Sky Fund LLC (Sky Fund), a regulated US asset management firm, reports that it has entered into an index advisory agreement with a European bank rated ‘A’ by S&P and Fitch Ratings. Sky Fund says it is the Index Adviser and the bank is the Index Sponsor of a new actively-managed index of liquid alternative UCITS funds called SkyRank Navigator. The index is priced by an independent pricing agent with headquarters in Frankfurt, it adds. The index is actively managed by Sky Fund and the bank is issuing a principal protected index linked note.
Sky Fund and the issuing bank have launched a 10-year note that is linked to the performance of the SkyRank Navigator Index. The note pays 2X the performance of the Index, in excess of three-month libor, 100 percent principal protected at maturity and has weekly liquidity. The pricing of the index may be accessed using the Bloomberg Symbol, IND1SKYX, and ISIN Code XS1212302670.
Sky Fund founder and CEO Joseph Omansky, a contributor to the securities financing roundtable in the upcoming issue of International Securities Services magazine, says the SkyRank System - which primarily utilises a System of Hedge Fund Ratings, a US patented technology - identifies single funds, funds of funds, and liquid alternative funds that consistently produce high risk adjusted returns over time.
He calculates that Sky Fund's SkyRank System today analyses over 15,000 funds and liquid alternative funds on a continuous basis analyzing which funds are optimal to add and suboptimal to remove from the index in order to produce the highest volatility-adjusted performance. “SkyRank was created specifically with pension funds and insurance companies in mind, and I believe if applied universally, it can help to eradicate pension fund shortfalls,” Omansky adds.
The note will be distributed primarily in two ways to accredited and qualified non US investors. The first is through offshore life insurance policies in Cayman and Bermuda. The second is through direct investments from offshore wealth advisers.
The Principal Protected Note is available as a portfolio choice through Red Gate, an innovative life insurance policy. John Chon, CEO of Red Gate Capital said: “Our client base always looks primarily at capital preservation, secondly consistent performance and finally fee transparency. We have been able to achieve all of the above through SkyRank’s innovation of structuring an actively managed UCITS Index with a high participation level and 100 percent principal protection. We are delighted to have this product as our main portfolio choice for our investment linked insurance policies and to our balance sheet clients.”
Red Gate Financial is a life insurance and risk management company which creates products for high net worth individuals, corporates and insurance companies.
Peter Urbani, a portfolio manager at Sky Fund added: “The Index is designed to have low volatilty and for the past three and half years has exhibited volatility below that of Barclays Aggregate Treasury Bond Index. Products linked to the index are appropriate for institutions seeking out low volatility, stable performing investments, like pensions, insurance companies, endowments and ultra high net worth investors who are interested in preserving their capital while growing it in a stable, predictable manner and those who want no risk of capital loss."
