Mellon Global Alternative Investments Launches New Fund Of Funds

Mellon Global Alternative Investments Limited Limited (MGAI), a UK based alternative investments subsidiary of Mellon Financial Corporation, has announced the launch of Mellon Sanctuary II, a fund of hedge funds based on the Mellon Sanctuary fund already managed by MGAI.

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Mellon Global Alternative Investments Limited Limited (MGAI), a UK-based alternative investments subsidiary of Mellon Financial Corporation, has announced the launch of Mellon Sanctuary II, a fund of hedge funds based on the Mellon Sanctuary fund already managed by MGAI.

Mellon Sanctuary II is a sub fund of Mellon Global Alternative Investments Fund plc, a Dublin-domiciled and authorised fund of hedge funds. The new fund was launched on 1 July 2004.

“The low volatility and diversification of our fund of hedge fund products are attractive to institutional investors,” says Scott MacDonald, Director of Mellon Global Alternative Investments. “With the launch of Sanctuary II we aim to satisfy this continued demand for a disciplined approach to alternative investments.”

Now approaching $300 million in assets, Mellon Sanctuary has a cumulative return of 21.3% for investors and has achieved positive returns over 83% of the time since its launch.

MGAI says it invests in a relatively small number of managers, who have limited capital capacity, and as they approach their limit are beginning to close their funds. “This highlights the success of MGAI’s manager selection, both in identifying managers who can generate returns and bring in new capital, but also have the discipline required to turn away excess capital in order to maintain returns,” says a Mellon Global Alternatibve Investments spokesman. “As more managers close, the portfolio weightings in Sanctuary are impacted by new flows of capital. In order to preserve the attractive risk/return profile for investors MGAI is limiting the total assets of the Sanctuary fund and launching Sanctuary II to satisfy continued investor demand.”

At launch Mellon Sanctuary II will have 65% of the same managers as Mellon Sanctuary, and strategy and sub-strategy allocations will be closely aligned. Both funds will have identical risk and return objectives and over the longer term levels of performance and volatility are expected to be comparable, given the shared manager selection and strategy allocation process.

MGAI says its uses a proprietary application, AdvantHedge, to assess 300 qualitative factors on each manager to ensure that the standards expected by investors are met. As with Sanctuary, the new fund will invest in a diversified portfolio of relative value and event-driven managers, seeking to achieve consistent returns with low volatility and low correlation when compared to traditional equity and bond indices.

“We are pleased to announce the launch of Mellon Sanctuary II,” says Jon Little, Chief Executive Officer of Mellon Global Investments. “This launch, coupled with the recent announcement of Mellon’s acquisition of Evaluation Associates Capital Markets in the US, further underlines Mellon’s commitment to the fund of hedge funds market.”

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