fiduciary Investment Fund is the attraction for those charged with ensuring trust assets are invested in the most appropriate manner, with a focus on reducing manager risk and lowering costs. There are currently two sub-funds, both with a medium risk strategy with one aimed at total return investors and the other more considerate of generating a stable income flow, currently targeting a yield in excess of 3%. The sub-fund assets are managed by some of the best investment management houses in the marketplace, with each being appointed to meet the specific investment objective of the sub-fund.
Unlike other multi-manager funds, ZEDRA are not making any investment decisions or asset allocation calls; however, clients will profit from their manager selection expertise. Investors will benefit from a diversification of the management process and style as well as a diversified underlying portfolio. In addition, when appropriate, assets can be switched between managers within the ZEDRA Fiduciary Investment Fund, minimising transition costs. In some jurisdictions this may also be beneficial from a capital gains tax perspective.
Against a backdrop of regulatory and market pressures increasingly weighing on Jersey’s finance industry, the funds sector has continued to grow and attract new business helping the Island to maintain its reputation as a leading international finance centre. The new ZEDRA fund is more good news for Jersey and a sign of ZEDRA’s confidence in the jurisdiction.
Mike Farley, Managing Director of ZEDRA Fiduciary Investment Services, says: ‘The launch of the Fund is great news for ZEDRA and also for Jersey. We developed the Fund because we saw the need for an investment solution built for trustees, which isn’t constrained to one investment manager’s process where you are tied to a specific strategy and style.
‘If a trustee has £50 million to invest, you can allocate your financial assets between two or three different investment managers, to reduce manager risk, and still have sufficient assets with each manager to be able to negotiate competitive costs at the manager level. However, this is not so easy if your trust fund has £3 million or less to invest. This is where our new Fiduciary Investment Fund comes in: it allows trustees to reduce active manager risk and, in turn, portfolio volatility, but also benefits from lower ongoing management charges as the collective assets of the Fund are significant.
‘As ZEDRA is not making any active investment decisions, we have been able to price the Fund very competitively for our clients. History shows that minimising costs feeds directly through to performance and compounds into higher net returns.’
The ZEDRA Fiduciary Investment Fund is currently only available to clients of the ZEDRA Group and, more specifically, Sterling investors. However, Andy Cunningham, Director of ZEDRA Fund Services, added: ‘We have already seen a lot of interest in this innovative approach to managing fiduciary assets and anticipate launching a US Dollar version and also opening the fund to other service providers in due course. The appointment of individual investment managers today is becoming more and more expensive for trustees and can often be a reason why a trustee will stay with an underperforming manager rather than switch elsewhere – clearly not always the right solution for the trust and its beneficiaries. The ZEDRA Fiduciary Investment Fund overcomes this dilemma.’
The Fund was launched on 1st August and has assets in excess of £250m. ZEDRA were advised by Martin Paul of Bedell Cristin. The ZEDRA Fiduciary Investment Fund Limited, ZEDRA Fund Services Limited and ZEDRA Fiduciary Investment Services Limited are regulated by the Jersey Financial Service Commission.