The ZEDRA Fiduciary Investment Fund, an open-ended structure based in Jersey, has launched with the aim of addressing a range of issues faced by trustees charged with overseeing smaller client mandates, where the cost of appointing or changing a fund manager can often be prohibitive.
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%. In designing the fund, Zedra has sought to focus on delivering a low fee structure.
Zedra will appoint and monitor the performance fund managers using tried and tested methodologies it already applies to the £7bn of client access currently under its control. Assets can be switched between managers within the Fiduciary Investment Fund, minimising transition costs, which may also be beneficial for tax planning in certain client scenarios.
Mike Farley, managing director of Zedra Fiduciary Investment Services said: “If a trustee has £50m to invest, you can allocate your financial assets between two or three different investment managers, to reduce manager risk and still have sufficient assets to negotiate competitive costs at the manager level.
“This is more problematic, if your trust fund has £3m 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 to benefit from lower ongoing management charges as the collective assets of the fund are significant. 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”.
The Zedra Fiduciary Investment Fund is currently only available to clients of the Zedra Group and more specifically Sterling investors.
However Rob Lucas, director of Zedra fund services, added: “We have already seen a lot of interest in this innovative approach to managing fiduciary assets and therefore anticipate launching a US dollar version and also opening the fund to other service providers in due course.
The fund was launched on 1 August and has assets in excess of £250m.