Harmony Prime

WSP commentary

Draft commentary, machine-generated from the fund's prospectus dated 23.04.2026; key information document (PRIIPs), not yet reviewed by WSP.

Investment rationale

HARMONY PRIME Part Privilege is an alternative fund of funds designed to increase asset value over the long term through a diversified allocation with a substantial target exposure to unlisted assets. It has a recommended holding period of at least five years and is classified in risk class 2 out of 7, which the document describes as low risk, while also warning that investors could lose all or part of their capital. The share class is reserved for investors advised by independent advisers under MiFID II and for discretionary mandate management, and the product is intended for investors with some financial expertise or knowledge who seek capital growth. Its role is closer to a diversifying satellite allocation than a simple traditional core holding because it combines listed and unlisted assets, including private equity, debt, securitisation and asset financing, within a fund-of-funds structure.

Investment strategy

The stated objective is to increase the value of assets over the long term through a diversified allocation strategy with a substantial target allocation to unlisted assets, and more specifically to achieve an annualised net return above 3% over a minimum five-year holding period; this is an objective based on management assumptions and not a guarantee. The fund is actively managed with no reference benchmark and has a target allocation of 30% listed equities, 7.5% unlisted equities, 30% rate products, and 32.5% debt, securitisations and asset financing, including 7.5% securitisation and leveraged loans and 25% debt and asset financing. Listed equities may represent 15% to 45% of NAV, unlisted equities 3.5% to 15%, rate products 15% to 60%, and debt, securitisations and asset financing 13% to 60%; emerging market exposure is limited to 10% of NAV, direct high-yield bond investment to 3%, speculative debt exposure to 20%, and currency risk for euro investors to 35% of NAV. The fund invests directly and through UCITS and AIFs, uses derivatives including swaps, futures and options for exposure, hedging and volatility reduction, capitalises income and realised capital gains, calculates NAV twice monthly, and may apply redemption gates when net redemptions exceed 2% of fund assets.

Investment philosophy

• The portfolio is built as a highly diversified fund-of-funds allocation combining listed and unlisted assets, with the manager seeking to capture an illiquidity premium by mixing liquid markets with private market exposures.

• Target exposure is reached through selected UCITS and AIFs managed by BNP Paribas group companies and/or other management companies, with investments made progressively and adjusted according to subscriptions, redemptions, market conditions, macroeconomic analysis and liquidity constraints.

• The strategic allocation targets 30% listed equities, 7.5% unlisted equities, 30% rate products, and 32.5% debt, securitisation and asset financing; within listed equities the target split is 10% small and mid caps and 20% large caps, while debt exposure includes securitisations, leveraged loans, infrastructure finance and real estate finance.

• During the first three years after launch, the portfolio may differ significantly from target weights, especially for unlisted assets whose deployment can take longer; in the build-up phase, the non-listed allocation may be parked mainly in short-term bond funds, money market funds and marginally listed equity funds until final investments are made.

• Risk management includes derivative strategies to reduce overall equity risk, including downside protection strategies using options and futures; overall derivative commitment is capped at 100% of NAV, total return swaps are expected to represent about 40% of assets and may reach 55%, and the manager aims not to remain durably and significantly away from target allocation.

The asset manager

The fund is managed by BNP PARIBAS ASSET MANAGEMENT Europe (BNPP AM), a portfolio management company authorised in France under number GP96002 and regulated by the AMF. The company is located at 1, boulevard Haussmann, 75009 Paris, and is part of the BNP Paribas group, as shown by the use of BNP group entities across management, custody and eligible investors in certain share classes. The documents state that BNPP AM was approved on 19 April 1996 and that it manages the fund in the exclusive interest of unit holders. BNP Paribas acts as depositary, custodian, delegated centralising agent and fund accountant.

Strengths

A distinguishing feature is the fund’s explicit combination of listed and unlisted assets within a single diversified allocation, with a 40% target in non-listed assets through private equity, debt, securitisation and asset financing. It is structured as an alternative fund of funds, allowing access through selected UCITS and AIFs to private market segments such as leveraged loans, infrastructure finance and real estate finance while preserving a degree of liquidity through listed and short-duration holdings. The manager also uses portfolio protection strategies to reduce aggregate equity risk, rather than relying only on static diversification. For the Privilege share class specifically, ongoing management and operating costs are lower than for the Classic share class, with no exit fee and no performance fee.

Risks

The fund is classified in synthetic risk class 2 out of 7, but it does not provide capital protection and investors may lose all or part of their investment. The documents identify market risk from equities and rates, including extra sensitivity to small and mid caps, credit risk from private and public issuers, liquidity risk from unlisted securities and underlying funds with limited redemption terms, and currency risk up to 35% of NAV for euro investors. Derivatives risk is material because swaps, futures, options and total return swaps can amplify valuation changes, while counterparty risk arises from over-the-counter contracts if a counterparty fails to meet its obligations. Additional named risks include speculative credit exposure through high-yield and unrated instruments, sustainability risk, and the risk that heavy redemptions may require use of redemption gates or leave actual allocation materially away from target for an extended period.