Matrix launches the Matrix Lazard Opportunities Fund

Matrix announced today the launch of its second UCITS III fund. The Matrix Lazard Opportunities Fund, is managed by Matrix Money Management, who has appointed Lazard Asset Management as its Sub Investment Manager. The Lazard Asset Management team, headed by Sean Reynolds, aims to achieve absolute returns through a combination of capital appreciation and income.

 

The Fund’s strategy seeks to generate returns through two sub-strategies: convertible arbitrage and special situations/event driven investing. The strategy aims to take advantage of situations where the team believes a security’s price diverges from its expected value and aims to provide superior riskadjusted returns when compared to broad equity and credit benchmarks.

 

Mr. Reynolds, Senior Portfolio Manager, leads a six person investment team, with deep experience in event driven, relative value and convertibles strategies. The team also has access to Lazard’s Global Investment resources of over 180 professionals including analysts and portfolio managers who provide fundamental insight into special situations and events.

 

KEY ATTRIBUTES

Greater Scope than Traditional Bond Funds

 Can invest across a broader range of a company’s securities: bonds, convertibles, equities, credit derivatives.

 Can go both long and short via derivatives.

 

 Focus on Special Situations & Events

 Larger range of investment opportunities than traditional bond funds.

 Uncorrelated to traditional bond trades.

 Special situations & events occur over a relatively short time frame, which leads to a high turnover of positions in the portfolio.

 

Commenting on the launch and the investment outlook, Sean Reynolds said:

"Matrix Group has developed a strong reputation for distributing absolute return focused products into the UK retail marketplace. The Matrix Lazard Opportunities Fund provides a unique vehicle for investors seeking an on-shore regulated fund that uses our convertible arbitrage and special situations, event-driven investment approach,” said Reynolds. “The investment team believes that the recent stock market sell-off has dramatically increased the strategy’s opportunity, especially in shorter dated credit securities offering attractive equity exposure. The team's expertise in this area should significantly differentiate us from the competition."

 

Mr. Reynolds and his investment team also manage a similar strategy to the one outlined above. The strategy returned +64.3% in 2009 and -9.6% in 2008, out-performing broad equity and credit benchmarks. Since launch in June 2007 the strategy has returned 18.5%% with an annualised volatility of 7.5%. *

 *Since inception results represent the Lazard Rathmore Fund Ltd – Class A-2 for the time period 1

June 2007 – 31 May 2010 and are shown net of all fees. The performance quoted represents pastperformance. Past performance is not a reliable indicator of future results.

 

Commenting on the launch, Chris Merry, CEO of Matrix Group said:

“I am delighted to be teaming up with Lazard Asset Management to launch our second UCITS III fund following the launch last month of the Matrix Asia UCITs Fund. Sean Reynolds and his team have an outstanding track record. Stuart Ratcliff, CIO of our in-house investment team, has invested in the Lazard Rathmore Fund, the hedge fund on which the new UCITS Fund will be modelled, on behalf of our own funds of hedge funds. They first invested in July 2009 and over the period from investment to the end of May 2010 the fund has produced performance of 29.2%. The UCITS Fund will now make Sean’s investment expertise accessible to a much broader investor base.”

 

*Please note the returns shown are for the Lazard Rathmore Fund, not the Matrix Lazard Opportunities Fund. They are the returns of an offshore fund outside the UCITS framework and therefore are displayed only for the purpose of demonstrating Lazard’s investment strategy and experience. Compliance with UCITS regulations dictates that the portfolio of the Matrix Lazard Opportunities Fund and the Lazard Rathmore Fund will differ. Furthermore, the Matrix Lazard Opportunities Fund will have, among other factors, greater administration costs. Past performance is not a guide to future performance. Investors may incur substantial losses or lose their entire

investment.

 

 

For further information please contact:

Natasha Newman

Matrix Group 020 3206 7130

Louise Hatch / Harriet Totty

M: Communications 020 7920 2316/ 020 7920 2316

 

Notes for Editors

KEY ATTRIBUTES

The Fund is a multi-strategy credit fund, domiciled in Ireland, with weekly liquidity. The Fund is managed by Matrix Money Management, which has appointed Lazard Asset Management as Sub-Investment Manager.

 

EXAMPLE SPECIAL SITUATIONS

Examples of special situations and events that the Lazard Opportunities Strategy may pursue include, but are not limited to, the following:

• Buybacks or Tenders: This involves a company purchasing its own debt or securities at or prior to maturity, and is usually designed to reduce leverage, strengthen the balance sheet or reduce interest risk to its balance sheet.

• Callable Paper: Certain securities are “callable”, meaning that the company can “call”, or force the redemption of, securities pursuant to certain established parameters. The timing and likelihood of a company calling its security for redemption can result in potentially attractive (or unattractive) impacts to the security’s valuation.

• Exchange Offers: In an exchange offer, a company offers the security holder the opportunity to exchange their current holding for a comparable security. Such exchanges are typically done as companies look to manage near term liquidity and upcoming debt maturities but also for tax or accounting reasons. The company will often offer additional value to bondholders to encourage

them to make the exchange.

• “Sweeteners”: A “sweetener” involves a company offering an incentive to the security holder typically to enable the company to take advantage of certain tax or accounting benefits associated with the security. Usually, this may include delaying the maturity or early redemption of bonds or encouraging holders to convert their securities into common shares.

• Defaults / Distress: A company may violate a covenant (i.e., the contractual requirements) in its bond indentures (the legal document that describes the key terms of the security) giving security holders the right to demand repayment of principal or par.

• M&A: Merger and acquisition activity can impact security valuations through protections afforded to security holders within indentures. In some cases, security holders can redeem their security for par or principal value if an ownership change occurs. Many convertible securities provide for adjustments to the issue terms (typically a conversion ratio adjustment or increase in the number of shares upon conversion) if a change of ownership occurs.

 

FUND DETAILS

Legal Structure: Irish Domiciled Fund (Sophisticated Fund)

Regulated The Financial Regulator (Ireland). The fund will be marketed under Private Placement Rules until mid July when Matrix expect the fund to be passported into the UK by the FSA

Listed: Irish Stock Exchange

Liquidity Weekly

NAV Calculation Weekly

 

MINIMUM INVESTMENT

Retail £ Class £50,000 (£25,000 when passported into the UK)

Institutional £ Class £100,000

Institutional € Class €100,000

Institutional $ Class $150,000

 

CHARGES

Initial Charge

Retail up to 5%

Institutional up to 5%

 

Annual Management Charge

Retail 2.0%*

Institutional 1.25%

*includes 0.5% annual trail commission

 

Performance Fee

20% subject to high water mark

 

Matrix Group is one of the largest and most successful privately owned financial services businesses in the UK with over £3 billion of assets under management and more than 230 professionals employed across four divisions: asset management, investment banking, property and specialised finance. Since inception in 1987, Matrix has raised over £9.5 billion of assets for investments across

these business areas.

 

Within the asset management division of Matrix Group, as well as funds of funds, investment management, cash funds and private equity, there are currently six other long/short equity funds: 

 Matrix Asia Fund, a Pan Asian equity Long/Short Fund

 Matrix Asia UCITs Fund

 Matrix Macro Fund, a global macro equity fund

 Matrix New Europe Fund, focused principally on the markets of Russia

 Matrix PVE Global Credit Fund, focused on global credit markets

 Matrix Redux Emerging Markets Fund, a macro fund focused on emerging markets

 

Lazard Asset Management is a subsidiary of Lazard Freres & Co. LLC and is registered as an investment advisor with the SEC. Lazard has over 550 employees, including 235 investment personnel, across 14 offices worldwide and has over $120 billion of assets under management.

 

Issued by Matrix Money Management Limited (“MMM”), of One Vine Street, London, W1J 0AH, Registered in England Number 03641363, authorised and regulated by the Financial Services Authority number 190673.

 

The Matrix Lazard Opportunities Fund (the “Fund”) is an open-ended sub-fund of the Matrix UCITS Funds plc (the “Company”), an umbrella fund with segregated liability between sub-funds, incorporated with limited liability as an investment company with variable capital under the laws of Ireland with registered number 474351.

 

An investment in the Fund is speculative and may not be appropriate for all potential investors. The value of an investment and income

from it can go down as well as up and may be affected by exchange rate variations. Investors may not get back the amount invested. Initial charges are likely to have a greater proportionate effect on returns if investments are liquidated in the shorter term. Current tax levels and reliefs will depend on the nature of the holdings. Past performance is not a guide to future performance. Prospective investors should conduct their own investigation and analysis of the Fund and consult its/their own professional tax, accounting, financial or other advisors as to the risks involved in making such as investment.

It is not an invitation to make an investment in the Fund or in the Lazard Rathmore fund nor does the information, recommendations or opinions expressed herein constitute an offer for sale of the Fund or the Lazard Rathmore fund.

Any offering of the Fund can be made only by means of the Fund’s prospectus and applicable Supplement (together, the “Prospectus”) and applications for the Fund will only be considered on the terms of the current Prospectus. Copies of the full and Simplified Prospectus may be obtained free of charge from Matrix Money Management Limited, One Vine Street, London W1J 0AH, UK.

Potential investors should pay particular attention to the risk disclosures in the Prospectus. An investment in the Fund is suitable only for experienced investors who are capable of evaluating and accepting the merits and risks involved and who have sufficient resources to be able to bear losses which may result from such an investment. It should be borne in mind that the risks involved in the types of investment which are included in the Fund’s investment strategy are greater than those normally associated with other types of investment. All prospective investors should carefully consider the Fund’s investment objective. No assurance can be given that the Fund’s investment objective will be achieved or that the Fund will generate a positive return.

In order to implement its investment strategy, the Fund invests in one or more financial derivative instruments (“FDIs”) in the form of swaps. While the use of FDIs can be beneficial, they also involve risks different from, and in certain cases, greater than the risks presented by more traditional investments. The Fund may incur losses greater than its initial investments into FDIs (although shareholders will not incur any liabilities beyond their initial investment). FDIs may be subject to sudden, unexpected and substantial price movements which may be influenced by factors such as interest rates, currency exchange rates and economic and political events which are not predictable.

FDIs do not always perfectly or even highly correlate or track the value of the securities, rates or indices they are designed to track. For all these reasons, an investment in the Fund is considered to be high risk and will not be appropriate for all potential investors. Investors

should not invest in the Fund unless they are prepared to lose a substantial portion of their initial invetsment.

The underlying strategy of the Fund pursues convertible arbitrage and special situation opportunities.Convertible arbitrage strategies

generally involve price spreads between the convertible security and the underlying security. The prices of these investments can be

volatile as market movements are difficult to predict. Event driven investing requires the Fund to make predictions about (i) the

likelihood that an event will occur and (ii) the impact that such an event will have on the value of a company’s financial instruments. If

the event fails to occur or it does not have effect foreseen, losses can result. 

The Fund is subject to the risk of insolvency of its counterparties. The Fund is able to gain market exposure in excess of its net asset value which can increase or decrease the value of shares to a greater extent than would have occurred had no additional market exposure beyond the Fund’s net asset value been in place. Ancillary to the investment strategy, the Fund may also retain amounts in

cash and cash equivalents pending reinvestment or if this is considered appropriate to the investment strategy.

An investment in the Fund is expected to have weekly liquidity. No secondary market is expected to develop for the Fund shares.

Investments denominated in currencies other than that of an investor’s base currency will be subject to changes in exchange rates.

Whilst every effort is made to ensure the accuracy of this information, no representation or warranty stated or implied is made or given by any persons as to the accuracy or completeness of the information contained in this document and no responsibility or liability is accepted for such information or opinion.