TAL Global Asset Management Inc., Montreal, and Pacific Alternative Asset Management Co., Irvine, Calif., will create customized alternative investment strategies for pension funds and other prospective clients.
PAAM will provide the management, using a fund-of-hedged-funds approach, while TAL will provide the distribution.
The agreement is exclusive to both parties in the Canadian market, where TAL will concentrate its efforts. Mr. Fyfe said TAL, an SEC registered investment adviser, could market the strategy also to prospective clients in the U.S., although that won't be its focus for now.
Gordon Fyfe, president and chief operating office, TAL Investments, a division of TAL GAM, which is noted for its asset allocation management, said the hedge fund strategy would be used in part as an alternative to moving to low-risk, low-return cash when an investor wanted to underweight equities, such as when expecting a decline in the stock market.
The hedge fund strategy would allow investors to change their return but not their risk profile, he said.
"We will be creating a new asset class called hedge funds," he said, along with the traditional allocations to equities, fixed income and cash.
He said the growth potential for the strategy is huge.
Jane Buchan, PAAM principal, said PAAM controls the risk in part by using the fund-of-hedge-funds approach, employing a number of strategies and a variety of managers. The strategies will blend market neutral, low beta, and credit-risk strategies. It will offer TAL clients different risk levels to fit their objectives, he added.
TAL managed C$27 billion (U.S.$18.2 billion)for institutions, while PAAM has under management $350 million in fund-of-hedge fund strategies.
SSgA, Bank of Ireland set alliance for passive funds
DUBLIN -- State Street Global Advisors U.K. has teamed up with Bank of Ireland Asset Management to market passive investment products to the Irish institutional investment market.
This is the first alliance State Street has made with an Irish bank and comes in anticipation of high demand for passive mandates from the soon-to-be-established National Pension Reserve Fund.
The fund will be launched early next year with around E6 billion ($5.2 billion) in assets and is likely to be managed mainly on a passive basis.
Quebec Caisse acquires share in Jerusalem manager
MONTREAL -- Caisse de Depot et Placement du Quebec bought 10%of Spring Pension Fund Management, based in Jerusalem. The price was not disclosed.
Under terms of the deal, Caisse, which has C$105 billion (U.S.$71 billion) under management, reserves the option to purchase up to 25%of the company, which is worth an estimated 95 million shekels ($23.5 million), within three years. Spring is owned by the First International Bank of Israel and Kali Group and has 11,000 clients in three pension funds.
Israeli pension funds are limited to funds active only on local bond markets, but the government is expected to allow pension funds to invest overseas soon.
FTSE to launch family of European technology indexes
LONDON -- FTSE plans on Oct. 2 to launch FTSE eTX, a family of European technology indexes covering all European technology companies with a market cap larger than $110 million.
The FTSE eTX Innovation index will bring together in a single pan-European index the midcap and small-cap technology companies that dominate Europe's new growth markets. It will have two narrow-based tradable indexes, the FTSE eTX 50, comprising pan-European companies, and the FTSE eTX euro 50, comprising only euro-zone companies.
Initially, two U.K.-based index funds will be launched on these indexes. Themis Investment Management will launch a fund on the FTSE eTX Innovation index in early October; and Close Fund Management plans to launch an index fund on the FTSE eTX euro 50 at a still-undetermined date.