WEST PALM BEACH, FL (HEDGECO.NET) – A growing number of banks and banking institutions are beginning to include hedge fund portfolios in their list of products offered to their customers. Accordingto published reports, banks such as Citigroup, Wachovia Corp., Bank of New York, Deutsche Bank AG and Bank of America Corp are among the growing list of bankers now offering hedge funds to theircustomers.
Mark Goshko, a partner in the investment management law office at Kirkpatrick & Lockhart LLP said, “There’s customer demand for this.� An increasing number of wealthy investors and institutional managers are continuing demand for these products and banks have to listen to what their customers are telling them. The number of banks offering hedge funds to their customers remains small, however this trend is also likely to increase in the years to come.
Bank of America began to offer its alternative investment management platform through its earlier purchase of FleetBoston according to Larry Morgenthal, managing director of the alternative investment group at Bank of America. The decision of the bank to offer hedge funds, according to Morgenthal, was partly to allow its clients to increase diversification in their portfolios.
Financial institutions other than traditional banks are also moving into the hedge fund management arena. According to Mike Dunn, Mellon Financial Corp. has established an alliance with Optima Fund Management. This move was a way to offer its customers access to hedge fund management vehicles. Dunn said, “It became obvious that we had to provide a full range of investment services; we wanted to have a vehicle that didn’t have a direct correlation with the equity markets,� he explained.
Paul Oranika
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HedgeCo.Net
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