November 4, 2003

Bank of America, Fleet Have Established Hedge Fund

CHARLOTTE, N.C. (HedgeWorld.com)--Bank of America Corp.'s US$47 billion purchase of Fleet Boston Financial Corp., Boston, will bring together established hedge fund operations through Bank of America's BACAP Alternative Advisors LLC and Fleet's indirect partial ownership of Grosvenor Capital Management LP.

It's unclear at this stage how, if at all, the two firms will meld their respective money management operations, including hedge funds. A spokesman for Fleet declined comment on its hedge fund unit and ownership of Grosvenor. Officials for Bank of America and Chicago-based Grosvenor were not available for comment on the planned merger.

BACAP manages more than US$700 million in hedge funds, while Grosvenor manages US$4.8 billion in discretionary assets and US$5.3 billion in total, according to government filings.

Subsidiaries of the two companies have registered to sell hedge funds under the supervision of the U.S. Securities and Exchange Commission. In April BACAP registered to sell BACAP Alternative Multi-Strategy Fund LLC Previous HedgeWorld Story, though there's no indication in the filings that the fund actually has launched. Previously, BACAP had launched BACAP Opportunity Strategy LLC, which had US$35 million in assets as of June 30.

Columbia Management Co., a Fleet investment unit, registered to offer Columbia Management Multi-Strategy Hedge Fund LLC, as of the end of last year . That fund as of March 31 had US$42 million in assets. That fund is subadvised by Grosvenor, which is indirectly owned by Fleet through its substantial investment in Value Asset Management Inc., a Stamford, Conn.-based holding company for investment firms. (Value Asset owns the company that is majority member of the general partner of Grosvenor, according to a filing. Value Asset officials were unavailable for comment on the day of the merger announcement, Oct. 27.)

The filings also show that BACAP has gathered a decent amount of assets in three of the seven unregistered hedge funds cited in its federal filings dated as of May. BACAP Alternative Montage Fund LLC had US$256 million in assets; BACAP Multi-Strategy Hedge Fund LLC (Series I) had assets of US$238 million; and BACAP Multi-Strategy Hedge Fund Ltd. had assets of US$120 million.

BACAP Distressed Debt Fund LLC, BACAP Institutional Multi-Strategy Hedge Fund Ltd., and BACAP Multi-Strategy Hedge Fund LLC (Series III) together had about US$71 million in assets.

Grosvenor, a fund of funds manager, listed seven funds in its March 31 filings, notably Grosvenor Multi-Strategy Fund LP with US$424 million and Grosvenor Institutional Partners LP/Master Series with US$393 million. The Multi-Manager Composite Fund LP, Grosvenor New Opportunities Fund LP, Grosvenor Short Selling Fund LP, Grosvenor Masters Fund LP and Grosvenor Multi-Strategy Leveraged Feeder Fund I LP, together have US$151 million in assets.

PBarr@HedgeWorld.com

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