MINNEAPOLIS (HedgeWorld.com)–The asset management arm of American Express Financial Corp. joined the fast growing ranks of financial companies that offer registered hedge fund products, filing a fund of funds vehicle with the Securities and Exchange Commission on Monday.
Advisory Hedged Opportunity Fund from American Express will invest in 15 to 30 managers initially, but this number may increase as the assets grow, according to the SEC filing. How much capital American Express intends to raise with this closed-end investment vehicle is not clear.
The fund is to include a wide variety of strategies. Among these are commodities, index arbitrage, interest rate arbitrage, convertible bond and warrant hedging, merger arbitrage, event-driven, fundamental long/short equity and statistical long/short equity, short selling, pairs trading, and investment in private placements.
Advisory Hedged also may invest with managers that do not use hedged opportunity strategies but whose performance has been negatively correlated to equity, debt and other markets. The goal is “to generate a consistent return pattern with minimum deviation,” states the SEC filing.
The fund, available only to eligible investors, has two classes of shares. Minimum initial investment is US$50,000 for Class I Shares and US$1.5 million for Class II Shares. The subsequent investment minimum is US$10,000 for Class I and US$100,000 for Class II.
The management fee is 1.15% and there is an administration fee that varies by share class. American Express Financial Advisors is the distributor.
American Express has for years run both a single-strategy hedge fund business and a separate unregistered fund of funds operation. The company launched a distressed debt fund last year.