Specialist hedge fund company ORN Capital has appointed Cushman & Wakefield Finance Ltd to raise up to $100m (74.3m) for its Global Property Derivatives Fund. The new fund represents the first vehicle able to bring the global real estate and hedge fund sectors together, a move that is facilitated by the rapidly developing property derivatives market. The fund is open-ended and will not invest directly in physical property says C&W. To date, the fund has indicated commitments of $50m.
ORN Capital, which is majority owned by Morley Fund Management, was founded in 1999 as a specialist hedge fund company that manages funds on behalf of a wide variety of investors including pension funds, funds of funds, private banks, and family offices. Both ORN Capital and Morley are part of Aviva Plc, the world's fifth largest insurance company.
The ORN Global Property Derivatives Fund will take advantage of previously unexploited inefficiencies in global property markets as property derivatives enable investors to hedge the returns of the physical market for the first time. Capital growth will be possible irrespective of the returns in the underlying property markets.
The investment strategy will follow a disciplined investment process to identify relative value opportunities between different property markets, sectors and instruments.
"This Fund sources new and uncorrelated returns from property at a time when the cycle is fairly mature," said Alex Dewey, of Cushman & Wakefield BGC, which was launched in July 2006 and is a joint venture between the European finance arm of Cushman & Wakefield and leading inter-dealer brokerage firm BGC International.
"The Fund's ability to generate high returns combined with low volatility regardless of underlying market returns provides an excellent investment opportunity," Dewey explained.
Source: Cushman & Wakefield