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Mutual Fund Company Registers Closed-End Hedge Fun

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CHARLOTTE, N.C. (–Evergreen Investment Management Co., a mutual fund company with US$108 billion in mutual fund assets, plans to join other mutual fund complexes and launch its own hedge fund.

Earlier this month, the firm filed a registration document with the Securities and Exchange Commission for a closed-end hedge fund of funds to be offered privately. The underlying fund of funds portfolio will be managed by Ivy Asset Management, which also manages hedge fund offerings for Evergreen’s parent company First Union.

As a firm, Evergreen has subsumed the alternative investments group of First Union and has spent the last year and a half bringing the various First Union asset management groups together under one umbrella, according to a company spokesman. First Union’s business practice has been offering hedge funds of funds to clients, and Evergreen has been using Ivy Asset Management to provide those offerings to its high-net-worth clients.

The closed-end fund of funds, Evergreen Hedged Specialists Fund, will invest in 10 to 15 hedge funds in various sectors in which the underlying managers specialize. Those sectors run the gamut from telecommunications to real estate, but no more than 25% of the fund’s assets will be allowed to in a single sector while not more than 25% of assets can be allocated to a single security.

Strategy allocations are also restricted in the offering to no more than 50% of the funds assets being invested in any one specific strategy. According to its SEC filing, the Evergreen fund may invest in: distressed securities, equity hedging and arbitrage, equity market neutral, equity non-hedge, event-driven, short selling, currency hedging and arbitrage, equity (index) arbitrage and merger arbitrage. The fund filing also stipulates that no more than 12% of fund assets may be in any one underlying fund.

Fees for the registered fund may include a placement fee on a sliding scale and a separate management fee of 2%.