LONDON (HedgeWorld.com)–The board overseeing a Merrill Lynch asset allocation investment trust recommended that hedge funds be added to the mix, with Fauchier Partners International Ltd. as the manager.
As a result, shareholders for the Growth Share Portfolio of Merrill Lynch Asset Allocator plc will vote Sept. 17 on whether to add an allocation of 30% hedge funds. Fauchier Partners International Ltd. would manage the portfolio in a fund of funds approach, if approved, according to a statement from the funds’ board. Merrill already has worked with Fauchier in its hedge fund efforts Previous HedgeWorld Story.
A Merrill spokeswoman declined comment on the change, referring questions to the fund’s board, which couldn’t be reached. The growth portfolio is traded on an exchange and recently traded at a 17% discount to net asset value. Assets were 124 million U.K. pounds (US$197 million), meaning Fauchier would get about US$60 million of the fund.
The growth fund beat its benchmark for the year ended June 30 with return on its share price of negative 4.1%. The benchmark, 75% MSCI World Equities Index and 25% Citigroup World Government Bond Index, returned negative 5.3% in the same period, according to Merrill’s web site. But since inception in 1999, the fund fell 20%, while the benchmark fell 12.8%.
The 30% allocation to Fauchier would sit alongside a 30% allocation to global equities to be managed by Southeastern Asset Management Inc., Memphis, Tenn., and a 37% allocation that will remain with Merrill Lynch Investment Managers, the current manager of the entire fund.
Shareholders in a sister portfolio, the Balanced Portfolio, will not be voting on adding hedge funds.