The Bank of Bermuda has announced a new fund of "rising star" hedge funds, the All Points Absolute Return Funds - Opportunity Fund.

The fund takes advantage of the early strong performance typical of new hedge fund managers and seeks to provide the level of consistent absolute risk-adjusted returns demonstrated by alternative investments, while minimising the risks associated with investing in funds with short track records.

Director of alternative investments Adrian Fairbourn said: "The Opportunity Find is an investment vehicle for sophisticated international investors looking to complement their existing portfolio or increase exposure to the alternative asset class.

"While investing in start up hedge funds may be seen as potentially risky, it is while they are young that quality hedge funds often perform the best. We are offering a way of capturing that early performance while seeking to minimise the risk to our investors."

Bank of Bermuda already offers the All Points Fund of Funds Alternative Class, which the bank says is a highly successful fund of hedge funds vehicle that has produced a return of 26.58 percent since inception (October 29, 1999 to December 31, 2001).

It is the small group of managers with track records less than two years in the Alternative Class that have often perfomed the best.

The Opportunity Fund will aim to capitalise on this performance, but reduce the risk through a wider diversification of short-track-record managers. A portfolio of around 12 to 15 managers will be maintained in the Opportunity Fund to balance diversification with the needs of constantly analysing and monitoring each hedge fund within the portfolio.

The fund requires a low minimum investment of only $10,000 and will deal monthly with no lock up period.