SFL

 

Prior to the 2008 global financial crisis, nearly 50 banks provided leverage on a single hedge fund’s shares. However, in the wake of Basel III changes to risk-weightings, there are only a only a handful of banks left which provide single fund leverage. Most hedge fund managers lost access to this product and the advantages it provides. 

EMES learned about this market gap from a few of the investment managers in its fund of fund portfolios. In 2013, EMES began to work on a replacement product by consulting with hedge fund insiders, lawyers, bankers, investors and tax advisers around the globe. What emerged in 2014 was a product created with hedge fund managers for hedge fund managers: EMES SFL. 

In contrast to other levered solutions, SFL subscribes directly into an investor-designated share class at a modest leverage level (generally 1.5-2.5X). Subscriptions and redemptions have the same liquidity terms as the designated shares class and can be managed dynamically over time.