NEW YORK (HedgeWorld.com)–Columbia Management Co., a traditional asset manager, has partnered with hedge fund of funds heavyweight Chicago-based Grosvenor Capital Management LP for a new offering.
On the last day of 2002, Columbia, an indirect subsidiary of FleetBoston Financial, registered with the Securities and Exchange Commission a closed-end investment company that will offer a fund of funds sub-advised by Grosvenor.
According to the SEC filing, Columbia Management Multi-Strategy Hedge Fund is to invest with 25 to 50 managers practicing strategies classified as arbitrage, equities or opportunistic and ranging in geographical focus from the United States, Europe, Japan to emerging markets. The relative weights of these strategies is expected to vary over time.
The underlying arbitrage group could include convertible and distressed securities as well as bond, merger, statistical and relative value arbitrage. The equity managers may be generalists or sector specialists, and their typical market exposure can be long, long bias, neutral, short bias or variable. They may specialize in a single region or go across regions.
Funds in the opportunistic strategy invest in a variety of instruments such as currencies, commodities, debt and derivatives, depending on where they see promise. The filing says a smaller portion of the portfolio will be allocated to these compared to arbitrage and equity strategies.
A committee of Grosvenor partners, including founder and chairman Richard Elden, will oversee the fund’s day-to-day operations. Michael Sachs, Stephen Malkin and David Small are on this team.
Columbia Multi-Strategy charges 1% for management and 0.37% for other expenses and carries a 10% performance fee. The fund has not yet started investment operations. Its net assets were estimated at US$100 million for the purpose of calculating fees.
Chicago-based Grosvenor manages more than US$4.8 billion. This is the first time the 31-year-old firm will be advising a registered vehicle. Grosvenor is a wholly owned subsidiary of Value Asset Management.
Boston-based Columbia Management and its affiliates have US$142 billion under management, partly in mutual funds. The parent, FleetBoston, is the seventh largest financial holding company in the United States.