Deutsche Bank and Paulson & Co have launched a Ucits-compliant version of the flagship Advantage fund, DB Platinum IV Paulson Global Fund. It is available on Deutsche Bank’s Platinum platform.

The Ucits fund is linked to the performance of a synthetic managed basket. The components of the basket are selected by Paulson using an adapted version of its Advantage strategy but modified to comply with Ucits regulations.

Event arbitrage is the core strategy in the basket. This includes event situations such as mergers, distressed and special situations on the long and/or short sides and through debt and equity. The fund aims to deliver returns that are uncorrelated to broad financial markets.

The Paulson Advantage Fund has an annualised return of 22% since inception. The Ucits fund, however, does not provide exposure to the Advantage fund.

There will be significant differences between the Paulson Advantage Fund and DB Platinum IV Paulson Global Fund because of the restrictions Ucits rules will impose. The Ucits fund, however, is likely to achieve returns similar to Paulson's track record.

The Ucits fund offers weekly liquidity and the net asset values (NAVs) will be published on Reuters, Bloomberg and online. The fund will be available in euro, sterling, US dollar and yen. It also intends to apply for reporting fund status for the sterling share class.

"Implementing our existing event arbitrage strategy via a Ucits vehicle allows us to provide a liquid, regulated, onshore European fund that helps to further diversify our investor base," commented John Paulson, founder of Paulson & Co.

He said the company had chosen Deutsche Bank's platform because of "its extensive operational and risk management experience as well as the broad distribution network the bank provides for its platform."

Deutsche Bank's Platinum platform has €12.7 billion ($17.047 billion) assets under management. The bank's managed account platform, the X-markets hedge fund platform, has over $5 billion under management.

Deutsche Bank's DB Platinum platform has snared some other well-known hedge fund managers. In November, Winton Capital Management launched the Winton Ucits fund, DB Platinum IV dbX Systematic Alpha Index Fund on the platform. This fund is linked to the performance of the dbX Systematic Alpha Index.

The index, whose components are selected by Winton, reflects exposure to approximately 100 global exchange-traded futures, forwards and options markets on commodities (including energies, base and precious metals and crops), equity indices, bonds, short-term interest rates and currencies. The strategy is primarily trend-following, attempting to take advantage of the observable tendency of the markets to trend and to move in both upward and downward directions.

Funds hosted on the platform will be marketed and distributed by Deutsche Bank. Companies like Deutsche Bank have the advantage of a recognised name and a reach into a potential new investor base. They are able to tap into existing distribution and marketing networks as well as leverage their brand to attract new investors.

Paulson & Co is a Securities and Exchange Commission-registered investment adviser specialising in global merger, event arbitrage and credit strategies. The company was founded by Paulson in 1994 who also leads the investment team. At December 1, 2010, Paulson managed approximately $33.6 billion for institutional and high net worth investors.