Everest Capital has launched a concentrated closed-ended fund-of-absolute-return funds in conjunction with Babcock & Brown – the Everest Babcock & Brown Masters Fund – for institutional investors.

The combination of concentrated portfolios and absolute returns should make for a high-octane mix for investors. The fund will invest in six global funds managers – Perry Partners, Och Ziff, Drawbridge, Contrarian Capital, Canyon Value Realization Fund and The Children’s Investment Fund. “These are world class absolute return funds. The majority of these funds are closed to new investors,” David Kent, Everest Capital executive chairman, said. Everest Capital plans to raise $100 million in the new fund and the principals of Everest Capital and Babcock & Brown have committed to a combined investment of up to $20 million. It will carry a minimum investment of $100,000, management fees of 1.25 per cent and a 20 per cent performance fee for performance above a 10 per cent hurdle. A back-tested fund has delivered annualised returns of 17.2 per cent over the past five years and the fund is targeting a return of between 12.5 to 15 per cent compounded annually. The fund will be internally leveraged at a rate of 1:1 or a loan to value ratio of 50 per cent based on a committed non-recourse leverage facility priced at USD LIBOR plus 180bp. The offer opened yesterday and is scheduled for a December 13, 2005 close.

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