Institutional investor tips $30m into new Mantis offer

The Magnetar Relative Value Unit Trust, seeded by an unknown local institutional investor, is a feeder into a Cayman master fund managed by Magnetar Capital (Magnetar) and distributed by Mantis Funds (Mantis).

Magnetar is a US-based multi-strategy alternative investment manager with about US$14 billion under management.

The Magnetar Relative Value Unit Trust will employ various alternative credit and fixed income, systematic investing, healthcare, energy, and infrastructure strategies. It's first investor is an unnamed Australian institution.

Mantis said the strategy will be divided into merger arbitrage and convertible bond arbitrage.

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Magnetar's merger arbitrage strategy was established under the premise that this type of investing may offer excess returns that can be isolated based on certain M&A deal characteristics, including geography, market capitalisation, and transaction and deal type.

Meanwhile, its convertible bond arbitrage strategy seeks to buy "long" a convertible security and sell "short" a portion of the underlying stock into which the convertible security may be exercised, in instances where its models measure the security to be theoretically cheap and relatively mispriced.

Mantis distribution head Damien Hatfield said that this fund fills the void of allocation to alternative assets which make up to 15% of the wealth manager's asset allocation with little bona fide hedge fund product choice.

The unit trust is available to wholesale clients in Australia and wholesale investors in New Zealand only, with Equity Trustees as the responsible entity.

The unit trust launch follows the partnership between Mantis Funds and Adelaide-based specialty financial services provider KeyInvest.