Innocap Investment Management Inc., a subsidiary of National Bank of Canada (TSX:NA) and BNP Paribas, is pleased to announce that they have signed the first license issued by MSCI to use the MSCI HF Composite Index as a basis for funds that synthetically track the performance of the index. This license agreement completes the roll out of the Innocap family of replication products that was launched in July 2007. Innocap developed a diverse suite of funds, each of which has a clearly defined objective. Salto MSCI HF Composite Synthetic Tracker aims at minimizing the tracking error with the reference index while Verso MSCI HF Composite Short Synthetic Tracker offers a short version for hedging purposes. Dosalto MSCI HF Composite Leveraged Synthetic Tracker will soon be launched to offer a 2X leveraged version of Salto. All products are offered to accredited institutional investors through a Malta based vehicle (Sub-Funds of NBCG Fund SICAV p.l.c.), for which Innocap acts as investment advisor.
Martin Gagnon, Co-CEO of Innocap said: “Innocap developed what we believe to be the most advanced algorithm currently available on the market to track HF indices using liquid factors. We use a sophisticated filter specifically designed for tracking complex trajectories, allowing the products to be very robust and highly adaptable to changes in market conditions. Moreover, the algorithm handles more than 15 factors and allows non-linear exposure dynamics. It represents a new generation of products tracking HF returns.”
Innocap believes that synthetic HF index trackers should be offered at extremely attractive terms and conditions. This is why these tracker funds are offered for a very low management fee, with daily NAV calculation as well as daily liquidity and transparency to the underlying exposure for investors.
Innocap chose to replicate the MSCI HF Composite Index. Not only does it have a very attractive risk-return profile in the industry, but it is also a more robust index with a very rigid reporting methodology. “We are delighted that Innocap has chosen the MSCI Hedge Fund Composite Index for their family of synthetic tracker funds,” said Henry Fernandez, Chairman and CEO of MSCI Barra.
Jacques Vigner, Global Head of Structuring at BNP Paribas Equities & Derivatives added: “We believe that Innocap's product represents the leading edge in the replicators currently available on the market. We intend to offer it to our clients in different structured products as it offers great flexibility at an attractive price.”
Potential investors and clients interested by these products can contact Innocap at 514-390-5709.
Innocap is the end result of 11 years of investments in hedge fund strategies for the National Bank of Canada. Innocap acts as advisor to National Bank and others in connection with alternative investment activities and is currently investment advisor for almost USD 3 billion in hedge fund mandates. Innocap's managed account offering increases the user's control over assets since all accounts at the prime brokers, future clearers, counterparties and bank accounts are opened in the name of Innocap's clients. This structure allows for the complete ownership of positions; no money is invested directly in the managers' hedge funds. For more information, go to www.innocap.com
About National Bank of Canada
National Bank of Canada is an integrated group which provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. The National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank of Canada has more than $120 billion in assets and, together with its subsidiaries, employs 16,908 people. The Bank's securities are listed on the Toronto Stock Exchange (NA: TSX). For more information, visit the Bank's website at www.nbc.ca.
About BNP Paribas
BNP Paribas (www.bnpparibas.com) is a European leader in global banking and financial services and is one of the 5 strongest banks in the world according to Standard & Poor's. The group is present in over 85 countries, with 161,000 employees, including 125,000 in Europe. The group holds key positions in three major segments: Corporate and Investment Banking, Asset Management & Services and Retail Banking. Present throughout Europe in all of its business lines, the bank's two domestic markets in retail banking are France and Italy. BNP Paribas also has a significant presence in the United States and strong positions in Asia and the emerging markets.
About MSCI Barra
MSCI Barra is a leading provider of investment decision support tools to investment institutions worldwide. MSCI Barra products include indices and portfolio analytics for use in managing equity, fixed income and multi-asset class portfolios. The company's flagship products are the MSCI International Equity Indices, which are estimated to have over USD 3 trillion benchmarked to them, and the Barra risk models and portfolio analytics, which cover 56 equity and 46 fixed income markets. MSCI Barra is headquartered in New York, with research and commercial offices around the world. Morgan Stanley, a global financial services firm, is the majority shareholder of MSCI Barra. For further information on MSCI Barra, please visit their web site at www.mscibarra.com.