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Merrill Lynch Launches Registered Fund

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NEW YORK (–Merrill Lynch & Co. has filed plans to offer its first hedge fund product to be registered with the Securities and Exchange Commission.

Managed through ML’s Investment Managers unit, the new Multi-Strategy Hedge Opportunities LLC offering is a fund of hedge funds with a minimum initial investment of US$25,000 for accredited investors (for individuals, those having US$1 million in net worth or income of US$200,000 in each of the past two years). The minimum subsequent investment is US$10,000.

In addition to the appeal that the relatively low minimum might have for some individuals, the fund, registered under the Investment Company Act of 1940 and the Securities Act of 1933, is favorably structured as a vehicle for ERISA employee benefit plans seeking to invest in hedge funds.

The fund offering is set to close Jan. 5, 2005.

The fund will invest in underlying funds using a variety of strategies, including relative value, global macro, long/short equities and event driven, according to Merrill’s filing with the SEC. No more than 20 percent of the fund’s assets, set to top out at US$500 million, will be placed with any single manager. The fund will use leverage.

According to the filing, fees will range from 1% to 3% for management and from 15% to 25% of profits for performance.

The administrator for the fund is PFPC Inc., Wilmington, Del., while PFPC Trust Co., Philadelphia, is custodian. FAMD of Plainsboro, N.J., also the site of Merrill Lynch Investment Managers offices, is the distributor.

Legal counsel is provided by Shearman & Sterling LLP, New York, and Deloitte & Touche LLP, Philadelphia, serves as the fund’s accountant.

Merrill Lynch’s alternative investments division has approximately US$1.3 billion in assets under management.

Contact Bob Keane with questions or comments at: [email protected].


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