Independent investment manager Aros Capital Partners, a London-based Anglo Danish company, has launched Aros Paradigm Fund SICAV, a single strategy global asset allocation fund.

Both the fund vehicles and management company are domiciled in the European Union, making it a complete onshore hedge fund structure but not constrained by Ucits III. The structure has gained the approval of three regulators – teak Financial Services Authority (FSA) regulating the sub-adviser, the Maltese Financial Services Authority (MFSA) which regulates the investment fund and manager and the Danish regulator (Finanstilsynet).

The founding team behind the company consists of Nicolai Borcher Hansen, Peter Brink Madsen, Christian Falster and Jacob Madsen. Three of the founders recently broke away from Denmark’s largest privately owned asset manager, Formuepleje.

Formuepleje Safe, a fund that is directly comparable with the Paradigm Fund, returned 0.74% a month on average compared to the MSCI World 0.33%, the CS Tremont HF MS 0.25% and CS Tremont HF Global Macro 0.58% in the 53-month period the team ran it.

The team has five-year audited track record in investment strategy on which Paradigm Fund is based. They grew the company from $750 million in assets under management, to $4 billion in over five years creating Denmark’s largest independent asset manager in the process.

The fund is an open-ended vehicle aimed at high net worth individuals and institutional investors. The investment strategy is based on a proprietary dynamic asset allocation model, aiming to create an investment with the highest risk adjusted return.

Citco Fund Services in Dublin has been appointed as fund administrator. Bedrock RealTime, the outsourced operator, runs additional shadow accounting and will strike a ‘soft’ net asset value daily. This system of two independent parties providing checks and balances should provide The management fee is fixed at 1.25% a year with a 10% performance fee with no hurdle.

The fund plans to launch November 2, targeting an annual return of 10%-12% a year over three years.

The asset allocation of the fund is based on modern portfolio theory grounded in theoretical understanding but applied through practical experience and with a value bias

It will invest in global bonds and equities with a focus on large caps, Danish mortgage bonds, foreign exchange and derivatives. It intends to take about 50 long and 10-15 short positions in equities, 30 bond positions, 15 Danish mortgage bonds and 4-5 currencies.

The fund offers monthly liquidity with 30 days redemption period notice. Minimum investment: €75,000.

Prime broker is UBS in London with Ernst & Young as auditor.

The fund can be leveraged two times with a minimum of 33.3 % solvency.