Alpinvesta Asset Management SA is a Swiss based research and investment analysis company that designs sophisticated investment vehicles for private and institutional investors. Alpinvesta has established partnerships with some of the worlds leading experts in their respective fields to provide leading edge products to its clients who are both private individuals and institutions.

Switzerland remains home to many of the worlds most successful asset managers and is the legal base for Alpinvesta Asset Management SA. It remains one of the worlds most stable, highly regulated and successful international financial centres, providing Alpinvesta with immediate access to both investment managers and in depth research.

Alpinvesta has focused on providing investment products that carry with them a capital guarantee. The skill here is to build what is undoubtedly a complex underlying product into a simple structure that private investors both understand and are comfortable with in their portfolios. There are a wide variety of different types of capital protected products in the market place, and one of Alpinvesta’s corporate partners is BNP Paribas, a leading financial institution in Europe with a AA rating from Standard and Poors. Alpinvesta has recently launched the second series of its successful 180 Protected Notes which are issued by and have protection provided by BNP Paribas.

To all intensive purposes these investment products appear to be unitised funds but are in fact referred to within the industry as “European medium term notes”. Whenever any private investor purchases a capital guaranteed product, their first question should be who is providing the guarantee and what their financial strength is. Alpinvesta has chosen to partner with their AA rated bank which means that the capital protected notes are in turn AA rated and your guarantee is as good as the financial stability of the bank from which you receive the offer of capital protection.

Capital protected products typically run for between four to 12 years, with many longer term products having lower volatility and a greater chance of enhanced capital return. Ultimately the return on any capital protected product will depend upon the basket of underlying investments which are guaranteed. In the case of the Alpinvesta 180 Protected Note, we have used two large liquid and transparent hedge fund indices from Dow Jones and Hedge Fund Research, along with one of the most well known managed futures funds, Winton. The combined assets for these three underlying strategies are in excess of 6 billion US dollars reflecting not only their popularity, but also the liquidity which is essential for the bank providing the capital guarantee.

Typically a lower risk capital protected product like Alp 180 would target a return of 10-12% per annum, whilst higher risk more hedge fund strategies perhaps with a level of gearing, would like the 180 PLUS note be targeted at 16-18% per annum.

It is worth briefly mentioning why an investor might consider including hedge funds within their portfolio. There are many different types of hedge funds in existence and Alpinvesta use two primary types, a multi manager hedge fund/index, and a managed futures fund.

The multi manager approach is simply a structure whereby a manager or in this case a large well known index company, chooses and manages asset allocation based upon 40 to 80 different underlying hedge funds. By mixing together different hedge funds with varying underlying strategies the target is to produce a fund that has a lower volatility in existing directly in equities, and a much smoother return. For instance multi manager hedge funds have achieved a return of more than 10 percent per annum of the past ten years in a smooth steady fashion by virtue of the underlying hedge funds to make money in both rising and falling markets. Many people say with hedge funds that it is what they do not loose when the markets fall compared with the volatile equities, that enables them to outperform long only equities over the medium term.

Within the Alpinvesta 180 Protected Note we combine two low volatility absolute return hedge fund indices from Dow Jones and HFR with quite a high volatility high return fund – Winton’s Managed Futures Fund. This type of fund takes positions across a variety of stocks, bonds, currencies and commodities in order to benefit from trends that they identify. Winton has achieved an annualised return in excess of 21% per annum over the past eight years and whilst it is quite a volatile strategy, it is ideal when combined with low volatility low multi manager indices within a capital guaranteed product.

I would finish off by highlighting some of the terms of the Alpinvesta 180 Protected Note and suggest areas that any investor should review carefully when selecting capital guaranteed products.

Alp 180 offers a 100% allocation with no initial up front charge with there instead being a redemption penalty which is only charged if investor’s encash before the investment has been held for five years.

In addition to the notes being issued by and protection provided by BNP Paribas, Kleinwort Benson (Channel Islands) Fund Services Ltd (which is a wholly owned bank of Dresdner bank) acts as both registrar and transfer agent, collecting funds from clients and investing them directly through BNP Paribas. This enables the client to be reassured that neither deVere’s nor Alpinvesta handle funds in any way and that the money is invested direct through BNP into the underlying hedge fund indices.

There is an 80 percent lock in feature which ensures that at maturity a minimum of 80% of the highest price ever achieved by the underlying basket of funds will be capital guaranteed. Lock in features are popular and are an important feature in reassuring clients of the banks confidence in providing capital protection.

In summary, the Alpinvesta 180 Protected Notes are suitable for a low risk investor looking for a steady capital appreciation over at least five years from a diverse basket of absolute return hedge funds. The Alpinvesta PLUS note offers an enhanced return using the same low volatility hedge fund indices, but with one for one gearing that is fixed at 3.3% for the ten year life of the note and is appropriate for the medium risk investor.

The Alpinvesta 180 Protected Note