BNY Mellon discusses fund-of-hedge funds launch

Talks with St George Bank

By Vishal Teckchandani
Mon 20 Oct 2008

BNY Mellon is in talks to release its subsidiary Ivy Asset Management's fund-of-hedge funds to Australian planners.

BNY Mellon Asset Management (BNYMAM) may launch its subsidiary Ivy Asset Management's (Ivy) fund-of-hedge funds to Australian financial planners.

The firm is in exploratory talks with its distribution partner, St George Bank-owned Advance Asset Management, to launch Ivy's products to local planners, BNYMAM managing director James Gruver and Ivy Asia-Pacific managing director Alex Balfour said in an interview with InvestorDaily.

The discussions include how to design products for local planners that could beat returns from Australia's interest rates, while being tax-effective and liquid for investors, Balfour said.

"Our first job is just to listen and understand and really try and put ourselves in their shoes, [including] what are their issues, what are their concerns?" Balfour said.

"Australian clients have amazingly high interest rates, making them totally different to United States and European investors."

Ivy is aiming to distribute either an existing fund, a combination of funds or a new fund, through Asgard's platform, within six to nine months, Balfour said.

Hedge funds as an asset class, which aim to make money in any market conditions, fell 17 per cent for the year to October 9 - the worst performance ever, according to Chicago-based Hedge Fund Research.

However, there were exceptional performances by some managers including Grizzly Short Fund, which gained 41 per cent this year, and Paulson & Co.'s hedge fund which has soared 650 per cent since August 2007.

Hedge funds have been too heavily criticised, according to Balfour, and like any asset class they have negative years as well.

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