KEY POINTS:
What is it called and what sort of savings product is it?
It's OM-IP Vision. The offer is for shares in a company based in the Cook Islands.
Who is the company behind it?
Man Investments Australia is making the offer in NZ. It is a member of the UK-based Man Group, one of the world's largest listed hedge fund providers and futures brokers.
Who is the target market?
Retail investors with at least $5,000 to invest.
What return does it offer?
No fixed return is offered but the prospectus says the fund aims for "medium-term capital growth in both rising and falling markets".
When was it launched?
The offer opened on June 18 and closes on August 17, 2007.
What other products is it like or is it competing with?
Other structured products such as Liontamer funds.
Is it long term, short term or medium term?
With a maturity date of February 28, 2017, it's long term.
What's the unique selling point?
OM-IP Vision is a blend of three of its existing investment strategies, two of which rely on computer-based quantitative models and a third that invests in a wide range of alternative asset managers.
How strong a stomach do you need for it?
OM-IP products tend to be highly technical. In the Vision prospectus, 28 levels of fees are identified and the company may borrow up to 50 per cent of the fund's value. Investors must rely on the expertise of mostly European fund managers for generating returns from the Vision product but OM-IP has cushioned the risk by providing a 'rising' capital guarantee. Investors are assured of getting their investment back on maturity. The guarantee is designed to 'lock in' some profits as soon as the fund reaches its full 150 per cent investment exposure.
What's the hitch?
OM-IP lists 10 key risks in its Vision prospectus but the most important is the fund may not return any money to investors other than the capital-guaranteed amount in 2017 - $1 in 2017 is unlikely to be worth the same as in 2007. While it allows redemptions after September 30, 2010, with no penalty until then, investors will forgo 2 per cent of the shares' value if they want to exit the investment.
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