Hatteras Sector Select plans $250 million initial offering of shares

By Toni Weeks

San Diego, Oct. 19 - Hatteras Sector Select Fund plans to offer up to $250 million of shares, according to an N-2 filing with the Securities and Exchange Commission.

Hatteras Capital Investment Management, LLC will serve as the investment manager. David B. Perkins, Robert L. Worthington and Joshua E. Parrott are the portfolio managers. Hatteras Capital Distributors, LLC, the principal distributor and underwriter, will offer the shares on a best-efforts basis.

The initial public offering will be for 2.5 million shares at $100.00 per share. Settlement is expected April 1, 2012. Shares may be offered at additional times, and the manager will not recommend further closings until at least April 1, 2013. The minimum initial investment in the fund by any investor is $50,000.

The fund's investment objective is to provide long-term capital appreciation to its shareholders by providing them with access to actively managed sector-specific hedge fund strategies.

The fund will invest its assets primarily in six or more long-short sector-based equity hedge funds sponsored by Wellington Hedge Management, LLC through an investment of substantially all of its assets in the Hatteras Sector Select Institutional Fund. The WHM funds primarily pursue a long/short equity strategy but may also invest in U.S. and non-U.S. equities and equity-related instruments, high-yield bank loans, reverse repurchase agreements, securities lending agreements, futures contracts, spot and forward contracts, options, swaps and hybrid, synthetic and derivative instruments.

The portfolio will be constructed based on global equities defined by the MSCI World index. The initial allocation among sectors is expected to consist of 10% to 20% from energy/natural resources, financials, health care, real estate and technology sectors, as well as 15% to 35% from multi-sector.

The Raleigh, N.C.-based fund intends to make repurchase offers for about 20% of the outstanding shares on a quarterly basis beginning one year after closing and will have a maximum sales charge of 2%.

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