| Mon 30 Apr 2001, 0:00 | | Magnum Global Fund Sa Limited - Media Release |
|
MAGNUM GLOBAL FUND SA LIMITED
MAGNUM ANNOUNCES MAJOR SHIFT IN DIRECTION
Listed niche financial services company Magnum Global Funds SA Limited has
announced a restructuring involving a move away from the provision of pure
hedge fund investments to customised structured products, as well as a name
change to MGF Capital Limited.
Chief executive officer Carla Fiford says MGF Capital plans to launch a number
of alternative investment products catering to the needs of corporate and
institutional clients. Hedge funds will form only a part of the broader
product offering.
Two new investment products have already been launched: the CHIS Trade Fund and
the Story Factory Film Fund (SF3).
"These new products give us a far more predictable income stream and enable us
to service a far larger segment of the sophisticated investor market," says
Fiford. "We believe there is strong demand in the market for the kind of
alternative low risk offshore investments we are launching, and these are just
the first of several other such products to follow in due course."
The CHIS Trade Fund is a low-risk fund invested in more than 15 market neutral
fund managers and a diverse investment-grade bond portfolio. Its two-tier
structure aims to achieve US dollar-based returns of 10% to 15% per annum and
will be structured as an open-ended fund, with shares being made available to
investors at net asset value of the fund from the first month of investment.
The fund has a one-year lock-up period and will generate substantial offshore
fee income for MGF Capital.
The fund's first tier is a fund of funds, with the second offering structured
trade finance facilities for approved and insured clients. The fund is designed
to provide a return that is not correlated to the market. Advisors Zurich
Capital Markets and Magnum Universal will structure the fund, while Swiss-based
Peers Trading will manage the bond account. Annalise Peers has been rated the
world's top bond manager over the past three years by S&P Micropal.
The Story Factory Film Fund (SF3) is an international co-production fund aimed
at kick starting local film production for international release. Magnum
executive director James Scott explains that SF3 will produce a total of 15
international films in South Africa over the next five years, in partnership
with Alliance Atlantis, Canada's largest and the world's 12th largest film
company. Alliance Atlantis was involved in producing award-winning films such
as Cider House Rules, Topsy-Turvy, The Red Violin, Crash and Mephisto. SF3 will
operate under the direction of The Story Factory, owned by well known local
film and television producers, Leon Rautenbach and David Selvan. The financial
managers of the Fund are MGF Capital and Letsema Investments.
SF3 will raise R330 million from South African investors and has already
received a commitment of R115 million from the Industrial Development
Corporation, contingent on the balance of the funds being raised. Scott says
discussions are well underway to raise these funds from local investors. The
minimum entry level is R5 million ($750 000). The fund expects to achieve a 22%
after tax return over seven years. There is no downside risk to this
investment, which will be guaranteed through products invested with Merrill
Lynch, JP Morgan and Deutsche Bank.
Allianz, the world's largest insurer, guarantees recoupments on all films.
"This fund is a first for South Africa," says Scott, "and offers an exciting
investment alternative with excellent dollar-based returns."
The group's private client business has been restructured to offer a
comprehensive range of complementary traditional and alternative offshore
investment products through an exclusive intermediary interface.
The decision to restructure was prompted by the realisation that Magnum's
existing business model is not appropriate for the current market, as well as
delays in removing legislative obstacles to hedge fund and alternative
investments. Fiford says this has hampered Magnum's ability to attract
investment flows to its hedge funds. Market volatility, coupled with
institutional antipathy to hedge fund investment, has also played a role. On
the other hand, lucrative opportunities have been identified in the customised
structured product arena, prompting the refocus.
Ends
ISSUED FOR : Magnum Global Funds SA Limited
CONTACT : Carla Fiford (011) 327 4944
Cell: 083 625 4791
FAX NO: : (011) 327 4945
E-MAIL : Carla@mgf.co.za
ISSUED BY : TISH STEWART PR ASSOCIATES
CONTACT : Tish Stewart (011) 325 4195
Cell: 082 433 6399
FAX NO : (011) 325-4199
E-MAIL : Tish@tspr.co.za
DATE : 30 April, 2001
