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CSFB Launches Five Registered Funds of Funds

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NEW YORK (–Credit Suisse First Boston’s Hedge Fund Investments group said it launched an array of five registered funds of funds April 1.

The funds cover four specific strategies–long/short equity, relative value, tactical trading and event driven–and include a multi-strategy fund, according to a news release from CSFB. All of the funds will have CSFB Alternative Capital Inc. as the investment adviser.

CSFB said in December that it was preparing the funds for launch this year.

Each of the five funds is registered with the U.S. Securities and Exchange Commission, and CSFB Alternative Capital also is registered with the commission as an investment adviser and with the Commodity Futures Trading Commission as a commodity pool operator. It also is a member of the National Futures Association, according to regulatory filings with the SEC.

Each of the CSFB funds is organized as a feeder fund, which then feeds into a corresponding master fund. Each of the funds also has an institutional feeder. So, for instance, the CSFB Alternative Capital Event-Driven Fund LLC and Event-Driven Institutional Fund LLC feed into the CSFB Alternative Capital Event Driven Master Fund LLC, which in turn invests among managers following event-driven strategies. The other four funds share similar structures and names, substituting “Long/Short Equity,” “Multi-Strategy,” “Relative Value” and “Tactical Trading” for “Event-Driven.”

“The organization of our U.S. menu reflects [CSFB] HFI’s sector-based approach to manager research,” said Jim Vos, head of HFI, in a statement. “Research is led by specialized sector teams with market experience focusing on increasingly complex and dynamic trading and arbitrage strategies. Investors can access the top-down strategy allocation expertise of CSFB through the multi-strategy feeder funds or focus their investments in sector funds that complement their current asset allocation.”

According to CSFB’s regulatory filings with the SEC, the firm’s relationship with hedge fund managers is expected to give the funds of funds access to managers that might otherwise be closed to new capital. The funds expect to place no more than 25% of their assets with any single manager.

The minimum investment is US$50,000. The management fee is 1.25% annually. Administration is being handled by PFPC Inc., Wilmington, Del., while PFPC Trust Co., Philadelphia, is handling custody, according to the regulatory filing with the SEC.

These five offerings represent CSFB Alternative Capital’s first foray into registered funds of funds and represent an acknowledgement that registration is key to many institutional investors who might otherwise avoid hedge funds.

“The hedge fund industry is becoming more transparent, and our decision to register these funds reflects that trend,” said Bob Kulperger, HFI’s product specialist for the Americas, in a statement. “Institutions and ultra-high-net-worth entities have expressed an appreciation for the added comfort provided by the transparency of regulatory reporting and the oversight of an independent board of managers.”

CSFB’s Hedge Fund Investments group manages about US$9 billion in assets.

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


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