Focus on IP 220

The first Man-IP 220 fund was launched in 1996. It represented a breakthrough in hedge fund structuring, and the ensuing series of funds has produced exceptional performance.

Man pioneered the capital guarantee structure in the mid 1980s, and launched a series of funds based on combining an investment in a single manager with some form of capital guarantee. A further development was to use external financing to allow for increased investment exposure.

This approach proved to be very successful. Man-IP 220 represented the next step: to combine more than one manager under this type of structure. Using two managers whose returns were produced in different ways allowed for a smoother overall performance. Man-IP 220 combines two of Man's managers: AHL, a managed futures business, and Glenwood, a fund of funds manager.

The product's investment exposure is enhanced by a mechanism which, through a combination of the efficient use of trading capital and credit facilities enables an investment exposure of 160 units for every 100 units invested. The product is then protected by a capital guarantee from a major bank, which assures the return of at least the investor's initial investment at a maturity date. In the case of US dollar denominated products, the collateral is in the form of US treasury bonds. In addition, a rising guarantee feature, which works through locking in profits, can act to increase the value of the guarantee. A further variation, particularly suited to low interest rate environments, is to offer an initial partial guarantee with profit lock-ins, to prevent the maturity of the product from becoming too long-dated.

Man-IP 220 has produced a compound rate of return of 14.2% per annum since inception in 1996. Importantly, this excellent long-term performance has been achieved in a variety of market conditions, including several major downturns in the global equity markets.